1 Adopting Best Practices in Service Charge Administration in Nigeria A Presentation to Estate Management Department, Covenant University By RSV John Zedomi, Principal Partner John Zedomi & Associates October 10,2018 1.0 INTRODUCTION To ensure fairness and equity, there is a need to adopt standards. Best practices are a set of guidelines, ethics or ideas that represent the most efficient or prudent course of action. An authority, such as a regulator, governing body such as the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Royal Institute of Chartered Surveyors (RICS) etc. or internally by management, depending on the circumstances, often sets best practices. While best practices generally dictate the recommended course of action, some situations require that industry best practices be followed. Service charges, however, are frequently cited as one of the most common sources of conflict between landlords, tenants, property managers, residents and facility managers. A good example is the case of 1004 Estates Limited and The Incorporated Trustees of 1004 Home Owners and Residents Association which happened a few years ago. The dispute involving the management of service charge arose and had to be decided by the Lagos High Court. It has therefore become imperative that there is a need to improve general standards and promote best practices, uniformity, fairness and transparency in the management and administration of service charges in property and residential estates. Service charge administration is the means that enable the sharing of costs of common services in properties among multiple occupiers. There will be a manager who administers these services (for which he or she will receive a fee). Best practice requires services to be procured on a value for money basis and that competitive quotations are obtained for the supply of these services. The service charge will be on a ‘not for profit, not for loss’ basis. 1.1 WHAT SERVICE CHARGE IS NOT? ! Service charge is not a profit center. ! Service charge is not part of the landlord’s rent. ! Service charge is not an opportunity for the property owner to shift lease obligations to the tenant. 1.2 WHAT IS SERVICE CHARGE? An additional rent collected by the property owners or the managing agent from tenants or occupiers of a property, more usually in multiple occupations, for providing common services that they and the landlord have agreed should be provided. Such services would, especially in multi-occupied properties, usually be those which the occupiers should be