CHALLENGES OF SERVICE CHARGE MANAGEMENT IN COMMERCIAL PROPERTIES

ABSTRACT

The study examined the challenges of service charge management in commercial properties in
Ugbowo, Benin City. Three (3) objectives were raised for the study which are: to identify what
constitutes service charge in Benin City; to examine the method of service charge management in commercial buildings in Benin City; and to identify the challenges in the management of commercial buildings in Benin City. The study adopted survey research design. The instrument for data collection was questionnaire; it was built around the research question and validated by the supervisor. Data collected were analysed using descriptive statistics (Mean and Standard deviation).
The findings of the study revealed that there are several fees that constitute service charge of
commercial buildings in Benin City, some of which are; sewage disposal, waste disposal, water
supply, and cleaning of common parts There are several methods of service charge management in commercial buildings in Benin City which majorly include as a percentage of rent and as agreed with the tenant. There are several challenges encountered in the management of commercial buildings such as transparency, financial incompetence, collection of the service charge, delay in payment, amongst others. To address these challenges effectively, stakeholders in commercial real estate must prioritize clear communication, adopt advanced software solutions for accurate cost tracking, and engage in proactive tenant engagement and dispute resolution mechanisms. It was recommended that establishment of a clear and transparent communication channels between property owners and tenants. Provide detailed breakdowns of service charges, including the costs associated with each service or maintenance item; and that there should be the implementation of a modern property management software and
accounting systems to streamline service charge calculations, collection, and reporting.