Professionals have urged stakeholders in the real estate sector to implement transparent agreements and fair and technology-driven solutions for service charge apportionment in multi-tenanted properties.
A former chairman of the Lagos branch of the Nigerian lnstitution of Estate Surveyors and Valuers (NIESV), Dotun Bamigbola, who led the call at the 2025 Mandatory Continuing Professional Development seminar organised by the NIESV Rivers State branch, said by implementing transparent agreements, fair apportionment methods, regular audits, and technology-driven solutions, landlords and property managers can create a more equitable and efficient system.
Speaking on: ‘Service Charge Apportionment in Multi-tenanted Properties: Benefits, Challenges and Solutions’, he revealed that service charge apportionment in multi-tenanted properties is necessary but complex process, stressing that while it ensures fair cost distribution and efficient property management, it also presents challenges such as disputes, fluctuating costs, and legal concerns.
According to him, solutions to improve service charge apportionment should include tenants/occupiers’ engagement and communication, whereby there is regular interaction regarding service charge calculations, updates, and justifications to manage expectations and reduce disputes.
Bamigbola suggested technology-driven management by utilising property management software for automated calculations and real-time reporting to minimise errors and enhance efficiency, as well as legal compliance and dispute resolution mechanisms to ensure compliance with legal frameworks.
“Implementing proactive budgeting and forecasting strategies allows property managers to anticipate costs and minimise sudden charge hikes. There is a need to build an enforcement process into the service charge implementation process to ensure payment compliance. This process should be agreed with the occupiers for effectiveness and backing,” he said.
He tasked property managers and landlords with ensuring enhanced transparency and tenant confidence by adopting clearly defined apportionment methods that promote openness, reduce disputes, and strengthen landlord-tenant relationships.
To him, stakeholders must facilitate structured budgeting and financial planning, ensuring consistent service provision and preventing unexpected financial gaps.
Bamigbola said, “Aligning with lease agreements and relevant legal frameworks helps landlords avoid disputes or litigation and ensures that properties remain well-maintained, benefiting both landlords in terms of property value preservation and tenants concerning better working or living environments.”
However, he highlighted challenges in service charge apportionment to include complexity in allocation, especially variations in tenants/occupiers’ space sizes, usage levels, and lease agreements, which make it challenging to allocate costs fairly.
He noted that some tenants and occupiers might contest the apportionment method, particularly if they perceive charges as disproportionate or unclear. On changing occupancy levels, he explained that vacant units create issues in cost distribution as remaining tenants may face higher charges or landlords may need to cover shortfalls.
In a presentation, NIESV Second Vice President, Dr Emmanuel Mark, offered legal and practical solution insights on how to navigate property management complexities, especially rent review and default, as well as landlord and tenants’ relationships.
Also speaking, Mr Dapo Olaiya of Dapo Olaiya Consulting, an estate surveyor and valuation firm, harped on the need for practitioners to uphold professional integrity as key to enhancing client trust and maintaining the status of real estate professionals.
