I

C h a pt

.-,--7]

Property Management Pra ct ic e in N i ger i "

- - - - - - - - -------------------------

of documents. Some agents also forget the need for insisting on

completi on of documentation .
Docum entation oftenancy renewal poses a greater problem for
the manager. The tenant is already in occupation. He cannot be easily
thrown out. Most sitting tenants refuse to pay legal fees on renewal. The
argument is that they paid the initial fee for documentation when they

LEASES, TENANCIES AND

REGULATIONS

first moved into occupation and see no reason to pay another legal fee
on renewal. In practice, only in very few cases are tenancy renewals
fully docum ented. Because of the problem of gettin g sitting tenants to
pay for documentation on renewal, managers shou ld ensure that the

Leases & tenancies

renewal is made clear by correspondence to be for a term certain, say,

A ll interests in the property should be properly documented. These

wou ld i nclude the landlord's ti tle, head leases, subleases,
tenancies, sub-tenancies and any other rights subsisting.
It is regrettable that only in a few cases a re documentation
for tenancies,

l etters sh ould provide that the client's solicitors

document l eases or tenanci es at the expense of the tenants. That way the
tenants are forced to have their interests documented for once t hey have
paid the legal fee they are comm itted. A lso in the case of properties in
multi ple occupation, the provi sions in the tenancy agreements wi ll be

to m ove in immediately after handing over such a sizeable sum. The

simil ar. Using the client's solicitors ensures speed y.:umentation for

landlord

the solicitors want to do a good and qu ick job protecting their client's

be

more

subleases

Offer

before occupation i s taken. The tenant, hav ing paid his rent, is anxious
should

leases,

year.

completed

who

sub-tenanc ies,

for a nother two years otherwise it could become a tenancy from year to

anxious

about

completing

documentation, on his part, is anxious to get his hands on the rent.

interest as well as earn their fee. Tenants shou ld be made to execute

Sometimes, after the rent has been paid and passed over to the landlord,

leases before actually mov ing into occupation. This cou ld prevent

both pa rties do not bother much about documentation. Some tenants

problems and even recourse to law courts in future. Tenancy

even after having been compelled to pay legal fees in advance do not
bother especially when they discover that stamp duty w ill cost them

agreements spell out the parties' obligations and rights.

Managers should be awa re that just as not every person who

another 6% or thereabouts based on the rent they paid. On the other

has a degree i n estate management can make a good property manager,

hand, some tena nts will insist on compl eting the documentation they

it is not every solicitor th at can prepare a good lease or tenancy

have paid for. Some landlords, not being ful ly aware ofthe need for fu

agreement. Managers should, where they have the opportunity,

ll documentation, the possibility of l osses in case of disputes, w ill not

recomm end to their cl ients' so licitors expe rienced i n drafting tenancy

press their agents for their copies

79

Bo

Chapter

Property Management Practice in NigeriCl

of documents. Some agents also forget the n eed for insisting on

completion of documentation.
Documentation of tenancy renewal poses a greater problem for
the manager. The tenant is already in occupation. He cannot be easily
thrown out. Most sitting tenants refuse to pay legal fees on renewal. The

LEASES, TENANCIES AND

REGULATIONS

argument is that they paid the initial fee for documentation when they
first moved into occupation and see no reason to pay another legal fee
on renewal. In practice, only in very few cases a re tenancy renewals
fully documented. Because of the problem of getting sitting tenants to
pay for documentation on renewal, managers should ensure that the

Leases & tenancies

renewal is made clear by correspondence to be for a term certain, say,

for another two years otherwise it could become a tenancy from year to

All interests in the property should be properly documented. These

would include the landlord's title, head leases, subleases, tenancies,
sub-tenancies a nd any other rights subsisting.
Tt is regrettable that only in a few cases are documentation for
tenancies, sub-tenancies, leases,

subleases completed before

occupation is taken. The tenant, having paid his rent, is anxious to move
in immediately after ha nding over such a sizeab le sum. The landlord
who should be m ore anxious about completing documentation, on his
part, is anxious to get his hands on the rent. Sometimes, after the rent
has been paid and passed over to the landlord, both parties do not bother
much about documentation. Some tenants even after having been

year.
Offer letters should provide that the client's

solicitors

document leases or tenancies at the expense of the tenants. That way the
tenants are forced to have their interests documented for once they have
paid the legal fee they are committed. Also in the case of properties in
multiple occupation, the provisions in the tenancy agreements will be
similar. Using the client's sol icitors ensures speedy::!.umentation for
the sol i citors wa nt to do a good and quick job protecting their client's
interest as well as earn their fee. Tenants should be made to execute
leases before actually moving into occupation. This could prevent

compelled to pay legal fees in advance do not bother especially when

problems and even recourse to law courts in future. Tenancy

agreements spell out the parties' obligations and rights.

they discover that stamp duty will cost them another 6% or thereabouts

Managers should be aware that just as not every person who

based on the rent they paid. On the other hand, some tenants will insist
on completing the documentation they have paid for. Some landlords,

has a degree in estate management can make a good property manager,

I

not being fully aware of the need for full documentation, the possibility

it is not every solicitor that can prepare a good lease or tenancy

of losses in case of disputes, will not press their agents for their copies

agreement. Managers should, where they have the opportunity,

79

recommend to their cl ien ts' soli citors experienced in drafting tenancy

Bo

'
Leases,

Tenancies

And

Regu l a t io n s

- -- - -

-----------------------------agreements for badly drafted documents create problems. Where

necessary the manager should guide the }-Oiicitor on what to include in
the agreement so that the clients' interest is fully protected.
Generally leases and tenancy agreements should be kept
simple and brief, following the general lines of the offers with the usual
preambles, naming the parties and their addresses, describing the
properties being demised. There should be a definite date of
commencement and the duration should be stated. The rent and the
responsibilities of both parties should be spelt out. If an option is
granted it should be stated and if the tenant can apply for renewal the
time within which he can do so should be stated. Ifit is a long lease
then there would be provision for rent reviews.
At this point it may be useful to consider one phenomenon that
is getting common and that is estate surveyors and valuers preparing
tenancy agreements themselves.It is granted that some estate surveyors
and valuers are also lawyers and, perhaps, one or two very large firms
have solicitors as their direct staff and could rightly prepare legal
documents. But managers
are having documents engrossed
themselves. Sometimes they use the names of practicing solicitors who
may not be aware that their names are being used. Other times no
solicitors are mentioned. Thus they make extra money for the fjrms.
No doubt it is good to diversify and make more money. Also it is
assumed that ifthere are problems they can bring in solicitors. But one
wonders if it is right. An excuse once heard was that solicitors are
dabbling into property management and carrying out other
businesses that should normally be carried out by estate surveyors and
valuers and it is therefore justifiable for estate survey0rs and valuers to
carry out simple documentation.
Generally, tenancies for one year certain may rest on exchange

81

Property Management Practice in Nigeria

of coJTespondence but vigilance is required to ensure that tenancy for

one year does not become yearly tenancy. Tenancies for two or three
years should be stamped. Unfortunately, because of the high stamduty
the tenant to whom this cuty is usually pushed hardly does stampmg. It
does not really matter as loag as there is no dispute. In Lagos State
leases for five years and above need to be stamped and registered with
government.
Undocumented leases and tenancy agreements present many
problems and a good manager should ensure that his client is save_d
those problems. For instance, unless the duration of a lea_se I S
specifically stated in an agreement it may soon become a top1c for
litigation. A tenant put in occupation by virtue of a letter of offer th t
puts the term at, say, two years may become a tenant from year to year 1f
efforts are not made before the expiration of the tvio years to renew or
obtain vacant possession. Terminating a tenancy from year to year
requires six months notice which must be served to expire othe
anniversary da te of the original term. Thereafter, seven days notice of
intention to take possession followed by another seven days notice to
sue, etc. This time-wasting process would not be necessary if the two
year tenancy is executed and stamped.
An undocumented tenancy agreement wi ll not spell out the
terms of occupation and the obligations. And the loser is likely to be the
land lord. Although certain covenants are implied, for example, the
ten nt's obligation for internal repairs or to allow the landlord to vie
the state of repairs if he is liable for repairs, others have to be agreed tn
the tenancy agreement or in writing between the parties. A tenant wl o
has not covenanted to decorate the internal areas of the property will
probably not redecorate and will leave the propersoiled nd the
landlord il l not be able to claim the cost of redecoratiOn from hnn.
The

82

Leases, Tenancies And Regulations

Property Management Practice in Niyeria

liability for rates will not be the tenant's if it is not agreed between the

be stolen and end up in th e wrong soup pots.

parties that the tenant will pay. The l andlord is primarily liable.
Landlords' implied covenants include

the tenants'

right to quiet

2.

enjoyment, his liability for structural repairs and not to derogate from

Noise. Against play ing music loudly, practicing on

musica l instruments, or hold i ng rowdy parties.

grant.

3.
Regulations

Hanging out washings. Washings should not be

spread on the balconies or other conspicu ous places.

In addition to the tenancy agreement there may be need to make other

4.

regulations for the good management of the property especially in

Throwing things over balconies.Water should not be

thrown out over balconies. Sand or dust should not be

properties in multiple occupation. They may be in booklet form or left

cleaned off rugs oYer balconies.

simply as circulars handed over at the time of occupation or sent round

from time to time, or even made part of the lease. Some rules and

5.

regulations that may be made include:

1.

Refuse disposal. Proper bins or bags should be used.

Litter shou ld be placed in litterbins or baskets.

Not to keep pets on the premises. This may not be

easily enforced in the case of dogs, parrots, etc. The

6.

Advertisement. Posters or ha nd bills should not be

pasted on walls, doors.

security situation in the country is bad and tenants,

especially foreigners, do not mind lockin g their
rotweillers or bulld ogs within their flats nearly all day.

7.

Visiting hours. Time after which v i sitors will not be

allowed will be stated.

But the rule is necessary otherwise rams, turkeys and

chicken may be kept on stairs landings especially just
before festivals and the manager may find it difficult to

Security. Car boots may be searched, hawkers or

tradesmen prohibited . Use of 'visitor' or 'contractor'

explain his preference for dogs. Such other animals

nam e-tags for identification may be prescribed.

8.

destined for slaughter at festivals may, with special

permission,

be kept

away

from

view

but with

awareness that goats and rams eat grass including the

9.

Dedication. Lifts could be dedicated to stop on certain

floors on ly or for use by officers of certain rank

flowers in the garden. Such animals often end up on

stairways because the owners are afraid that they may

83

10.

Parking.Where parking is inadequate stickers will be

84

Leases, Tenancies.And.R&gulations.

Property Management Practice in NigeriCl

issued to only authorized persons.

The courts
This is the main way of enforcing covenants. But the courts are very

11.

Keeping escape stairs free. The escape stairs and

corridors should be kept clear.

slow. To remove a defaulting tenant may take up to five years as the case
keeps being adjoumed for one reason or the other. The complication
that arises is that during this slow process the tenant overstays the

12.

Moving goods and furniture. Permitted hours for

movement of fumiture or heavy equipment. These
cou ld be permitted at weekends or after office hours.
The moving in of new tenants will be similarly
regulated.

The above are only a few of the topics on which rules and
regulations may be made for the proper use and management of
properties and for the comfort of the occupants. Each property must be
treated according to the installations and facilities. For instance , the
generator insta:!o.:u in one building may be able to carry all load while
the one installd in the other may on ly carry the lifts, water pumps and
common service i nstallations and the tenants therefore must be
compelled not to use their air-conditioners when the generator is on,
when the public power supply has been cut.

Enforcement

original term and it is then usually d ifficult to get judgment that gives a
proper market rent for the period of overstay. After all there would have
been no negotiation to enable the client insist on open market rent. Even
apart from the delays occas ioned by adjournments there are the initial
processes wh ich are themselves time consuming. These are the notices
that have to be served.
Even where the tenancy is for a term of years certain, if the
tenant refuses to vacate, the manager will still have to get hi s client's
solicitor to serve the seven days notice of intention to take possession
and another seven days notice to sue before going to court.
There is also recourse to court in cases involving collection of
owed rent, serv ice charge, electricity and phone bills, water rates, etc.
In some cases some leases stipu late that rent must be paid within a
certain time, sometimes fourteen days or else a certain penalty would be
paid. But the mere provision does not pay the rent. If the tenant defaults
the landlord has to sue.
Of course there are some matters which cannot be adequately
provided for in agreements or if they are provided for there may be no

the tenancy

hope of enforcement. An example is an ind iv idual tenant who dies

agreement, covenants, ru les and regu lations. r fthe rules are bent for
one tenant, enforcement may be d ifficult in other cases in the same
property.

owing ren t, service charge or for other charges. r f he is a man of straw'

There must be the will and determination to enforce

Some methods of enforcement are:

such debt may not be recovered since his estate may be worthless and
his successor may be a petty trader wife. In such a case the l and lord
may not recover the prop rty early let alone the debt! Even if the
deceased has

assets

the manager

Letter of

Bs

86

may

have

to wait

for the

Leases, Tenancies And Regulations

Property Munagement Practice in Nigeria

Administration to know who has authority before trying to claim fiom

the estate. Sometimes the claim may still fail where the tenancy is n ot

Arbitration

documented.

Some leases or tenancy agreements provide that in case of dispute on

Once in a while the tenant just runs away! Even if a tenancy

any issue in the agreem en t there should be recourse to arbitration.

agreement exists the tenant has to be found before a claim can be made.

Often the agreement provides that the President of The Nigerian

And if he is an expatriate and has gone back home the matter is as good

Institution of Estate Surveyors and Valuers wil l

as over. This is one area where the manager may suffer heavy losses

arbitrator. Arbitration is anot her method of settling disputes. The

where he has not been keeping his client fully briefed of dealings with

Arbitration and Conciliation Act, 1990, provides a unified

the tenants, where he has failed to reduce important negotiations or

framework for th e fair and efficient settlement of commercial

discussions into writing and copying such correspondence to the client.

disputes. Once there is an arbitration clause in an executed tenancy

The client may claim from the manager but if the manager had been

agreement or lease, even if one party goes to cou rt on any issue i n th

keeping him fully briefed he may escape. Even if the manager had kept

e document, the judge wil l refer the parties back to arbitration. There

the client informed the client may still hold the manager responsible,

can be a sole arbitrator but the parties are supposed to agree on the

insisting that the manager brought the tenant into his property and

number of arbi trators. [f there is no agreement there would be three

should have known the type of person he is!

arbitrators.

Sometimes, in desperation, or because that is the sort of person

than going to court. I t is also cheaper,

manager.

complicated. The award

is arranged in a magistrates court to

impersonate the real tenant and plead liable to whatever the landlord

l egal

Arbitration is usual ly a quicker route to dispute settlement

he is, the client abuses the court process sometimes aided by the
A fake tenant

nominate the

less formal and less

i s bind ing on the parties even though

either party may sti ll challenge the award on certain issues.

claims to enable the landlord obtain quick judgment for possession and
the real tenant would, all of a sudden, find court bailiffs wave an

Prompt action

ev iction order and throwing his belongings into the street.

Breaches do not always have to lead to legal action. Breaches of rules

and regulations and tenancy covenants can be nipped in the bud by the

Re-entry
This should properly be und er 'court'. Some leases provide for aright

vigilance of the manager. For instance, a manager who sees a goat tied

of re-entry for breaches of covenants. It gives a right to terminate

and insist on its removal. A noisy tenant will be warned in wri ting.

the agreement before the term has run out but actually succeeding in

Owners of items of furniture left on the stairs should be compelled to

terminating it is another matter. To re-enter one must again go to cour

remove them otherwise the manager shou ld remove them. lf the

and take the same length of time already cited above.

land lord had erected a common satellite dish on the roof and the rule is

87

to a stake in one corner of the premises will find out who is responsi ble

that nobody is allowed to install h is own, the m anager must enforce the

88

Leases, Tenancies.And Regulations.

Property Management Practice in Nigeria

rule for it is one of the conditi ons of l ett i ng. That somebody is
not receiving Saud i Arab ia or India is an after-thought. Habitual

3.

To pay for electricity consumed in the demised

premises. The manager must ensure t hat payment is

disregard of th ese rules should be highlighted at Tenants' Association

made in time. Very often the tenant issues a cheque

meetings and most tenants wou ld be embarrassed by this into obeying

when he is aware that NEPA often gives only four

rules and regulations. If a tenant persists he should be written i n no

days for paym ent. The manager loses C.O.T. to the

uncertain terms that his tenancy would not be renewed at t he end of

ba nk. Cash should be demanded and defaulters made

the curren t term.

to pay reconnection charges in case of d isconnection.

Breaches of covenants in tenancy agreements are more

At the end of the term the manager should invite

difficult to control but firm and prompt actions wil l warn the tenant that

NEPA to read off the meter and send a final bill to the

the manager means business. Some headings and pre-emptive actions

tenant for settl ement and fol low up until payment.

are:

Otherwise the landlord wil l have to settle any

outstanding bill before a new tenant can move in.
1.

Rent. Demanding rent earl y and fo llowing up with

written reminders and v isi ts wi ll push the tenants
to act early. If the tenants

have no money thafis

4.

public water supply and the manager is compelled to

another matter but they may be forced to say so early

buy water. He m ust apportio n the bill and collect from

and beg for tim e. There i s no easy way to get mon

t he tenants. Some tenants w ill argue that they should

ey from some body who does not have. In the extrem e

pay l ess than other tenan ts whose boys' quarters are

case the manager may help cut his clien t's l osses by

full of peopl e. Of course the ma nager cannot measure

telling him early that the tenant is broke and they

how

may together find a way to get the tenant out early.

each

tenant

uses

and

these

supply where each flat has its control accessible to

him. Local

Wi thholding tax. This has been discussed above. It

government general

and water rates

charges should be apportioned and collected from the

makes sense to demand rent gross in view of the many

tenants as soon as bi l ls are received.

problems with net payments. The manager can them

the cli ent may fru strate him

water

receives no payment he shou ld cut off the water

who does not have it!

pay the tax an d give the receipt to his cl i ent. B ut

much

apportionments are per flat. He must insist and if he

Even the court cannot force money out of somebody

2.

Genera l and water rates. Somet i mes there is no

5.

Not to sublet. This cl ause usually states that when the

90

Leases, TencmciesAnd Regu!Cltions

Property Management Practice in Nigeria

tenant applies to subl et the landlord cannot refuse in

that hardly does any tenant compl etes h is repairs and

the case of a responsible tenant. Who is a responsible

redecoration obligation before vacating. The property

tenant? This is a problem for the manager for, very

is most often left in an untidy condition. This then is a

often, before the application arrives the sub-lessee is

just ificat ion for the collection of a redecoration

already in occupation! This usually leads

to

deposit which, as has been said before, may not

confusion. If the landlord insists on not approving the

suffice. But because these days rents have been rising

sub-lessee this usually leads to court action. If the

so sharply, the manager and his client m ay feel that

landlord decides to soft-pedal the manager should

they can handle the repairs and still make good money

insist on the subletting being regularized

from the new rents rather than waiting for the tenant to

includes

the tenant

and this

send ing to the manager

the

complete the repairs.

agreement between him and the sub-lessee so that the

terms of the subl etting will be known. But most of the

The foregoing are some exampl es with suggestion s that will

time the tenant may not comply because he does not

help a manager to minimize his problems. He will be firm and vigilant

want the landlord to know that he has collected double

and inspect the premises often but other than t hat all he can hope for is

the rent he is paying! All this may not have happened

luck that he does not inherit too many difficult tenants and that the

if't he manager had been vigilant. But how vigilant can

economy booms so t hat everybody can pay thei r rent for the failure of

he be? The sub-lessee could have been smuggled in to

some tenants to pay rent is not because they do not want to pay or

take over the furniture of the existing tenant.

because they are bad people. [t is someti m es because they have no

m oney to pay because they or their companies are distressed, not

6.

7.

Change of use. Flats could soon become offices or

necessar i ly because they have mismanaged their busi nesses but

beer parlours. Extreme vigilance by the manager is

called for to prevent this.

because busi ness is just bad.

Alteration. It keeps happening. Extra rooms are

created to accommodate the large family and the
garage becomes a shop. The manager must be very
watchful and inspect the demised premises often.

8.

Maintenance of the interior: The manager will find

91

92

h a p te r

Property Management Practice in Nigeria

REPAIRS
Repairs are usually handled by the m anager on the acco u nt of either
the tenant or th e land lord depen d i ng on the prov isions of the
tenancy agreem ent. Usually he represents the landlord u nder his
structural repairs

covenant a nd the tenants

under

the service

charge cla use. Someti mes the tenant asks the ma nager to use h is i nhouse staff or get a con tractor to help him organize his interna l
repairs a nd redecoration work u nder h is own coven ant at h is
expense. It should be em phasized
he re t hat th is should be the trend now, and i t makes sense that
managers
m u st ins i st on using i n-house staff or engage outside contractors
to h a nd le interna l repairs at the expense of the tenants. That way they
ca n ens ure that t he standard of work is what is req u ired. Tenants cou
ld use ch eap l abour to the detriment of the property.
Whether for the tenant or for the landlord or the cost is
debitable to service charge, th e ma nager must ensu re that repairs

The m anager soon learns t hat some clients wa nt to m ake

loads of money from their properti es but may not wan t to spend some
of it to carry out repairs on the same properties. A ma nager cou ld
collect for his client total rents of, say, fifty mill ion nai ra being two
years rent in advance on a block of flats i n Victoria Island an d may
find it d ifficult to persuade him to spend one tenth of that am ount to
change the twenty year ol d generator t h at has been overhau led a
dozen tim es and is now breaking down often and to redecorate the
block an d carry out other repairs that have been long overdue. Tn some
instances the m anager has to risk bei ng sacked by deducti ng
money to carry out very vita l landlord's repairs.
Happi ly t he majority of clients appreciate the need to plough
back some of the rent in to improving their properties and keeping them
i n the condition to earn even better rents. Whether for the client or for
the tenant the agent carries out repai r works i n three ways:
I.
By di rect l abour.

2.

3.

By issuing work orders for minor jo bs.

By awardi n g contracts.

Direct labour
This is used for very small jobs l ike elect rical or plumbing repai
rs

are carri ed out promptly ot herwise small defects cou ld, with time,

which a technician can easily carry out. Other such jobs include fi lling

become major problem s.

Repa i rs involve m oney, sometimes runni ng into mi llions
of
nai ra, and obv iously there must be temptations and suspicion. The
ma nager m ust, at all ti mes, remember that th e money is not his. He

pot holes in the driveway with laterite or bitumen, cha nging oil from

must get approva l of expenditure preferably before they are i n

curred especi ally where l arge sums are i nvolved. He m ust keep

bs and fluorescent

accurate accou nts.

works would norm a lly have been agreed wit h the lan d l ord i f they

93

the generator depending on the generator maintenance agreement, etc.

The manager or the caretaker usu ally su pervises, a nd in some cases,
l eads the performance. Any necessary rep lacement items like bul
t u bes are taken from the store or bou ght

usually with service charge money. The l imit of expen d itu re on such
are to his accou nt.

9
4

Repairs

Property Management Pructice in Nigeria

If they are debitable to service charge the manager is in control on

accountability in mind. But he must be aware that he could be later

behalf of his client on whose behalf he is f'roviding services. If they are

asked to bring details for scrutiny probably at the time he is demanding

to the tenant's account the tenant would have approved the cost before

the next service charge or is asking for payment of deficit.

The manager should prepare a schedule of work to be done or

hand.

materials to be supplied which the contractors will quote for. But in

many cases the manager asks two or three contractors to quote with the

Work orders

result that the quotations vary wildly. For instance, a recent quotation
These arnormally for works considered by the manager as not large

by contractors to design and bui ld a swimming pool in a space shown

enough to warrant the invitation of quotations from contractors. Each

to them on the premises of a block of flats resulted in quotations

manager will design simple request forms for these. As before, the

varying from three million naira to twelve million naira. This happened

manager would have beforehand agreed with his client the maximum

because the manager

cost of work that can be done on a work order. The manager specifies

knowledge about swimming pools.

the work to be done and invites one of the small contractors on his list to

consultant

bring an estimate following which he issues him with a work order. On

approval of the client

the other hand the manager can simply issue a work order based on his

quantity surveyor should have prepared a bill on which quotations

knowledge of costs from his in-house research. This presupposes the

should be based. For specialized work consultants should normally be

existence of an intelligence unit in his firm. lfthe work is debitable to

brought in.

or

and the caretaker did not have enough

Obviously a swimming pool

an architect should
to design

have been engaged

with the

a swimming pool. Thereafter a

When quotations are submitted the manager analyses them and

the tenant the work would have been approved beforehand by him. A
fee of I 0% is usually added on to the cost. The ca etaker would usually

with

his recommendations asks the client for approval of

the

generate the work order but the manager whose office may not be in the

recommended one. Naturally the client is not b::: nd to accept the

property would usually counter-sign.

recommendation. He may even at that point bring in his own contractor

to handle the job. But the manager's interest is to see a good job done.
The issue of the competence of contractors is one that a

Contracts

manager should be very careful of. Now virtually everybody is a

Contracts must be handled in close consultation with the client whose

contractor. The manager may even find that his own staff arc

money is to be spent. If it is a large job debitable to the tenants through

contractors or have companies to whom they manoeuvre jobs. In such

the service charge account, if there is a strong Tenants' Association, the

cases enforcing the highest standard of performance and accountability

Association may insist that its committee liaises with the manager on

become difficult. Following the great oil boom of the ninet o;cn

this. On the other hand the manager is responsible but must always have

seventies, artisans, carpenters, technicians registered contracting nnd

95

supply companies of which they became managing directors and mnny

96

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Property Management Practice in Nigeria

head for Abuja in pursu it of the naira to the extent that the artisan and
techhici an cadre of the work fQICe virtualty disappeared and to fill H1e
gap P,fa op .of hal f-bake\! 4rtis often trained in b c yard
wor s.ftops by untraintXl trainers! The qtJality of work went down and

Some contractors do not even have bank accou nts and th e

manager must be wary of wh oln h e pays mob ilization fees to for that
may be the last time he sees the contractor. Recently, a man a:ger, in a bid

Ghanaian a.nd Togolese artisans and technicians began sellin g like hot

to h elp an old colleague/turned contractor, gave him

the

cakes. This was until the Ghan a-mustgo campai gn sent most of the

whol e seventy thousan d naira for the supply of technical tools. The

Ghanaians home. Furthermore the Ghanaian economy improved and

happy ex-co lleague went to the bank and withdrew the wh ol e money.

the majority of Ghanaians began staying home.

Outside the bank two men on motorcycle snatched

These

days

the

qual i ty of

and technicians has improved

work

by

loca l

cheque for

the money.

arti sans

Obviously the manager was im mediatel y in trouble. The manager

but the manager must still be very

himsel f may be tempted to l aunch his own contracti n g firm. He has

careful whom h e gives work to. The sweet-talki n g man who com es in

to be sure that th e firm is properly staffed, equ ipped and is ta'])abl e

w ith his brief-case

of operating at acceptable level s. The manager uses two ty pes

registered

and

the

beautiful

letter applying

to

be

as a contractor should be received with caution. Many

of contractors.

contractors know noth ing about contracting. Sometimes they sell the
job as soon as they
get it.
The

A , manager

The service contractors

recently h ad the embarrassment of his li fe.

galvanized iron fresh water pipes in the block of fl ats he was managing
needed to be completely changed because having been insta lled at the
time the block was erected twenty years ago, they had now rusted and
water was

leaking into

the

wa ll s. The

manager had

an

architect/contractor in his tennis club and promptly invited him to quote

with two ot her contractors and recommended hiru to his cl ients. His
clieflls accepted the recommention. The architect/contractor hired a
team of half-baked plumbers for the job and went to Port Harcourt on
another contract. Needless to say, the job was thoroughly messed up.
The plumbers committed so m any blunders including using gum to join
hot water pipes. The m anager, not being a plumber, paid the
arc hitect/contractor. Within two weeks there were problems gal ore. In
the end the manager had to spend his own money doing the work all
over. After all h e brought the contractor.

97

These are specia l ized contractors, at least they are supposed to be

specialized, who may h ave been with the bu i lding from the
construction stage and m ay have insta lled the equipment. Thi s is one o
f the areas where, before the building
reneurs make mistakes
they

that affect

stand. Som etimes officials

corporations choose contractors or

because

the equ ipment

i s completed, many entrep

their bui l dings as long as

of companies or governmen t
equipment not

necessarily

is suitable but because they have been

induced. Sometimes they choose wrongly because they d id not consult

experts. They are, therefore, not careful

in ensuring that the equ

ipment is the type that can easily be repaired, that spares are avail
able, or that the contractors chosen are the best for the job.
In one of the prestige bui !dings on Broad Street com pleted
in the early nineteen-ei ghties the water pumps became faulty
immediately

98

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Repairs

Property Mcmagement Practice in Nigeria

after the building was commissioned. Spare parts could not be

these contractors just hand over

obtained. The manager eventually l ocated the installing contractors in

specifications produced

a back street in Oshodi. The owner of the company could not be

conditions in the countries of origin . When subjected to our power

found and the man in the office had no idea where spares cou ld be

surges,

purchased. They had simply, through a good contact in the company

malpractice by service comp .ny personnel including using adulterated

owning the building, got a contract to supply water pumps. Th ey were

en gine oi l, the equipment malfunction, the contractors may find that

not serv ice contractors, just traders. In the end all the pumps had to
be replaced. The owners ofthe building, needless to say, lost a lot of

they cannot keep the impressive long term maintenance schedules.

Whether the manager l ikes it or not these companies are in a

money.

monopoly position. Sometimes each company is the on ly one licenced

to the agents

the maintenance

by the manufacturers overseas

fluctuation, climatic condition, misuse

by the

to suit
public,

Once in a whil e, the equipment installed gets grounded almost

by the manufacturers of the particular machinery to maintain it and

immediately the bui!ding is commissioned. Examples oflifts that begin

therefore the manufacturers may not entertain enq uiries from ot her

malfunctioning immediately or generators that break down completel y

companies for the purchase of spares. Hence the manager is compelled

wi thin months of commissioning elicit questions as to whether they

to buy spares at the prices quoted by the service compan y. The

were new in the first place or whether refurbished equipment had been

maintenance contract i tself is virtual l y a take-iter-leave-it affair. The

imported and installed. There is currently a case in an office block on

manager pays what the contractor asks or the equ ipment gets grounded.

Oyin Jolayemi Street in Victoria Island. A 650 KVA generator bought

They increase prices at their pleasure citing rise in prices index and the

at a cost ofN l 0,700,000.00 and installed in July 2003 broke down

fall of the naira. A II the manager can do is to plead for reduction.

three months later. /\ component was blamed and taken out and sent to

For generators and packaged or unit air-conditioners the

the manufact urers for action. The owner of the property insisted that a

problem may not be as serious as for lifts. The manager may find out

new one

into

that most major lift companies will not take over lifts of different make

Was the generator new? Or was it an

from theirs and if he needs to find alternative maintenance contractors

case that you can never tell about

he may on ly be able to patronize small, sometimes one-man companies

be installed . The generator has just come

operation in January 2004.

illustration of the often stated

back

equipment. Even a new one may malfunction any time.

Happily, with improving awareness, high cost of building,
these occurrences have reduced greatly in recent years.
The manager should ensure that the companies that install

that may not know much about the particular lifts. Major lift companies
will only be interested if they can sell their own lifts to his clients and
removing existing lifts and installing new ones take years. And while
this is being done the manager bears the brunt of the tenants' anger.

sophisticated equipment like the lift and generator are contracted to

Maintenance contracts have the duties of both parties spelt out

maintain the equipment. They shou ld, from beginning, produce long

and usually the manager enters the contract on beha lf of his client. The

term maintenance schedules specifYing visits for minor checks, major

manager must scrutinize the agreement closely even though these are

maintenance, overhaul or retest in the case of lifts. Regrettably, many of

99

100

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usually

Property Management Pruclice in Nigeria

standard

with terms

generally

maintenance company. He should

loaded

in favour

of the

have clauses that protect

his

company and his client's interest inserted. In particular, he should have

damages motors and other sensitive parts.

9. Use of wrong replacement parts.
I 0. Useofunqualified maintenance personnel.

the termination clause suitably worded.

The m ajor installations in a building that cal l for maintenance
contracts incl u de:

Lifts are obviously the most problematic installations and the

manager should establi sh rapport with the lift company and ensure that
calls are responded to quickly. Sometimes the lift service company

Lifts
These are so phisticated equipment and ca ll for close attention. The best
known lift company is the Nigerian Motors Industries special izing on
Otis I ifts. Oth er companies include Bafani, Kresta Laurel, etc.

su ppl i es, on request, a technician that remains in the building to take

care of minor emergencies. However, these techn i ci ans are usually
grossly overpriced. Even where there is no lift technician posted to th e
site the manager's own technicians can be taught to, at least, free
trapped passengers. Another measure that can h elp protect the lifts is to

At the other end of th e ladder are small companies some of

have l ift operators even in lifts that should normally be passenger

which feed on ' rejects' or old lifts which the bigger companies are tired

operated. This can prevent damage that would normally result from

of maintaining.

misuse by not so enlightened passengers but it constitutes an added

cost. Lifts should be programmed to come to floor level when there is

Som l.! Jf the problems that l ead to grounding of lifts are:

complete blackout.

1 . Improper or inadequate care, lack of maintenance.

communication either to call th e l ift to particular floors or in the case of

2.

Misuse by passengers. Li ft buttons are not to be boxed or

emergency like fire. Where they do not come with phones these shou ld

leaned on.
Lift operators responding to 'hold it' calls over and over,

be installed.
Apart from the normal periodic maintenance, overhau l or

opening already closing l ift doors.

retest will al so be necessary and the serv ice company is in a better

Impatient passengers forcing lift doors open instead of

position to advise on these. Some insurers send their engineers

waiting for the next turn.

regularly to inspect lifts and give detailed reports on condition.

3.
4.
5.

Water flooding lift wel ls and shafts.

6.

Hot motor rooms.

These

should

Many

lifts come with telephones for easy

Managers must monitor the service contractors cl osely and

be properly

air

take action when it is clear that the contractors are inca pable of

conditioned.

perform ing satisfactori ly. The performance of the lift maintenance

7.

Corrosion by sea water.

contractors at the Eko Court Complex then being managed by Knight

8.

Erratic, surging

Frank & Rutley (Nigeria) was so bad th at P. C. Nwankwo, then partner

and fluctuating power su pply that

101

102

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Repairs

Property Management Practice in Nigeria

in charge of property management, in what looked like a m il itary

standby generators broke down too. These days there has been

operation, organized securi ty and stopped the maintenance company

tremendous improvement in the international airport but t he same

gaini ng access to the property one morning and served the company a

ca n not be said of the National Theatre.

term i nation paper the same morning. The lifts hardly worked and

A quarter of a century ago central air-condi tioning was in

tenants were having to cl imb up to twenty-one floors to get to their flats.

vogue. It was noiseless, pleasing to the eye and effective. Any m ajor

The compa n y went to court for wrongful termination and clai m ed

building that was still using wall units was n ot rated. Then the probl em

damages. Suit No: LD/294/91

s came. If the chillers went the whole building suffered

the heat.

There

Barri Elevators Nigeria Limited

Plaintiffs

And
Knight Frank & Rutley (Nigeria)

were hundreds of fan coils to worry about, etc. A massive central air
condit ion ing unit to serve a major bui l ding cost tens of millions of nai

Defendants

ra at a time naira had real purchasing power. Keeping

air

The

defendants

counterclaim ed

for

N 1 ,025,000.00.

The plaintiffs case was dismissed and the defendants got judgment
for N 155,000.00.
Managers must however

be carefu l how they terminate

contracts a nd be sure that they are on a sound footing. Oth erwi se

they could l ose h eav il y and their clients may not come to their
rescue as many of them usually regard service charge matters as m
atters that do not concern them .

Air-conditioning
This, next to the lift, is probably t he m ost vita l equipment in high-ri
se bui ld ings in view of the weather whose effect is further complicated
by overcrowd i ng of buildings

th at obstruct proper

venti l ation

in townshi ps. Bad design and parti tion i ng often accen tuate the need
for air-cond i tioning. Exampl es of buildings that need the airconditioni ng to be work i ng effici entl y all the time are the National
Theatre and the Murta l a

Muhammed

i nternational

airport.

Regrettably, the air conditioning in the past often broke down a nd,
once in a wh ile, the

103

centra l

cond itioning plants working was vety expensive and the spares such as

The m ajority of companies now use packaged, split or window

chillers took long to import. Indeed, i t was suggested that because we

units. The popu lari ty of packaged units has been on the rise since the

were not keeping abreast of trends in the countries of manufacture these

nineteen-seventies when architects, builders, developers, managers

eq uipment were imported and insta lled at a time their models were

saw the ha nd writing on the wa ll for central systems. Packaged u nits

being phased out in Europe and the United State of America. This is not

are smaller, cheaper and more manageable and eas ier to install. Instead

to say that there were no buildings where central air-conditioni ng

of serving a whole office b lock it can be designed to serve half a floor

worked. There were and there are still many. But they worked and still

or a flat at a time. That way a whole bu ilding or even a floor in a

work because the owners were prepared to spend the sort of m oney

building does not get incapacitated at the same

requ ired . The major Em bassies a nd oi l com panies have central

compressor can be

air cond itioning working

conditioning now works.

well.

Our international airport

air-

104

ti me. A bad

Repa irs

--

---

Property
NigeriCl

replaced quickly thus minimizing d

iscomfort.
The split unit is also very popular. Some split units serve more
than one room at a time. Wall units are also popular being much less
expensive even though the disadvantage of noise is still there.
To a lesser degree tha n lift maintenance contractors, some of
the air-conditioning service contractors can be very expensive and the
manager must continue being cost conscious. These contractors are not
nearly as indispensa ble as lift maintenance contractors as there are
many knowledgeable contractors about but a manager handli ng a
building with central air-condition ing will not have as much room to
manoeuvre with the contractor as he wil l h ave on packaged, sp li t
or window units.
Some factors t hat lead to maintenance probl ems on a
ir conditioners are use of unqualified technicians, wrong spares,
wrong partitioning a nd electricity fluctuations and surges.
Generators
Regrettably, every serious building requires a standby generator and
often a standby to the standby because the public power supply cannot
be rel ied on. There are some manufacturing industries th at do not
use the public power supply but rely on their own generators a ll the
time. The phenomenon of power cuts arose in the nineteen-seventies
and rose to a peak in the years two thousa nd and one a nd two
thousand and two. The improvem ent noticed in l ate two thousand
and two has not continued as electricity supply is again very poor.
Reasons given for thi s terrible situati on include uncontrolled expa
nsi o n of co nstru ction activities beyon d the capacity of the
authorities to generate suppl y. Adventurous snakes, rats, thieves th
at steal h i gh tension wires, low
105

Management

Prw.:lic:e

in

water level, flooding, industria l acti on, sabotage, sh ortage of gas

have a ll been sa id to contribute to power cuts. Whatever the
reason, poor power su ppl y has added to the cost of goods an d
services for developers and man ufacturers have to take on the
additional cost of installing standby generators. Landlords are a
lso forced to install standby generators and tenants have to pay
extra to keep gen erators fuelled and serv iced a nd these extra costs
are passed on to consum ers in form of hi gher cost of goods and rent.
There are many m akes of generators in the cou ntry and som e
of
th ese are the Caterpillar, Lister, Dorman, Perkins, Renau lt,
Petters, Pu ma, e tc. They com e in all shapes and si zes and from
diverse countries of the world includ ing India with its very noisy
water-cool ed units.
As in the case of l ifts and air-conditioners and indeed any
equ ipment where t he manager is in a position to advi se he should go
for those eq uipm en t that have been tested in the market and for
which spares are easily available. The installing company should be
asked to eflter into a mai n tenance agreement. The best known
contractors are Tractor and Eq uipm ent of t he UAC of Ni geria,
Holt Engineering, Nigeria n Motors Industries, Lordmart, Mika
no, JMG, the list is endless. Generators are very big business.
There are of course m any competen t smaller companies. At the
same tim e there are some maintenance compan ies which are no
better than en trepreneurs who take on the contract but go out
to engage su b-contractors for mechanical or el ectrical works and
the manager should be careful about thi s. The manager shou ld advise
his cl ient to buy a generator that is basic rather than the
computerized, highl y technical set beca use the expertise for repair
ofthese sophi sticated eq uipment is largel y l acking.
Use of u nqualified technician s damages generators. So d
ocs use of wrong serv ice parts, adu l terated engine oil, not keep ing
to t hl

106

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Repairs

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Property Management Practice in Nigeria

serv
schedule.

ice

give rise to the need for maintenance agreements a nd these depend on

the level of sophistication of the building. Some of these are sewage

Boreholes and treatment plants

Boreholes and their pumps require constant maintenance. The plant
requ i res the correct chemicals. A maintenance contract shou ld be
entered into with a competent contractor.

Swimming pools
This may not always require an outside contractor as a knowledgeab le
swimming pool attendant should be able to apply th e correct chemicals
and clean out the pool.periodica lly. The pumps can be ha ndled by the
contractor who handles the maintenance of th e ot her pumps i n the
coni.plex.

Pumps
There are many companies and technicians who can handle these. The
important thing is that they are serviced regularly, quarterly and not ad
hoc when they break down.

Fire installations
These must be checked periodically by the contractor. In particular, the
extinguishers need to be serviced six-monthly, and the hose-reels
checked often since nozzles are favourite items for thieves.
There are a variety of other specialized insta llations that may
107

Repairs

treatment plants, security systems, intercoms, setellite dishes, etc.

General Contractors
The main contractor
It is assum ed that the manager was at the handover of the building and
therefore took respons ibi l i ty for the build ing from day one. His is
the duty to ensure that any defects that ari se within the defects li abi
l ity period, six mon t hs, are taken care of by the contractor. These
are i n addition to defects that would have been pointed out at the
time of takeover which are assumed to have alread y been corrected
by the contractor.
At the end of six months, if the property is in good order, the
arch itect will now issue a certificate of fi nal completion. A good
ma nage r should, however, be aware that, even am ong the
top contracting firms, stand ards differ. Some are solid and reliabl e
for quality and durable work. G. Cappa is an example. On t he other
hand, one or two major multinational contractors have developed a
reputati on for speedy construction that sacrifices the quality of
finished work and after the clients take over their bui l dings lots of
'teethi ng' problems man ifest themselves.
Other smaller contractors proliferate. As has been emphasized,
the manager must be careful to actually properly vet the ability of the
con tractors he puts on h is register. He should categorise them under
head ings such as min or redecoration, major works, gardening,
supplies, car pent ry, cleaning, pest
conditioning.
108

erad ication , generator, air

It is importa nt that the manager specifies exactly what he wants

Property Management Practice in Nigeria

but the expenditure will be justified by the quality and

durability of the work. It must be restated that there are may small
the contractor to do. If he just tells the contractor to redecorate a vacated flat

con tractors that do a good jo b and the manager must consciously go out

the contractor may use the cheapest pai nt availabl e. The manager must

and find them.

know that the lowest quotation is not always the best. Quality material
or paint may be expensive initially but will l ast. What Dulux, Luxol or
Portland may cover in two coats may not be covered in three by some of
the pa int bra nds in th e market and the cheaper paints may fade in no
time. Of course the same paint maker makes several grades of paint to
meet the req uirements of different levels of consumers.
There are so many fake o r poor quality articles on the market
bulbs that do n ot last a month, dangerous or cheap electrical cables,
poor quality locks, substandard cement. The ma nager must insist on
good quality material and high sta ndard of work mansh i p at all time. He
must watch the trend in the market. For instance 'tiger pipes' are
currently the superior cold water supp l y pipes in buildings. Kabel
Metal cab les, made in N igeria are more reliabl e than most imported
cabl es. The

manager must

be watchful

against

refurbished

suppi ied, collected his money and gone away before h e finds out.
the manager

should,

as already

mentioned above, avail himself of the services of an architect or

quantity

Pest eradication
The m anager sho uld ensure that pest eradication and rodent control
con tractors use su i table chemicals and carry out the work carefully so
as not to contam inate food items. Pest eradication should preferably be
done quarterly. Unfortunately, the standard of hygiene is not so high a
nd the neighbour may not carry out pest erad icat ion or rodent control on
his property with the result that a month after the fumigation of the
property those hardy cockroaches and rats are back in ful l force.

and

secondhand material for if he is not careful the contractor would have

In more si zeable works

Cleaning
The man ager must ensure that the c lean ing company is we ll eq uipped
and experienced and is not just th ere to pour water on the floor and get
the dirt more ingrained .

surveyor and thereafter, invite quotations from the small

contracts section of the m ajor contracting firms. Time was when they
were onl y interested in major contracts but they are now on the lookout
for smaller repairs and redecoration works and will do a good job for

Refuse disposal
Refuse is d u mped in a convenient concealed location on the property
eas i ly accessible to the licenced private refuse disposal company that
serves the property. The regularity of cl earance depen ds on the
agreement with the company. The dump should be kept cl ean otherwise it
my prov ide breed ing ground for rats, cock roaches and other pests. One
way of keeping the dumps ti dy is to supply refuse bags to the ten
ants . The stuffed bags are removed by the cleaners each m orning and
taken to the dumps.

they have their names to protect. They may be a little m o re expensive

109

110

Repairs

Many of the costl y repairs that get carried out i n proper ties could
be

Rewinding of electric motors

Virtually every electrician claims to be a rewinder or recoiler of electr i c
motors. Rewound motors often do not last long especi ally if the job
was not done by a competent company. Very often rewinding takes
very
l ong especially when it concerns major equipment such as Iift
motors.

Roofs
Roofs can present many problems for m a nagers. Simple l ong
span aluminium or iron sheet roof are easier to maintain than those
coered with modern colourful tiles or w ith felt. Concrete flat roofs
present t heir own peculiar probl ems. Managers must sel ect roof
repair contractors carefully. Defective aluminium or asbestos sheets
sh ould be replaced with new ones rather tha n allowing the con tractor
to, according to one
'felting concrete a reas a nd applying mastic water-proofing over nail
points and other leak ing areas on the long span aluminium.' This
particula r contractor got the job, did it for N 1 20,000.00 and gave five
years gualantee. A few m onths later when the rains came the roof was
still leaking profusel y. The contractor's defence was th at the
aluminium sheets were very old and that new l eaks h ad deve loped,
not where he had treated! How could a m a nager go back to hi s cli ent
w ith that sort of
story?

Replacement of parts
The man ager must be wa ry of secondhand eq uipm en t like
compressors, generator

alternators, etc. They

hardly last. New

parts should be preferred even though they may cost more.

Long Term Maintenance

111

Propert y Management P ractice

Nigeria

in

dig into the walls a nd replace the burst pipes w i th pvc pipes. That
was ad-hoc mai ntenance as opposed to planned maintenance.

avoided by regular inspection and mai ntenance. Usually, for instance,

Planned maintenance is quite easy with the m ajor installations

nobody bothers about a roof u ntil it starts leaking. But if managers

like lifts, generators a nd air-condition ing since the manufacturers

and their clien ts would have their bui ldings inspected regularly, those

and maintenance contractors produce maintenance schedules that say

tree branches overhanging the buildings would be lopped and dead

what should be done after so m any ru nning hou rs, etc.

leaves on roofs scraped off. Otherwise tree branches may fall off and

The manager should have a com plete set of architectural

damage the roofs and fallen leaves could obstruct the free flow of ra in-

drawings as part of his basic records together with knowledge of the

water or decay a nd eat into the roof covering. Generators wou ld be

history of the bu i ldi ng. If it is a new build ing d rawings are very likely

serviced regularly; th ose little potholes on the driveways could be

to be avai lable. But if it is an old build i ng there may be no drawings

patched up before they become gorges, electrical installations w i ll

and the ma nager m ay not k now the route of the cond u it electrical

be inspected and tested and defects remed ied rather tha n wait until a

wiring r the pl umbing pipes.

busbar exp lodes a nd part of the building is plunged into darkness.

Where there are no drawings the landlord could conceivably

Managers and clients simply react to events. An example was the Eko

b'e persuaded to have a set produced. Alternatively a com plete survey

Court Complex in the n ineteen-eighties when the galvanized pipes in

of

the walls kept bu rsting and water kept soak ing in to the walls. Th ere
was nothing that could be done tha n to wait for each occurrence and

112

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the building could be done. But many clients may not see the need. The
manager may then have no choice but to begin building up his records
the best way he can from when he began managing. He will draw u p a
schedule showing what components should be inspected and at what
intervals, when inspection can be done by in-house technicians or by
outside contractors..or_e _perts. The schedule will be under separate
headings like plumbing, elet ical, drive-ways, roofs, etc.
Routine inspection repotts wi ll be recorded in specially
designed sheets and defects highlighted will be taken care of
immediately. Other periodic reports and those from outside consultants
will be in more detail.
These reports together with the maintenance schedules
supplied by the service contractors will keep the manager abreast of the
condition of the property all the time and the client informed. The client
can then plan ahead how to put money aside for the works.

Certifying repairs
The manager, aided by the caretaker, certifies repair works satisfactory
prior to the payment of the bill. For work done in individual tenant's
accommodation like repair of air-conditioning, plumbing, etc, the
person in the position to certify the work satisfactory is the tenant

Property Iv.fanagement Practice in Nigeria

most common lease or tenancy agreem ents landlords are responsible

for structural and external repairs and redecoration. They are also
responsible for replacement of major parts of installations like lifts,
generators, air-conditioning and such major undertaking as overhauls
and re-tests (lifts). But these are sometimes passed on to the tenants in
the tenancy agreement especially in the high class properties. Tenants
are responsible for internal repairs and redecorations and, through the
service charge, repair of not so major parts of lifts, generators air
conditioning and other installations providing common services.
Contracts should not be awarded when there is no money. Once
in a while, however, the manager will be forced to go contrary to that
rule in case of emergency repairs but he must endeavour to have the bill
settled early. It can be embarrassing for the contractor who has
completed a job to go round the town blackmailing the manager for
debt. He could even go to court. In large property management firms
v isiting days for contractors should be stipu lated. Otherwise the ofli<.:c
will be swarming with them resulting in the staffbeing distracted. Also,
days for the payment of contractors will be made known.

himself who signs on a pre-designed form. It is after such confirmation

that payment is made.

Who pays?
The manager should ensure that the cost of repairs and purchases is
debited to the proper account, nervice charge, client or tenant. Under the
113
114

Chapter

9 I

SERVICE CHARGE
Definition

Serv ice charge, m connection w ith property management, is an

additional rent collected by the property owner, or his managing agent
on his behalf, from tenants and occupiers of a property for certain
maintenance services which the tenancy agreements or leases have
made the duty of the property owner to provide. Service charge cou ld
be a fixed amount or a variable amount. ft is not just tenants that pay
service charge. Property owners al so sometimes pay service charge
where, for instance, the company occupying the property, whether as
the owner or tenant, engages an outside manager to take care of the
maintenan ce of its property. For example, in the nineteen-seventies and
eighties, Sh ell retained the services ofKn ight Frank & Rutley (Nigeria)
to run the services in Freeman House which was wholly occupied by
them. [t is interesting to note that during part of that period Shell were
tenants and, later, landlords. Several property owner-occupiers who do
not want to get involved in property maintenance contract outsiders to
manage their properties. It shou ld be noted that service charge does not
necessarily have to cover only common services. It all depends on what
the parties want it to cover.
Se rvice charge in Nigeria is, however, more commonly applied
115

Property Management Practice in Nigeria

to properties in multiple occupation where it becomes necessary for the

landlord or his agent to organize those common services like gardening,
cleaning and lighting of common parts, maintenance oflifts, etc, wh i
ch
the tenants cannot organize for reasons of im practicability. Examples
are serv ices in blocks of flats or offices or large estates. It must be
mentioned though that tenants could conceivably organize these
services but it is difficult to imagine a landlord handing over his
property to a Tenant's Association to manage! However, in estates
where each person has bought his own house and certai n services are
maintained in common, the Landlords' Association can either organize
the provision ofthese services or contract it out.
Depending on the leases or tenancy agreements, services that
come under service charge could include even structural repairs and
insurance. Indeed, the landlord could, by contract, compel the tenants
to pay for all repairs, maintenance and insurance. But this sort of
agreement will not apply to most properties in multiple occupation.
Most tenants will not agree to it. But the top companies like the Oil
Companies may prefer a si tuation where they are in total control of the
properties they occupy and may therefore more readily enter into ful l
repa iring and insuring leases.

The fixed service charge

This is not of general application in this country because costs fluctuate
wi ld ly and usually keep going up. Many of the components used in
property mai ntenance are imported and, because the naira value keeps
dwindling, cost of imported items keep going up. Government action or
inaction also affects costs. Because the National Electric Power
Authority cannot provide constant power suppl y, each property owner
installs a standby generator. Sometimes there is a standby to the

116

117

Service Charge

standby. A major servi ce charge cost item, sometimes consuming up to

forty per cent of the charge is diesel wh ich fuels the generator. In 2002
the government raised the price of a litre of diesel from N 18.00 to
N24.00 per litre. This price was, in June 2003, raised again to N32.00
per litre. Despite these official prices, diesel could only be obtained at
prices at least twenty five per cent a bove t he otflcial price. Now there is
deregulation. In Lagos the price of a litre of diesel is about N42.00,
regardless of the petrol tax furore. Th ere is no guarantee that this price
l evel will be maintained. Si nce diesel is imported the price is
dependent
on the world prices and with the purchasing power of the naira sti ll
dwind l ing, one thing that is certain is that the price wi ll keep rising. It
is therefore difficult to accurately budget. A manager who based h is
fixed serv ice charge budget for the year 2003 using cost of diesel as
N24.00 per litre must have had a hefty deficit by the end of the year. He
si mply under-budgeted through no fault ofhis.
In making sure that he co llects enough service charge to cover
for price fluctuations, inflation, government interference, and still
allow enough margin to cover hi s management fees often or fifteen per
cent or whatever fee was agreed, t:he manager may end up asking for a
sum th at is too high and the tenants may refuse to pay. Despite this there
are first class properties and serviced apartments where service charges
are fixed and the sort of tenants attracted to such proper ties pay
com fortably.

Fixed service c harge is common where it covers all

paym ents including payment for interna l repairs.

Revisable service charge
Most m anaged

properties are managed

charge where a provisional

etting or

under revisab le serv i ce

sum is co lfected at the time of l

The serv ice charge shou ld normally be agreed also with the

Property Management Practice in Nigeria

commencement of the serv ice charge year and a balancing payment

demanded and collected at the end of the service charge year after
accounts have been rendered to the tenants or occu piers.

fixed or rev i sab le, the amount

usually determined by

the

manager

may lose tenants to sim il ar p roperty with lower service charge. The
basis of the charge and th e qua n tum also need to be u nderstood
and agreed to by the tenants ot herw ise t h ey may refuse to pay.

Determining the amount of service charge

Whether

landlord for if he all ows the charge in his property to be too high, he

The service charge year

of serv i ce charge is

t hrough

infor mation

on

comparable property especially where the property in question is new.

Where i t is a property he has been handling for sometime he will be
able to determine the charge for the next year from the accounts of the
expiring year with allowa nce for the effect of inflation. But he wil l
stil l ensure that the charge is not out of tu ne with what is charged on
similar properties with si milar serv ice charge terms.

The manager will fix a serv i ce charge year which may not necessarily
be the same as the lease year. This is because

the units of

accommodation do not a l ways get let at the same time. The issue of a
service charge year is very important to the manager. If he does not
choose one it would be most labour intensive and problematic for him
to be able to account to each tenant individually at th e end of the year
when he moved in. An incom i ng tenant will usually pay one year's

118

-:...

Service Charge

Property Management Practice in Nigeria

serv ice charge but this payment should be treated as if it was made to

accou n ts which he could have been sending to the tenants, month l y or

cover the period needed to make hi s payment d oveta il into the serv ice

q uarterly, but this is really unnecessary since photocopying of such

charge year for the whole property. Any credit due to him wil l be carried

monthly accounts will further i ncrease the cost of services. It is also

fo1ward into the next service charge year. This should, of course, be
expl ained to him.

doubtfu l if any tenant w i ll bother to look at it. Service charge accounts

could also be rendered quarterly and this could help keep the tenants
abreast with how much is left in the service charge a count. However,

Collection of service charge

from p revious experience the manager could, say, from the sixth month
pay c loser attention to the accounts to know what the account balance

In a new letting, provisiona l serv ice charge should be co llected

withthe rent. In a property that is currently being managed, the

i s. If he estimates that by the end of the tenth mon t h he would be out

of

provisional service charge should be demanded before the end of the

service charge he should, earl y in the tenth month, send out an interim

current service charge year, at least a month before. The amount of the

service charge account based on the full account for nine months.

charge could be the old serv ice charge or a sum which the man:1sa

Please sec Appendices 3a and 3b for sampl e monthly accounts for!"

has atTived at by analyzing the trend of costs over the greater part of

November 2002 to 31st October 2003 for a block of twelve flats with

the now expiring service charge year but such demand for a higher figu

four small ground floor offices currently being handled by P. C.

re must go with a suitable explanation to the tenants. If the manager

Nwankwo & Co. The offices are charged at half the rate for the flats. To

sends the demand late he may face a situation where he is into a new

reduce the volume of this book the accounts for the months of

service charge year but has run out of money which the ever-present

November 2002 (Appendix 3a) and October 2003 (Appendix 3b) are

inflation has eaten up.

use as representative of the twe l ve months.

In practice, over the past years, provisional serv i ce charge

The account summary sho uld be, for the first nine m onths, as follows:
N468,780.00

The manager should therefore monitor his accounts closely to k now

November 2002
December

when he is exhausting the service charge collected. He will find that by

January 2003

N392,685.00

about the ninth or tenth month the service charge is exhausted and

February

N311 ,095.00

by the eleventh month he is already accum ulatin g a huge deficit. Th is

March

N454,350.00

matter
can be treated in two ways.

April

N385,005.00

May

N424,145.00

June

N557,290.00

July

N520.670.00

has usuall y not lasted the whole year for reasons already gi ven.

Collection of supplementary service charge

N373,290.00

Total for the first nine months

The manager should have been compiling monthly service charge
119

N3,887,31 0.00
120

Service Charge

Add IO%managementfee
Total expenditure for the first nine months
Total average cost per m onth, ie, di v ide by
9

N 388.731.00

Property Management Practice in Nigeria

N4,276,04l.OO

to supply at N30.00 per litre wh ile the competitors who cou ld suppl y

N 475,115.67

in tankers were quoting N35.00 per litre even though th e controlled

price
was N24.00 per l itre. The truth was that nobody sold diesel at the

Estim ated cost for August to October end ing which is

the supp l em entary charge to be col l ected
N l .425,347.00
There are 1 2 flats and four sm a l l offices.
Each office i s charged ha l f th e rate for the

government pri ce. With the government attempt to raise the price of
di esel to N32.00 in June 2003, the commodity was hardly avai l able
for weeks and the price went up to as high as N60.00 per litre and has
since remained substantially above N32.00 per litre.
On the question of the actual amount of diesel consu m ed and

flats. Th e four flats make up th e cost for two

flats.

why it is so hi gh, the manager wou ld have, in his explanatory

letter, given extracts from his record of power cuts which his staff sh o

N 101.810.50
Supplementary charge per office
N 50,905.25
Note that a figure could legitimately be added on to the total
cost to cover bank charges at N5.00 to th e N I ,000.00. The bank's
commission on turn over (C.O.T) is a major drain on the man
ager's account even thou gh m ost managers over l ook it and often
wonder
where the m oney has gone. But in thi s exerci se it h as been om i
tted.
C.O.T is also a drai n on the manager's fees because h e pays it each
time h e writes a cheque. One way of minimizing the effect is to n
egotiate a rebate on C.O.Twi th the bank or patroni ze one of t h e new
ban ks whi ch
d o not charge C.O.T on current accounts.
Th e above accou nt will be sen t to the tenants under cover of
a properly worded explanatory l etter. There i s no doubt that the
manager wi ll be asked a lot of questions whi ch be sh o uld have no
problems dealing w ith. Most tenants w i ll pay but the usual one or two
wi ll argue for m o nths. Th e m ost common queries would be on
diesel purchases which is the one singl e item that gulped up nearly
half of the serv ice ch arge. Why was i t not bo ught in five thousand
litres tankers rather t han in drums? The simpl e answer was that the

uld have been keeping religiousl y as follows: NEPA has performed

Divide by 14. Supplementary charge per flat

poorly this year. There was hardy even one day without power
outage. Below are periods when we had outages lasting twenty four
hours or longer during which the generator worked non stop for the
same twenty four
hours or longer:
Januar y 2003
April
May

120 hours between 1Eland 23"'.

24 hoursftom 25'" Ia the 26'" ,
25 hours from the 13'h to the 14'h.
48 hours from the 26'" to the 28'",
75 hours from the 9'" to the 12'h.

mallam supplier has a tanker driver brother who gave h im diesel at a cheaper rate.
Hence he was able
121

June

57.5 hours from the 12'" to the 14'h.

Diesel consumption by the old 290 KVA

generator is as much as one drum evev eight hours so
that on each day oftotal blackout we burnt three drums
of diesel. With rumours of price increase by
Government since March the price crept up first to

N37.50 per litre (March to mid April ), N41.00 per litreji-om May then
up to N56.00 per litre fi'om about 24'" .June. If we have money to buy in
bulk now we can
get it at N48.50 per litre but we do not have. Even if the
supplvstabilizes
we do not believe it will come down to less than N40.00 per litre. The
122

---------------

Seruice Charge

Property Management Practice in Nigeria

new price of diesel alone is even sufficient reason to revise the service
charge now.
At an emergency meeting with tenants, other questions were
asked but in the end the tenants not only saw with P. C. Nwankwo & Co,

charge when the service charge is exhausted.

Collection of service

charge deficit can sometimes be a

fiustrating matter. The tenant knows that costs have risen. He knows
about the cost of diesel since in his office he uses a generator and should

but most paid within a month. The remaining two pleaded cash flow

know what diesel cost. He knows it is usual to give workers an

problems and one was actually disconnected from use of the generator

increment each year. He knows that the refuse d isposal people and the

before the money was produced.

When it was time to demand the se rvice charge for the next

security company have this habit of increasing their charges almost

year it was not difficult for the tenants to accept a new service"charge

But he will eventually pay, especial ly the foreigner or top company

figure based on the above. Indeed the service charge was raised to
N450,000.00 per flat per annum because a borehole was about to be
sunk and the cost of maintaining it had to be provided for.
Appendix 4 shows the apportionment of the service charge for
the year I" April, 2002 to 31" March, 2003 for a commercial property in
Ijora. You will observe the discrepancy on the rates of service charge.
The bank argued successfully that n ot only do they not use th e
generator, they have their own security and cl eaners. The l arge
warehouse occupids were given a redu ction because of the size of
their space and one of the warehouse occupiers mai ntains i ts own
generator.

yearl y. But since hardly any tenant wants to pay more, he will argue.
executives whose bills are picked up by their companies. The self
employed citizen is more likely to argue. Some think they know it all.
And the argument could continue until, in the extreme case, the tenant
moves out forcing the manager to swallow the loss since most clients
think service charge is between managers and the tenants.
Unfortunately, the tenancy agreement may not have properly
tied up the responsibility for service charge. On the above particular
property the manager still has bitter memories of a tenant, a West Indian
turned Nigerian Chief, who bulldozed his way into occupation of two
flats and for the next two years was a nightmare. The man forced
himself into the position of chairman of the Tenants' Association. He

Collection of service charge deficit

If in the above case the manager, instead of demanding supplementary
service charge, had continued providing serv ices he would have run
into a huge deficit at the end of the year. If he has many management
properties and each one accumulates a deficit he will have such a l arge
sum to recover and if the same account is for rent he may find that he is
unable to remit rent to clients with th e consequent problems. It is
therefore advisable for managers to demand supplementary service
123

was determined not to pay any bill and seized every opportunity to
prevent others paying and went from flat to flat campaigning for the
sack of the manager. He would neither pay service charge nor deficit
nor contribute to the overhaul of the generator. He would not pay
withholding tax either. Fortunately for the manager he was in very good
terms with most of the other tenants and gradually isolated the West
Indian. He cut off generator service to hi s top floor flats, then cleaning
service. These did not bother the man. The manager then asked the
security not to open the entrance gates for th e man. But he hired his
124

Service Charge

Property Management Practice in Nigeria

private secu rity but the manager prom ptly barred them from the

t hat the money is not paid direct to the landlord as he may not get it

premises. They could stay outside the doors of the two flats. The man

back. He must be very prudent w i th spending ot hetwi se the money

b rough t i n the poli ce claim i ng threat to his l ife. In the end the poli

may get q u ickly exhausted. He m ust get his priori ties ri ght and

ce dec lined to be involved in a si mple com merci al d isp ute. Final

knowhat expend iture is more important than others. He must keep

ly, t he manager cut off water supply to the two flats. That was when

receipts for the ten ants have a right to query entri es i n the accounts and

the man moved out. But by then he was owing over on e million

m ay rightl y dem and to see receipts.

naira. The manager was reli eved even if i t m ean t abso rb in g such a
huge loss. The man had refused to execute the tenancy agreement and

Th e offer letter for space in a m ul ti -occupied office

block

i t woul d have been a waste of time suing hi m . The l and l ords were u

would n orm ally contain a provision li ke this: 'To pay service charge of

nconcerned . It was not their business.

N2,500.00 per square metre per annum for the provision of the
fol lowing services:-

Management of Service Charge

1 . Main tenance of the l ifts, generator, air-conditioning and

The management of service charge money is pai nstaking and tim

2.

e consu mi ng. I t has to be because a lot of money could be involved.

3. Maintena nce of t he garden a nd refuse d isposal.

For instance, in the above exampl e service charge coll ected on each

4.

other installations.
Cleaning, lighting and redecoration of the com mon parts.
Prov ision of security to t he com m on parts of the premises.

flat as at Novem ber 2002 was N300,000.00 per annum a nd N

S uch security service is to be provided by an independent

150,000.00 on each office totalling N4,200,000.00. Thi s large sum

sec urity outfi t.

does not belong to the land lord and the property ma nager has to ad mini

5. Emptyi ng an d cl eaning of the septic tan ks a nd soak-away

pits.

ster it in such a way as to sat isfy the tenants who paid it at the sam e
time s satisfy in g the property owner. In many ways the manager

6.

Any other serv i ces th at are found necessary fo r the

benefit ofthe occu piers.

is neutral as between land l ord and tenant in the carrying out of his
functions. He must give value to the tenants as well as ensure that th

7.

Employment of staff.

e land l ord's property is properl y looked after and its value enhanced.

8.

Payment of 1 0% fee to the managing agents.

The ma nager collects and keeps the serv ice charge in h

is accou n t. Tdeally this account shou ld be d i fferen t from th e rent

These

services w i ll be elaborated on

in the tenancy

agreement.'

accou nt because, as has been explained, if he h as a l arge portfol io of

managed properties and accumu lates a huge se rv i ce charge defici t, he
w ill n ot be able to rem it ren ts that are l odged i n the same accou nt. He
should ensu re
125

Maintenance ofinstallations
These have been extensively discussed under Chapter E igh t, 'Repairs'.
Bu t it wou ld be an om i ssion not to elaborate furt her on generators,
in
126

Service Charge

Property Management Practice in Nigeria

particular, the issue of fuelling. It seems that NEPA, after some

go out and h ire a set that same day, to serve th e property. The cost

improvement in 2002, sunk almost to its worst performance ever during

h ave reasonably good supply, a short distance away there is hardly any

hiring a generator is q ui te exorbitan t, between N25,000.00 and

N35,000.00 per day for a three h u ndred KVA set though t he dea l
ers

supply. An example is the popular and commercialized Oyin Jolayemi

may t h en gi ve u p to 30% discount before charging for value added

Street area ofVictoria Island which, most of the time, had less than two

tax! The cost of transporting t he generator is also very high and the

hours supply of light daily while private generators were put on the rest

manager may fi nd i t cheaper to m ake h is own arrangements for brin

of th e day. But when the offices closed the street blazed with light! A

gi ng the set to si te and retu rn ing i t to th e owners l ater. He shoul d,

reason suggested by one tenant was that the NEPA officials thought

from th e serv i ce charge accou nt, make the i n itial down-paym ent

only ' big men' had offices there and should be able to afford generators.

which is usually one week's h i re cost pl us transpor t to and fro.

The issue of who pays for the hire of a temporary gen erator and
overhaul of the broken down one wi ll depend on the agreement with the
tenants. U nfortunatel y this i s hardly ever spelt out in tenancy
agreemen ts. But it stands to reason that the tena nts wh o use the
generator shou l d pay for the over ha ul. But t he tena nts wi ll fight
the manage r over this. And once the la ndlord is aware of the battle goi
ng on he w ill ins ist that the tenants pay. ln practice, m any ma
nagers l ean towards th e argumen t that the land l ords pay because the
work is major. And la nd l ords, at the end wi ll -pay when tena nts t h
reaten to wi th hold the m oney from th e next rent!

the first ten months of2003. While some parts of the same suburb may

Another explanation given was that staff of the banks which proliferate
the street actually regularly tipped off the NEPA staff to ensure th at
electricity was not supplied to enable them make money from the
purchase of diesel. Unfortunately, the service charge account for t he
property in Idejo used as example, the performance of NEPA has
degenerated since the account was rendered to the tenants. Th e
managers wi II have a lot of explaining to do inNovem ber 2004.
Generators are being over-flogged. A set that shou l d be
serviced every two hundred running hours may end up being serviced
every three weeks. This leads to frequent overhauls, about once every
two years.
Once in a while the generator suddenly breaks down! Now the
sort of tenants t hat pay rents of N2,000,000.00 per annum are not
the type to be expected

to wait without standby

power while the

generator is being opened up for repairs. They have paid their rent
and expect serv ice. The manager should inform the tenants that there
is a m ajor breakdown and explain

what he is do ing to provide

temporary power s upply a nd efforts to repair the old set. He should

say how long he expects the repairs to take. He should also inform his
client. He should
127

or

Diesel.
Diesel deserves to be singled out for fu rther comments. As has been
said, it is the singl e most expensive item i n the service charge
account. Property managers dea l with the issue of diesel i n the serv i ce
charge in two ways.
Making ser-vice charge inclusive of diesel. The
1.
example used in th e serv ice charge account at
Appendix 5 is incl usive of d iese l. Some m a nagers
find it easier to col lect one charge rather than go i ng
to the tenants for a separated i ese l ch arge.
128

Service Charge

2.

Charging for diesel separately. This is favoured by

some managers.They send separate bills and accounts
to tenants for diesel and they feel that i t works well.
Some account for it monthly. But there is the example
of a property where a manager introduced this and
paid for the first month's supply of diesel in an office
block of twelve tenants in Ijora. Alas! One tenant
refused to pay. He said he did not ask for generator
service. What busi ness was he doing on the premises
that would warrant such additional huge xpenditure?
The manager absorbed that loss and discon nected him
from generator service. Another tenant queried basing
the apportionment on square metre basis. He had a
large office all right but what appliances was he using?
Some managers allow tenants to organize and buy diesel
themselves. Whichever way a manager has tested and found acceptable
he should carry on. All that can be hoped is that NEPA shou ld wake up
to its responsibility so that generators can be past tense. Ghana, our
neighbour, is alleged to have recently celebrated seven years without
power cut. It is hoped that we, the giants of Africa, in the not too distant
future will have something to celebrate and that generator dealers,
instead of growing in numbers, can carry their wares to another country.
Water pumps and tanks
There should be a maintenance contract for the water pumps to be
serviced quarterly. In add ition, because of the occasional periods of
water shortage, a booster pump should be installed close to the public
mains to suck water directly into the premises. The manager should also
investigate alternative positions from which supply can be connected
into the premises as the connection to the mains may not y ield water

l'mperty Management Practice in Nigeria

always. The water tanks themselves should be large enough nnd

washed quarterly for very often foul and muddy water is pumped into 11
In periods of water shortage the manager should arrange with
tanker owners for suppl y. In Victoria Island now a tanker of water cosI
between N2,500.00 and N4,000.00 depending on the nearness to th
sou rce of supply. Sometimes very foul and smelly water oozes out ul
the mains. The manager should suspend that source of supply until
good water begins runn ing. Water is not part of service charge and th
manager should, if a lot of water is being bought, prepare a statement nl
the end of each month taking care to add his fee and collect from thct
tenants. For the past severa l months properties around the Fcdcml
Pa lace Hotel end of Adeola Odeku Street have been experiencing acul
water shortage and tanker drivers are making good busi ness. In th
property being used as example the water purchases during somo
months ran as high as N200,000.00 naira. If the manager treated th111
supply of water as part of service charge he would run out of money
very quickly. But the cost of an occaional purchase of water shou ld
i nto the service charge account. The manager should persuade his
client to sink a bore-hole.
Common parts
This has been partl y treated under Chapter Eight. Stairways walls
Jtcl soi led easily from greasy hands and should be repainted
yearly 11 aga inst the external wh ich should be redecorated once in five
years. 1 he stairs railings shou ld be polished often and the stairs kept cl
ean. Bulh that light the stairs should be replaced as often as they get
burnt. 1 he
manager sho uld teach his site staff to be always aware
thcu
StliToundings and not allow litter, especially the new menace pur
water' sachets. These should be picked up with the ubiquitous pln!illl\.

or

130

Service Charge

Property Management Practice in Nigeria

bottles and put in litter bins. Escape stairs must be kept free of broken
down furniture, cartons and other household or office equipment.

The plaintiffs were tenants of a flat which they use as offices in

building at Plot 258 Kofo Abayomi Street, Victoria Island, managed
by Knight Frank & Rutley (Nigeria). They usually gave the keys to the
operatives of the private security company guarding the premises,
Lion Guards. One day their office equipment were stolen. They went
to court on 19lh Novemeber 1991 claiming that the guards had given
the keys to a stranger who entered their offices and removed their
property. They claimed N417,820.00. The case is now dormant at the
High Court and it is doubtful if the plaintiffs still have the appetite to
proceed.
Suit No:LD/1989/92

The garden and refuse disposal

If there is a sizeable garden the manager should identify a good
specialist contractor and contract the maintenance out. But good
contractors are few and he may find that he has employed somebody
who just knows how to cut grass. Contracting the job out may be more
expensive but more effective. For a smaller garden a gardener should
be employed. Shrubs should be regularly trimmed and tree branches
lopped to prevent damage by falling branches and for
aesthetics.

Muyiwa Oyewole
AND

Security
The manager should seek to limit his liability by contracting out the
job of security. It is assumed that if there is a theft or burglary the
security company will accept the liability. That may be so but the
manager does not escape entirely. After all, he brought in the security
company. He shou ld employ a tested security firm since some of these
firms simply exploit unemployed, untrained people who know
noth ing about security and dress them up in their uniforms. These
'guards', at night look for some cool corners, light their mosquito
coils, and go to sleep and there are many cases of tenants, tired of
hooting their car horns, climbing the entrance gates!There are two
ongoing suits on the issue of security that should interest property
managers.
Suit No:LD/2735/91

Knight Frank & Rutley (Nigeria)

Defendants
This is another case of burglary dating back to 1992 in a
property in Ikoyi. The tenant went to court<:laiming from the property
managers. The case is still in court but is being vigorously prosecut d
by the plaintiff. Hopefully judgment will be delivered soon.
Security guards can be useless and frustrating. One company
executive occupying a whole house had this story to tell about his
security guard. The company executive usually got home from work at
about half past eight in the evening and each time the security guard
delayed opening the gate because he was praying. One day he asked
the guard whether he was employed to pray. He was shocked at the
reply.
'Oga,see me ah be small man and ah get one bad leg. You tink say ah
fit
catch robber,? Na only God dey protect us. Dat is why ah dey pray

H.Pierson Associates
Plaintiffs
Limited
AND
Knight Frank & Rutley (Nigeria) Lion Guards Limited
Defendants

evertime make God dey watch house!' Needless to say, the company
executive was speechless.

Plaintiff

131

One reason for the poor work done by security guards is

that they almost always keep two jobs, one by day and another by
night.

132

Service Charge

Property Management Practice in Nigeria

Sometimes these guards watch two sites at the same time! They report

checked and monitored especially as pose reel nozzles get easily stolen.

for duty in onesite and get another gu ard to cover for them while they

Fire extinguishers should be serviced six monthly and bad ones

report to another s ite. Someti mes the securi ty corppanies unwittingl y

changed. It is helpful for tenants to be made aware of installations n

employ robbers who masq uerade as gu ards to survey suitabl e

landings and corridors adjacent to their offices so that they can help m

properties for their nefarious activi ties. Very often some guards

monitoring them against thefts. But this will not remove th_e

disappear following robbery incidents.

responsibility from the manager and his site staff. It would be useful1f

As an aide to security the manager should get his client to raise

trained fire fighters are part of the security force as they would be more

boundary wa lls and top them with concertina or 'razo r' or even barbed

familiar with fire installations than the ordinary security. The Nigerian

wire. Security protectors to ent rance doors and burglar-proofing to

Ports Authority has a large pool of fire fighters and these often seek

windows sh ou ld be st rengthened. A lso a well-eq uip ped gate-hut is

better pay outside and are usually available for employment. The

an advantage. It can have a TV camera insta lled for viewing the

Federal Fire Service should be invited to assess the fire installations and

street. There could also be intercoms with whi ch the gate could comm

when their recommendations have been satisfactorily carried out

unicate with flats. This cou ld eliminate unwanted vis i tors. Car

certify the buildings fire measures as being satisfactory. Escape signs

identification
stickers are also usefi.JI.

will be
locations.

Emptying and cleaning of septic tanks and soak-aways

Part of Lagos is water-Jogged and quite often, badly constructed septic

Swimming pools, boreholes and treatment plants

It i s necessary to engage competent contractors for the maintenance

tanks fi l l up sometimes every three m o nths. And the contractor that

of these.

positioned

at

appropriate

empties it may submit bills that suggest he made so many trips with the
tanker to make one wo nder ifrt is a bottoml ess pit. Bills are according to

Other maintenance services

the number of trips made. The caretaker therefore

Refuse disposal will be contracted out to the privately licenced disposal

has to be

know led geabl e enough to know the capaci ty of the tanks. A good

companies. There is usually a bin located near the entrance to the

contractor must be employed in the first place and h e w ill do a neat job
seal in g up the tank after evacuation. It will be n ecessary for the

property and it should be kept neat always.

Pest eradication and rodent treatment by competent

manager to adv ise hi s client to rebuild a tank wh en it cl ear that the wa l

companies sis done every six months. Maintenance contractors should

ls are weak a nd water is com ing into the tanks from th e surroun d ing

be engaged for the satellite dishes and cable systemenance.

soil.

Other services the manager thinks necessary

Fire fighting equipment

These could include introducing any common services that were not

Hose reels, alarms and sprinklers, where insta lled, sho uld be closely
133

134

Service Charge

prev iously there and which the manager thinks would benefit the
tenan ts. Th e manager could carvt; ou t play areas for children and
in troduce swings and other ft.!allll't.!S for the amusement of tenan ts'
children. If the garden is largt; eno u gh concrete benches could be built
under trees. The manager co uld get the property linked
neighbourhood security o r v igi lant <.: ser
vices.

to

Staff
The property manager's grt.!atest asset is his staff. He cannot manage
his portfolio alone and must recruit staff. Wheth er h e succeeds or fails
wi ll depen? on the quality a n d adequacy of the staff he recruits. He
would
n ormally get his staff by advertis ing or through introd uction by
friends, or from propt.!rtit.!s prt.!v iously staffed which he has taken
over. Some staff wal k in or wri te in applying for jobs. Whichever
method he uses to
get these staff h e must be very choosy to get exactly the sort of staff he
requires.
The manager must not saddl e him self
with
li
abilities vicari ously and should ensure that he recruits staff of
undoubted integrity, industry a nd v igilance. He sh ould ask for
references a nd get
guarantees o f hon es ty. fn practice these a re difficult. Many people
give glowing referen ces for people they may n ot even know. Unfortu na
tely, too, the l evel ofh oncsty of some staff is not as h igh as it should be.
Day to day property management is l abo ur intensive and
entai ls a lot of correspondence. Staff will have to sit at tenants
receptions waiting for the rent, rates, elec trici ty or water contributi ons,
serv ice ch arge ch eques, etc. Th ey will supervise contractors brought
in
to carry o ut some work, and genera lly assist t h e manager in the task
of managing, organizing and contro lling the property po rtfolio.
The number and type of s taff wi ll depend on the type of

1
3
5

Property Management Practice in Nigeria

property. A residential complex being a twenty-four hour affair w ill require

more staff than a comparable office complex where majority of the staff, except
the security, go home in t he evening. The following cad re of staff will be
needed

for effective property

management d epending on the size and sophi

sticati on of t he complex.

The resident manager.

He sho uld have appropriate qua l ification . In the soph isticated building a n
engineer should be th e resident manager to handle the day-to-day property
main tenance. He shou ld be a grad uate or Higher National Dip l om a certifi
cate

holder,

of electrica l, a ir-conditioning or mecha n ica l bias. For

smaller and less complicated buildings he could be an Ord inary Nationa l Dipl
oma certificate holder, a City and Guilds Final or Intermediate certificate ho

lder. Even trade test certificatt.! holders with sui tabl e experience wil
l do. Sometimes there could be good caretakers who do not have
educational certificates but an.:
qualified by hav ing suita bl e experi en ce.

Why an engineer or technical person? In a bu ilding, many of t ht:

prob lems are electrical a nd plumbing. If the lift, the generator or the ai r
conditioning develops a pro blem, the engineer or techni cian is in it
better. position to understand what the problem is and what to do. I n
some cases he may be able to sol ve the problem, without each tilll L'
hav ino to call a contractor but he will be mindful of tampering\\ itlt
equipm ent whose services have been contracted out. He shou ld be abk
to repair si mple electrical panels with the assistance of his technicians.
He can, with his staff, cany out works such as el ectrical wiri ng,
changing of sockets, etc.

Service Charge

Property Management Practice in Nigeria

Suitability for the property. The calibre of the engineer will depend
on the size of the property. It will be wasteful to send a highly
educationally qualified engineer with many years experience and pay
him a salary of, say, a million naira per annum to manage a block of
twelve flats with total service charge of, say, N3,600,000.00 per
annum or three thousand square metres of offices where total service
charge at N2,000.00 per square metre per annum is N6,000,000.00.
Not only will his emoluments overburden the service charge account
but he will not be fully employed. The calibre of engineer required to
run Wema Towers (8082 square metres), or Eko Court Complex (159
flats and 7 shops) will be a misfit in a property like Wesley House
(1980 square metres).

of problems which he cannot solve. Night technicians are necess:11)

mainly because of problems of power failure when these technician'\
have to be present and alert to change over to or from the standby
pO\H 1

Ability to communicate. He should be able to communicate with the

tenants for good communicationSolves many of the problems. In the
larger complexes he must also be able to write acceptable letters and
will have a typist for the property manager's office may be far away.
Should he live on site? If the facility is there, yes, he should live on
site. But with the catalogue of problems these day, no water, power
off and on, he may not enjoy it. In a complex, say, in Ikoyi or Victoria
Island, a suitable house or flat for a resident engineer may be worth the
same rent as the units let out. Not many property owners would
tolerate a staff occupying a house or flat from which he can collect
a rent of up to N3,000,000.00 per annum! Happily, this debate
may no longer be necessary with the advent of the GSM
telephone which has made property management easier. In a large
complex there could be a room for the night electrician who should
have a GSM handset with which he can reach the engineer who may be
living far away for directions in case
137

as the case may be.

The assistant engineer
In large complexes they are necessary to assist the resident engineer
anti to deputise for him when he i s absent. Depending on the size of
th : complex he cou ld be a graduate.
Technicians
They could be electrical, mechanical or air-conditioning technician'
swimming pool attendants, plumber!;. Generally they should he
educated enough to write reports on the property and take notes ol
instructions. Depending on the property they could have City & Guild
Final or Intermediate certificates, Trade Test 1, 11 or III or be quali n
d
by experience.
Cleaners and gardeners
They do not need certificates but must knowwhatthey are doing.
Contract or directly employed security guards and firemen.
Enough has been written on them.
Where the manager is taking over a building a lready tenantl.:d and
where there are already staff pu t there by the client or by the outgoin
agent, he will need to interview them to ascertain that th<.:y llll'l'l
r<.:quirements. He will also decide how many of them he really lll'l'd
lie will need to transfer some of them to h is other manag.cnu.:
nl
138

Service Charge

Property Management Practice in Nigeria

properties and bring in staff from his other properties already used to his

st ipulated eight hours a day are treated as overtime and paid at a higher

system. This is particularly call ed for where t he parting of ways

rate. Jn practice, however, not many serv ice charge accounts can carry
this overtime paym ent. Salary for staff is therefore all-in, gross, no

between his new client and the former managing agent was not cordia l
and there may be the danger of sa botage.

overtime or extra payment for Saturdays, Sundays or public holidays.

The important thing i s that th e manager must see the need to reward

Organising the staff

hardworking staff by means of awards or special bonuses and to make

the basi c pay higher th an in firms where overtim e is paid. It must be

In a multi-occupied office block only one or two technicians, the

fireman and the security guards need to work nights. The one or two
technicians are necessary because they know where all the v ital
switches and installations are and should be able to take any emergency
action necessary particularty in case of fire outbreak. This job could
easily have been assigned to the security guards but the l evel of
education of some of them is not always as high as is necessary
especially where they are not full staff of the manager but are supplied
by contractors who, in many cases, pick some layabouts and give them
uniforms, collect the contract fee and pocket most of it leaving the
guards to pilfer to supp lement their pay. These days there are many
good security outfits that employ even graduates and these could easily
handle any problems at night. But they are expensive. Where funds
permit the manager shou ld recruit one of the better security companies
and let them handle any emergencies that may occur at ni ght.
The engineer and staff work days with the technicians
resuming as early as six or seven o'clock in the morning to turn on the
services and closing twelve hours later. Sometimes they work l onger
hours when, for instance, there is a board meeting l asting into the night.
One or two technicians will work on Saturdays and the engineer should
work some Saturdays especially to supervise major contractor's work
which should preferably be carried out at weekends. For the staff,
exc luding the engineer, Saturdays, public holidays and hours over the
139

said that emoluments will depend on the type of property. !n the high
class property where tenants pay very high serv ice charge it
should be possible to meet a ll l abour code requirements for staff
including overtim e, med i cal a llowan ces, etc.
Over Christmas holidays when the head office may be closed
the manager will ensure that the engi neer or caretaker is given enough
money for any necessary purchases during the pe riod. Major items like
diesel would have been stockpi led to last the period.
Management of a residential complex i s rather man.:
compl icated as it is a twenty-four hour operation. The resident engineer
will work six days a week a nd shou ld be ready to be call ed up at odd
hours to tackle one problem or the other. The assistant engineer may
need to work sh ifts, eight h ours three shift or twelve hours two shift. I lc
may be paid ash ift al l owance but as h as been sa i d above, sa laries in
lhc average property are all-in gross. Th e technici ans and the security
wi II work the same shift as the assistant engineer for ease of superv
is ion Other staff wi ll work days.
Occasion ally, staff have to work a whole day or several days
without going home and a rrangemen ts have to be made for necessary
expend iture and an em erge ncy roste r wi ll be prepared . Such
occasion would be durin g stri kes like the recen t N iger i a n Labour
Congress lcd stri ke when sta n h:1d to rem a in at their work places
for eight day-.
140

Service Charge

Property Management Practice in Nigeria

During such events there may be no transport and any workers that dare
to go out may fall victims to Area Boys. So the set of workers on duty
before the commencement of the industrial action will rem;in on duty
till the end of the action.

particular staff be removed, the manager must remove the staff.

Be.cauof poverty
some workers are in the habit of
commuting their leave into cash payment. This should generally be
disallowed as nobody can really work efficiently for more than a year
without loss of efficiency. Also, the tendency for workers to cover for
others for long periods should be disallowed for quite often these
workers use that as cover to keep two jobs.
Staff performance
The success of the manager depends on the quality of staff he has and,
as has been mentioned earlier, he should be careful in selecting his staff
and should be quick to remove those who do not measure up. The areas
to watch outforaremany and include:
Indiscipline
Staff are sometimes rude to tenants. No doubt there are some times
when tenants are themselves unnecessarily rude to the staff or even
assault them physically but a staff fighting with the tenant should, even
iffou nd innocent, be removed from the staff list or sent to another site.
Then the engineer or the manager wi ll take the matter up with the tenant
to ensure there is no recurrence. Property management has a lot to do
with public relations and the staff should be taught how to deal wi th
tenants even when they are rude. This is not to suggest that staff shou ld
grovel. On the other hand, the manager shou ld be aware that since the
salary of the staff come entirely from the tenants, they are indirectly the
employers. If, for instance, the tenants of a building or the client insist a
141

Begging
Things are very hard these days. Sometimes the manager wonders how
the staff he pays six or seven thousand naira a month ali-in manages.
And that staff probably has a wife and eight children. Simply, staff look
for ways to supplement their pay. Examples abound of security staff
who should be at the gate leaving their duty post to carry a tenant's brief
case to his flat. He expects a tip. Often, certain tenants are more popular
than others because they are more generous with their tips. Staff often
have tales of woe for tenants. His wife has had a baby and he has no
money to release wife and child from the hospital. His father has just
died (probably for the fourth time) and he has no money to bury him.
The manager must not allow his staff to be a nuisance to tenants.
Stealing
Unfortunately some staff steal either from tenants or from the store or
from installations on site. Diesel and engine oil are popular items for
th ey fetch a lot of money. In the Victoria Isl and property used as
example above, a foreign Baptist minister was in the habit of buying
diesel from a particu lar security guard in the property until the guard
was caught red-handed and absconded leaving his month's salary.
Another was fond of requesting for money to buy engine oil, wh ich he
often never bought, for the ailing generator until a tenant exposed him!
But it should be noted that tenants' stewards, drivers, maids also do their
share of stealing. The manager and the caretaker should be aware of the
possibility of thefts and should always be on the alert. Thefts will not
on l y dent his service charge account but also his reputation.
Other items that get easil y stolen are fire extinguishers, whole
142

Service Charge

hose reels, n ozzles, air-cond it ioning compressors, el ect rical fi

ttings li ke wa l l pl ugs, sockets, fluorescent fittings, wa ll brackets, store
items, tools, etc. Ot hers are whol e cars, motorcycl es, view mirrors, car
rad ios, generator parts.
The steali ng of and conversion of tenants' rent or service
charge cheq ues or cash also happens. Ch eq ues coul d d isappear from
th e man ager's office or en-route to the ban k. Rogu es, som e years
ago, devised t he gam e of opening an accou nt in th e m anager's com
pa ny's name wi t h forged papers and cl ear ing t he cheq ue before
the agent knows that his cheque is missing. An d h e is soon embro
iled in an argument wi th the tenant as to whether or not t he tenan t pai d
rent at all.
Vigi lance will min imize l osses. Prompt dism issal of gu il
ty staff is call ed for with ded uction from en ti tlements to repl ace
th e m iss ing item. More serious losses will invol ve the pol ice. But
such cases last years and often are simply a waste of ti me. Once i n a
while the poli ce rem ove all the secu rity a nd an y oth er staff available
to' aid thei r
i nvestigati on' because som ething is m i ssi ng. Very otlen th is leads
to no thi ng and the m anager will spend money to h ave his staff re
leased!

Collusion with contractors

Staff cou ld encourage contractors to i nflate cont ract costs for a share of
t he proceeds. A contractor could supp l y ten tri ps of sand and get pa
id for twenty. Staff cou l d certify paymen t for jobs not done. Staff could
be used to carry out m inor jobs i n the managed property and a
contractor's bill is produced. The ma n ager simply has to be vigilant.

Accounting for service cha1ge

Property Management Practice in Nigeria

By th e en d of the service charge year an account

is prepared . . Unfortu nately, in thi s i ntlation -ridden
soci ety the accou nt wou l d
1
4
3

usually show a l oss. And th e co l l ection of th e resul tant defici t may be delayed

In Appendix 3 a and b wh ich are take n from t he ac t ual accou

because some tenants will argue even if the manager, in the covering letter to the

nt of the property in Victoria Island used for illustration, the acco

account, has fully explained why th ere is a deficit. Th e truth is that people gen erally

unt showed a surpl us! Th is on l y happened because t he manager had

are against paying more. Some argue because it is their nature. But where the m anager

ru n into prob lems when the serv ice c harge was exhausted in Jul y and

h as been reasonab le the great m ajority of ten ants w ill pay. For some ten a nts it m ay

he had to prepare a n accou nt after nin e mo nths operation and justify

just be that busi ness has been bad and they do n ot have the money. Som e w i ll p lead

the need for the service charge to be revised upwards by at l east a

for time a n d cite poor cash flow. In some cases tenants may dem and t he account

third! Luckily for him, after many questions, th e tenants paid. But this

for the expi ri ng or expired year before pay ing th e depos it. This may drag the

has been fu l ly dealt with earlier

manager into fi nancial prob lem s since h e wi l l have to contin u e prov i d i ng the

As can be seen from the account, expenditure is u nder d

services wh ile trying to convince the tenants to pay. Happi ly, the computer has eased

ifferent headi ngs such as staff, generator m ain tenance, diesel, pl

the life of a manager for if t he accounts clerk had been doi ng h is monthly account

umbing, etc. More

a nd presenti ng it to th e m anager, th e last m onth's account cou ld be avai l abl e a few

for

days into the new month and t h e years service charge accoun t can be ready even two or

accou nt be sent to each tenant but th e l and lord wh o h as a righ t to

three days into the new service charge year.

query a ny entry shou l d be

complicated accounts wi l l

incl ude headings

I itts, air cond i tioning, swim ming pools, etc. Not on l y will th e

144

Service Charge

Property Management Practice in Nigeria

copied.

major disadvantage of contracting security out is that the guards may

not owe allegiance to the property manager.

The example is for a simple block of twelve flats with four

small offices and an outbuilding. This property is headed by a City &

Guilds Final Certificate technician earning Nl2,000.00 per month (in
2003). He also has a day technician assistant and a night technician each
earning NlO,OOO.OO per month. There is a gardener (N9,000.00
monthly), a cleaner (N7,500.00 monthly), three day guards and four
night guards (security is contracted out). The above salaries have been
reviewed from 1"January 2004.
The larger the building the cheaper the cost. For instance, even
for a twenty-four flat block the cost does not have to double. A slightly
more senior caretaker may be employed say at a monthly salary of
N15,000.00. Perhaps one extra day technician, one more gardener if
the garden is much larger, perhaps one extra day and an extra night
security may be needed. Employing a security company may seem
more expensive but this not so. The manager pays the company a
certain sum per operative, say N15,000.00. On the other hand, if he
d ecides to employ security staff direct he may pay each experienced
guard N9,000.00. But a lot of things go with it. He may be compelled to
pay overtime. He will give leave allowance, he may have to give
medical a llowance, Christmas bonus, increment each year, etc. Then he
may experience what Knight Frank & Rutley (Ni geria) just escaped
about 1982. There were so many properties where directly employed
security guards were deployed that they got together and formed a
Union and got affi liated to the Labour Congress and a strike was
averted at the last minute. This was one of the reasons the firm chanaed
b
its policy and began contracting security out. Another reason was that
th ere were law suits following robberies. Quite often, the security
guards disappeared by the morning following the robberies. The one
145

That the landlord has a right to see and criticise the service
charge account should not confuse the manager into allowing him to
control the expenditure or forcing him to incorporate his costs. The
tenants will spolandlord's costs and argument may result.
In a complex the manager may experience an argument from
the occupants of the ground floor, banks or business houses, who refuse
to pay a share of the cost of!ift maintenance on the grounds that they do
not use the lifts. This shou ld be resisted. The lifts are available to them
as to other tenants. Besides, their patrons upstairs use the lifts. Where a
bank on the ground floor has been permitted to install its own generator,
it should not be asked to contribute to the cost of maintenance of the
generator that serves the other tenants. In these days of frequent power
cuts banks and internet companies that work longer hours and must
provide conducive environment for their customers normally want to
install their own generators since their working hours differ from the
other tenants. It is also possible that the common generator m ay not be
able to carry the extra load of the equipment of banks and other
business houses and these necessitate these companies installing their
own generators. But the manager must not allow many generators on
the managed premises as these increasefire risk and cross theft of d iese
I!

Relationship between rent and service charge

In days gone by, as a rule of thumb, service charge was said to
approximate ten per cent of rent. But in practice is that true today? In the
nineteen-seventies and eighties when landlords called the shots, when
first class properties were in short supply, they forced tenants to take

Seruic:e Charge

Property Management Practice in Nigeria

over responsibility for all outgoings including insurance and even

structural repairs. Lettings were on condition that management fee be
debited to service charge. Despite these, the manager was still able to
run the services at N27.00 to N32.00 per square metre per annum at a
time rents were between N270.00 and 320.00 per square metre per
annum on first class commercial properties in Lagos. Service charge
then approximated to ten per cent of the rent.
While this was true of the high rent areas ofLagos Island , Ikoyi

accommodation will fetch rents ofN2,000,000.00 upwards while the

service charge wi ll be a minimum ofN300,000.00 per annum again
depe1.1ding on services available. Outside these top areas the rents are
lower while the cost of services remain the sam e. A swimming pool wi ll
cost the same to maintain at the same level wh ether it is Victoria Island
Tkoy i , Mush in, Ibadan, Calabar or Damaturu. Cost offumigation i s
th same. Indeed these things may cost more as we move inland from
the
ports.
The topic is illustrated here by looking at the movement of
rents and service charge for the past ten years on three residential
blocks of flats, two in Victoria Island and one in Tkoyi as follows:

and Victoria Island it was not so in other parts of Lagos and the country.
For instance, in Enugu, Benin, Ibadan, etc, rents hardly exceeded
N65.00 per square metre per annum even though th e cost of serv ices
was the same, and in some cases, even higher than in the choice areas of

Property

managing the Canute House in Enugu and the Standard Building in Jos,
the li ft maintenance companies had to come in from Lagos at extra cost.
In those areas it was an uphill task to collect servi ce charge of even
N20.00 per square metre per annum.
Today, things are different. Rents have skyrocketed. So have
costs. Rents range from N8,000.00 to N30,000.00 per square metre fo r
office space in Ikoyi and Victoria Island. Lagos Is land is a pathetic case
where rents are as low as N2,000.00 per square metre and landlords
have to offer incentives to intend ing tenants. Despite this there are
many vacant spaces. This is not the p lace for a treatise on th e reasons
for the problems ofCentral Lagos but the menace of miscreants call ed
Area Boys, poor parking facilities, street trading, etc, must be
mentioned.
Property managers should use the ru l e of thumb at their own
risk. It is simply now a useless exercise. In Victoria f sland good offices
wi II let at an average rent of say, N I 0,000.00 per sq uare metre
per a nnum while serv ice charge will be N2,000.00 per square m
etre upward s d epending on the facilities. Tn the same area good
residenti al

Movement of rents N'OOO.OO

1994 1996 1998 2000 2002 2004

Plot 241 Kofo Abayomi Street, V. Island 450

550

Plot 258 Kofo AbayomiStreet, V. Island 400

450

16 Probyn Road, lkoyi

550

600
600
700

675

1,100 1,500

650

800

900

1, 500

1,200 1,800

2,000
Property

Movement of service charge N'OOO.OO

1994 1996 1998 2000 2002 2004

Plot 241 Kofo Abayomi Street, V. Island 40
70
160 190 250
500
Plot 258 Kofo Abayomi Street, V.Island 50
100 140 160 185 228
16 Probyn Road, lkoyi

100

160

170

200

350

400

Tenants' Committees or Associations

In the nineteen seventies Tenants' Comm ittees or Associations were
rare. At that time service charge was l ow, business was boom ing, there
were man y tenants looking for first class office accommodation and th e
landlords were actually selecting from the many tenants chasing their
buildings. Any tenant who was lucky to be chosen found few reasons to

147

Service Charge

Property Management Practice in Nigeria

bicker about any charges and the landlords were able to push bills
which were traditionally landlords' on tenants including structural
repairs and insurance. But the bubble soon burst. Businesses began
experiencing problems and bills were scrutinized more closely.
Tenants soon started comparing notes. This resulted in the formation of
Tenants' Associations whose main aim was to bargain for better and less
expensive services. Once in a wh ile, however, the convener of such
meetings was simply a rabble-rouser who did not want to pay service
charge and seized the opportunity to incite other tenants not to pay. But
this particular incidence was rare.
Managers should see the emergence of Tenants' Associations
as a positive development rather than something to be afraid of, unless
managers have been dishonest or inept. They are there to ensu re that
the manager is doing his job properly with their money. It is in the
interest of the manager that he takes them into confidence especially
where large contracts are being awarded with their money.
Quarterly, monthly, or more frequently as occasions demand,
discussions w ith tenants will help nip problems in the bud. If, say,
service charge accounts are discussed with the Committee the
Committee will be able to reach the members of the Association and
there may be less resistance to payment. As far as service charge
matters are concerned the tenants are part employers of the manager
and his staff. And it is the realization of this that gives rise to the
incidence where, once in a while, tenants insist a certain staff be
removed. The manager may have to comply or, if the staff is that
valuable, transfer him to another property.
The manager must, however, not allow Tenants' Associations
to use the platform to fix rents. On the other hand, there is nothing
wrong in tenants using the Tenants' Association to bargain for and gain
concessions in rents. Such concessions could include being allowed to
pay rents annually and paying lower rents than incoming tenants.
Where there is no Association, the manager may find the need

to call meetings of tenants. For instance, i f he runs out of service char

c before the end of the service charge year he will find it easier to
prepmc and send out a n account up to date and send out a circular
invitinw tenants to a meeting to discuss the payment of supplementary
service: charge. The meeting wi ll give him t he opportuni ty to explain
any item in the account and answer any general questions on his
operations. With each tenant expressing his views openly he w i ll be
saved the trouble ol campaigning for money from office to office. Even
after the meeting h may sti ll need to visit some of the more difficult
tenants.

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