Assessing the impact of service charge administration on the efficiency of commercial real estate.

Abstract

Service Charge administration plays a big role in the maintenance, development, and growth of properties in the commercial property market. A service charge is a means by which the landlord or the property manager reclaims from the tenant expenditure incurred on works carried out in order to keep the common parts of the building in operation for the tenant’s use. Service charge administration is therefore a major factor on the building condition and the quality of service provision, in that proper service charge administration should ideally ensure quality service delivery and a good overall condition of the commercial structure, while poor service charge administration would imply poor service delivery and overall condition of the structure. This research aims to bring to light the rationale for the administration of commercial service charges, to identify challenges and solutions to the administration of service charges, and additionally to examine the impact of service charge administration on the service quality and building conditions of commercial properties. The data for this project was collected through a descriptive and case study research design which was administered with closed – ended questions through questionnaires. A case study design was applied so as to allow the researcher to gather in depth information from the research to be carried out. A descriptive research design was used to examine the perception of the respondents in respect to what is happening, the reason it is happening and the effect, with the descriptive survey attempting to document current conditions. These findings indicate that effective administration of service charge greatly impacts the timeliness of service delivery to the service beneficiary which is used as a basis to evaluate the quality of service received. Hence the quality of the services depends on the nature of administration and the time taken in the delivery of the service. A positive relationship between service charge administration and transparency in accounts indicates quality service delivery and good overall condition of commercial structures where service charges are levied.