ADMINISTRATION OF SERVICE CHARGE IN 1004 ESTATE, VICTORIA ISLAND, LAGOS

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CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

A type of fee charged to cover services related to the primary product or service being purchased. For example, a concert venue may charge a service fee in addition to the initial price of a ticket in order to cover the cost of security or for allowing electronic purchases. Another example would be a fee for using the Automated Teller Machine of a competing bank. Services fees go by a number of different names depending on the industry, including booking fees properties or facilities management (hotels), security fees (travel), maintenance fees (banking) and customer service fees. These fees are often levied when human interaction between a consumer and the facility or Property Company is involved, with services beyond the physical good itself considered extra.

The property management sector has witnessed considerable growth over the past decade on foot of the housing boom and the growth in multi-unit developments in particular. The term property management can have different meanings for different people and it is clear from this research that the complex relationships between all of the different entities in the sector is a cause of real confusion to consumers and a contributing factor to the malaise whereby the consumer very frequently misunderstands what his/her rights and obligations are. It is important to understand the different stakeholders and their individual roles in the property management sector.

The problem of service charge on property location is faced by both new and existing assets, and its solution is critical to a company’s eventual success. An important element in designing a company’s supply chain is the location of its property. Managing and maintaining properties in Nigeria might be expensive and problematic in nature but nevertheless, it is inevitable if investment in such a properties is not to be lost. Egboluche (2009) commented on the perception in Nigeria and states that the culture of administration and maintenance has gone down to the drain and this has affected virtually the social and economic lives. When facilities are not well managed and maintained it might lead to various defect which can likely constitute nuisance and disturbances to the users of such facilities.

Service charge is primarily to preserve buildings in their initial functional, structural and aesthetic states so that they continue to remain as such and retain their investment value over a long period of existence. According to Musa (2002), it denotes all actions carried-out on a building after completion to preserve it in its initial state, starting from the defects liability period of the building to its disposal. With appropriate maintenance, the building’s economic life  is prolonged. However, a cursory look into some public buildings around like hotels, restaurants, churches, mosques, schools, real Estates  and  other  facilities reveals array of abandoned and epileptically functioning facilities. The malfunctioning of the facilities in most public buildings is a consequence of inadequate maintenance and/or poor management of the facilities. Adejimi (1998) posits that theories and hypotheses are postulated and propounded daily, but maintenance problems still remain adamantly unyielding and so unsolved and this is why there is a serious need to look at the problem from another perspective. He therefore opined that maintenance issues can be resolved together by professionals at the project inception and planning (i.e. project conception, design, construction to completion) stages through preventive rather than corrective or emergency approach against expected or avoidable facility failures (Egboluche, 2009).

1.2     STATEMENT OF THE PROBLEM

The  problems of  service charge on location and maintenance of  buildings in Nigeria is essentially  to retain its values for investment, aesthetic, safety, durability, with a view to ensuring that the property is continually in good condition for habitation and to the satisfaction of the owner(s)/users and communal prestige (Brennan, 2000). However, despite the various strategies been adopted by the state government for maintenance of   buildings, effect of prolong neglect and poor maintenance culture is manifesting in various degrees in the Estate . In order to evolve an effective good maintenance practice regime for the Estate  in particular and public Estate  in general, knowledge of effectiveness of the  strategies adopted in the past is very pertinent, hence, this study.

However, a cursory look into some public buildings around reveals array of abandoned and epileptically functioning facilities. The malfunctioning of the facilities in most public buildings is a consequence of inadequate maintenance and/or poor management of the facilities. Because of the variety of service firms and the relatively low cost of establishing a service facility compared to one for manufacturing, new service facilities are far more common than new factories and warehouses. Indeed, there are few communities, in which rapid population growth has not been paralleled by concurrent rapid growth in retail outlets, restaurants, municipal services, and entertainment facilities. Selecting good sites is crucial to a hotel chain’s success. Of the four major marketing considerations (price, product, promotion, and location), location and product have been shown to be most important for multi-site firms. As a result, hotel chain owners who can pick good sites quickly have a distinct competitive advantage. This research will therefore provide relevant answers to the following research questions:

• Does service charge on facilities impede efficient maintenance of the facilities?
• Is the location of the facilities affecting the efficiency in service charge of the companies relying on it?
• Does the location of companies and businesses affect and influence the location of such supporting facilities?
• What are the challenges affecting the effective use of service charge for maintenance of facilities?

1.3    AIM AND OBJECTIVES OF THE STUDY

The main aim of the study is to ascertain the administration of service charge in 1004 Estate, Victoria Island.

. The objectives for achieving the aim include:

1. Ascertain the extent to which service charge influence maintenance of 1004 Estate
2. To ascertain the various methods by which facilities are located and maintained;
3. To study and proffer solutions to various problems of facilities location and maintenance.

1.4       RELEVANT RESEARCH QUESTIONS

The relevant research questions to be addressed by the research hypotheses include:

1. What are the various 1004 Estate and maintenance problems?
2. Which methods have be used to address facilities maintenance?
3. What measures were introduced by the authority in question to address this problem and effectiveness of the method?
4. What other measure should be introduced to solve the problem of facilities maintenance?

1.5       RELEVANT RESEARCH HYPOTHESES

The relevant research hypotheses to be tested in the study include:

Ho: location of the facilities in 1004 Estate is not significantly related to proper maintenance.

Hi: location of the facilities in 1004 Estate is significantly related to proper maintenance.

1.6       SIGNIFICANCE OF THE STUDY

Well maintained and functional facilities are the driving engines of any urban centres and have always been of great necessity to policy makers and authorities in charge. Their roles can never be over emphasized in the economic, social and political development of any country. The problems confronting the efficient and regular running of any facilities is basically its location and regular maintenance as all of such requires that they be maintained at specified intervals.

Development control measures which aimed at regulating physical development, maintenance and uses with the intention of creating conducive and orderly development of physical structures in beset with series of hindrances especially in an environment with poor control and monitoring measures. The dimensions of these problems, their frequency and devastating consequences, have enmeshed policy makers and professionals, especially town planners in a rather difficult puzzle of how to unravel the chaotic degradation of facilities. Actually, studies need to be conducted to examine and expose the problems facing facilities location and maintenance, prescribe control measures in our study area with the hope to solve possible problems functionally and proactively. This study will further prescribe the introduction of facilities managers and facilities control and monitoring measures into the local government as the do understand the need to keep facilities running and functioning properly. The study is relevant to the urban sector of Nigeria; it will examine the administration of service charge in 1004 Estate, Victoria Island

The study is relevant to the federal government of Nigeria; it will focus on the facility location and maintenance problems in the urban sector putting into regard the study area 1004 Estate.

1.7       SCOPE AND LIMITATIONS OF THE STUDY

The central focus of this study is to determine the administration of service charge in 1004 Estate, Victoria Island in Lagos. The scope of the study is on 1004 ESTATE in V.I. Lagos state. Carrying a study of the entire Nigeria is a herculean task, costly and time consuming. So, the researcher has decided to look at the structures of the 1004 ESTATE as a case study.  The choice of 1004 ESTATE was also influenced by the fact that the researcher being a resident would find it easier to get information from other residents in the area. The major limitation of the study is time. Being an academic study the time frame is not sufficient for a massive study of this nature.

Considering the fact that most urban centre facilities maintenance procedures are meant to be the duty of the government who have little or no formalized mode of operation may inevitably introduce limited bias into the survey, which could limit the application of the result. It is anticipated that the results could at least form the framework for future research of other sample frame. Limiting the research work to an urban centre like 1004 ESTATE   town is a major limitation of this research in that it hampers the application of the research to centres that are not predominantly a residential centre.

1.8       METHODOLOGY

The data, for this study will be collected from the residents of 1004 Estate. This involves breaking 1004 Estate into 7 sections asking the residents of 1004 Estate   some prepared questions in which answers will be provided accordingly. Data will be obtained from both the primary and secondary sources, which includes; interview, structured questionnaire, journal publications, textbooks, newspapers, internet facilities. Secondary data will be used to complement the primary data as the primary data is the original work.

Data captured for this study will be analysed through descriptive and inferential statistical methods. The descriptive analysis involves the use of percentages, tabulation and graphical presentation. While, the inferential statistical method involved the use of the spearman rank order correlation method.

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