AN EVALUATION OF THE CHALLENGES OF SERVICE CHARGE ADMINISTRATION ON COMMERCIAL PROPERTY MANAGEMENT IN ONITSHA, ANAMBRA STATE OF NIGERIA

Abstract: Service charge administration for a long time is cited as the commonest cause of conflict in the landlord, tenants and property manager’s relationship. The study evaluated the challenges encountered in the administration of service charge in the commercial city of Onitsha, Anambra State of Nigeria. The study was guided by four main objectives namely; to identify what constitutes service charge, to examine the method of service charge administration in commercial properties, to identify the challenges in the administration of service charge in the management of commercial properties, and to ascertain the users satisfaction level on the service charge paid. Fifty (50) commercial properties were selected to represent the five major commercial areas in the Onitsha metropolis; Awka Road, New Market Road, Old market Road, Oguta Road and Iweka Road. Data was collected by the use of a self-administered questionnaire for a sample of 350 respondents whereby 200 of them were tenants occupying the commercial properties; others were registered Estate Surveyors and Valuers (50), and commercial property owners (100). 200
questionnaires were distributed to the tenants out of which 176 were returned at 88%, 100 questionnaires were distributed to commercial property owners with a return of 72 at 72% and finally 50 questionnaires were given out to the total population of registered Estate Surveyors and Valuers in Onitsha with a return of 38 at 76%. The questionnaires were designed to reflect the objectives of the study so as to enable the researcher to gather relevant data relating to the subject matter. Primary data was obtained directly from the field by the use of questionnaires, personal interviews and on the spot assessment. The study design was the survey and case study design. Data was analyzed using One Sample T-Test and Principal Component Analysis (PCA) and was presented in frequency tables and percentages. The research questions were presented using Likert Scales of different values. Findings from the responses to the questionnaire indicated that the user satisfaction level on the administration of service charge on
commercial property management in Onitsha is below average 41% and this is a key consideration in the success of service charge administration. In addition, analysis disclosed that the major challenges encountered are; lack of transparency, collection, delay in payment, apportionment, inherent conflicts, management fee and complexity of occupiers, lack of communication and management by non professionals. The study recommends the provision of service charge information by the managers of these properties who should be registered estate surveyors and valuers and the enlightenment of the general public on the content and advantage of service charge administration. Finally the general public should be properly safeguarded against exploitation arising from incorrect management of the service charge account.