AN EXAMINATION OF THE EFFECT OF MAINTENANCE COSTS OF HOUSING ON RENTS IN VICTORIA ISLAND, LAGOS

                                         By

              KUYE OLUSEGUN & JENNIFER OKEDI

ABSTRACT

Housing problem in Nigeria is both qualitative and quantitative in nature. The qualitative aspect has to do with maintenance of the existing building, which has a spill-over effect on house rents. It is believed, that the increase in the prices of building materials and rent control discourages many property owners in carrying out proper maintenance of their properties. In this light of this, the paper focused on the effect of maintenance cost on house rents in Victoria Island. The methodology adopted included the review of relevant literature and the use of questionnaire to collect rental information. The result showed that high maintenance cost often result in higher rent being paid in the study in the study area and efforts have to be made by government to address the issue of rent control and also regulate the price of building materials in order to strike a balance between rent paid and maintenance costs.

1.       INTRODUCTION

Housing serves as the basis upon which comfort rests and various activities for human survival emanates. According to Abrams (1964), housing is not just shelter, but part of the fabric of neighborhood life and of the whole social milieu; it touches upon many facets of industrialization, economic activities and development. Housing goes beyond shelter but also includes utilities and infrastructures like road, water supply, sewage, electricity, etc. The Oxford Advanced Dictionary of current English defines a house as a building made for people to live in usually for one family or a family and lodgers (Hornby, 2000).

Technically, a house can be defined as a building or structural edifice comprising walls will foundations, floors, roofs etc in which man lives thereby sheltering himself from the harsh of weather, wild animals and the elements (Ezeagu, 2000). A house is a part of housing and the house becomes housing when we have it in multiple of houses/units provided with basic facilities and services for the physical, mental, social, economic, health, cultural and material well-being of individuals and families (Onibokun, 1990).

Abiola (1990) describes housing as a convection of characteristics to provide a unique home within any neighborhood and a bundle of services and an array of economic, sociological and psychological phenomena. Housing is the combination of shelters or houses on a service area with the provision for productive activity within the vicinity of the housing environment. The provision of the basic services like road, portable water, and electricity are viewed as making housing accommodation habitable and qualitative which makes the life of the occupiers comfortable, peaceful and pleasant. Thus, housing is more than mere shelter as it embraces all the social services and utilities that make life worth living.

The importance of housing spans the facets of human life – it offers physical protection against the environmental hazard, comfort, security and dignity among other things. It therefore means that qualitative housing is very important because it engenders healthy environment and stimulates productivity and progress hence government interventions at various stages in Nigeria to provide houses.

However, in spite of the importance of housing to human existence, few building owners regard maintenance as a matter for serious concern, and yet cannot afford to allow buildings, old or new, to decay through neglect. As it is clearly impractical and even undesirable to replace building, whether as owners, designers, constructors, or users should take a serious interest in building maintenance. A casual observation will immediately shows many houses in most of our urban areas lacked adequate maintenance. Consequently, building obsolescence becomes inevitable but this can be controlled by proper maintenance practices directed towards delaying the deteriorating process for as long as possible. Without doubt, good maintenance practices will influence to a very large extent house rent being paid by tenants and where any landlord default in executing maintenance works, tenants may be delinquent in their payment of rent citing the reason of lack of maintenance.

The aim of this paper is to analyze the effect of maintenance costs on house rent in Victoria Island. The study examined the general effect of maintenance cost on house rent; the factors that affect house rent identify the challenges of maintenance costs of houses and recommendations made with regards to ways to minimse challenges. The study hypothesized either that there is no relative significant effect of the provision of maintenance cost on house rents in Victoria Island (H₀) or there is a relative significant effect in the provision of maintenance cost on house rents in Victoria Island (H₁).

For the purpose of this research, the study limits itself to the effect of maintenance costs on rents of residential buildings in Lagos Island of Lagos State. No attempt was made to study the legal issues in respect of landlord-tenant relationship, security of tenure, payment of rents and other tenancy issues.

2.      HOUSING MAINTENANCE OVERVIEW

Maintenance as a concept refers to all works relating to repairs, replacement and or redecoration performed on any building with the aim of increasing the useful economic life; enhance its value as well as promoting its beauty and functionality and preventing damage and injury (Agbola, 1987). As stated in British Standards (BS 3811, 1974), “maintenance” is work undertaken in order to keep or restore every facility, i.e. every part of a site building and concept, to an acceptable standard. The two keywords in the BS 3811 definition of maintenance are to keep or restore. “Keeping” which refers to the work carried out in anticipation of the future is regarded as preventive maintenance while “restoring” which is the work carried out after failure constitutes corrective maintenance. Sometimes, maintenance work may result from unforeseen breakdowns or damage due to external causes. Such maintenance work is referred to as unplanned maintenance. Planned maintenance is described as the maintenance work organized and carried out with forethought, control and the use of records to a predetermined plan. The Committee on Building Maintenance (1970) defines “acceptable standard” as one which sustains the utility and value of the facility “as one which sustains the utility and value of the facility” and this includes some degree of improvement over the life of a building as acceptable comfort and amenity standards rise.

Thus, maintenance could be seen as every effort made to keep physical facilities – structures, equipment, machinery and services, at a satisfactory level of technical performance and quality of the lowest total cost. Odudu (1994) sees maintenance with respect to building and their services as a continuum of the construction process and that the level of maintenance governs the health of a building throughout its lifecycle. These definitions indicate that maintenance involves the whole gamut of activities involved in keeping a building and all its auxiliary facilities and services in a state to continue to fulfill its functions effectively and in safety. It involves the planning and coordination of activities geared towards keeping and or restoring building and its auxiliary facilities and services to peak performance.

Since it is not possible to have a maintenance free building, then, maintenance activity is the logical follow-up to ensure continuous efficient functioning of a building and all is auxiliary facilities and services. All the components of a house – the building structure, the internal and external facilities, services and equipment, as any other physical facility – deteriorate with age and at various rates. The rate of deterioration will depend on the materials used, the exposure of environmental conditions, construction methods and the use. From various studies, the first twenty years of the building or housing is accompanied by some defects which are easily corrected. However, where these initial defects are neglected, the next stage of deterioration will manifest. This often leads to obsolescence and abandonment (Olateju, 1994). If at any stage in the building life cycle, the owner decides to intervene by correcting, restoring or improving the facility, the process employed is called maintenance. Therefore, the major aim of maintenance is to preserve a building and its auxiliary facilities and services (housing) in its original state or upgrade it to the currently acceptable standard. It is the aim of maintenance to secure economy in money, material and time, as well as to achieve efficient functioning of the building and its auxiliary facilities so as to secure user satisfaction (Odudu, 1994). The objectives of building maintenance are therefore (Al-Khatam, 2003; Oyefeko, 1990):

• preserve building structure in its initial state as far as practicable so that it serves effectively the purpose for which it was built
• maintain an acceptable quality standard in terms of the structural stability to meet the current state and demand.
• maintain the value of the physical assets of the building stock.
• ensure that buildings and their associated services are in a safe condition.
• upgrade the quality and standard of a building (and its facilities and services) by renewal and refurbishments, especially where existing facilities have deteriorated beyond normal repairs.
• attract higher rental value where such a building is to be placed on commercial use.
• ensure that the buildings are fit for use.
• ensure that the condition of the building meets all statutory requirements.

Maintenance can be done in different stages. Each stage will have different characteristics. (Al-Khatam, 2003; Liska, 1988) defined those stages as follows:

• Planning and design stage: The planning and designing of the facility should be based on the identified function and be as maintenance free as possible. In this stage a lot of money can be saved with the proper plan and design. For this reason, the building manager and maintenance personnel should be consulted during the early stages of the building
• Construction stage: In order to achieve minimum level of maintenance during the building life, work performed during the construction phase must be done with the highest quality in term of workmanship. As a result, expert contractor should be selected to perform the project.

• Maintenance stage: In this stage, maintenance is performed after the building has been constructed and occupied.

It therefore follows that buildings and their components must be kept to an acceptable standard and even where there are no statutory requirements for maintenance. Maintenance is usually carried out to keep, restore, or retain a facility at an acceptable standard. Agbola & Olatubara (2003) opined that a well maintained property commands acceptable quality standard in terms of structural stability to meet the current taste and demands. It retains its aesthetic value. It attracts higher rental value whenever it is placed on commercial use and reasonable capital value on disposal. Conversely, an ill-maintained building stands the risk of quick deterioration. Shortly, its structural and decorative repairs get into ruins adversely affecting its life span. A landlord therefore, who repairs a damaged part of his building, replaces weathered or worn-out elements, renovates redecorates and employs a gardener to clean the surroundings of the house at regular interval, is deemed to be giving proper maintenance to the building to sustain its utility and value. Most landlords often spread the amount spent on maintenance over the basic rent, thus the tenant is expected to pay higher than his counterpart, occupying a similar building not being maintained. Building and maintenance services, both in nature and application, are dynamic as rent (Abiola, 1990).

Regular attention to property is essential if its value as an asset is to be maintained. It involves work necessary to combat progressive deterioration and it could take the following forms (Al-Khatam, 2003):

• Patching, involving the more or less regular replacement of small part or areas
• Replacement of whole elements of components because they are functionally unsatisfactory, for example door lock, flaked floor tiles, worn out valves in water closet etc.
• Preservation of protective coatings
• Cleaning.
• Repairs involving works directed at keeping the structure, fixture or installation fit to perform its proper Such repair works as having regard to the age, character and locality of the dwelling and which would make it fit for the occupation of a hypothetical tenant of the class that would be likely to occupy it, is termed “good tenantable repair”.
• Alterations and improvements to buildings including modernization which are the work done to change and improve both internal and external parts of the building to currently acceptable Over the years, building owners have tended to regard maintenance costs as part of the debit side of the balance sheet and an erosion of legitimate profits because they failed to appreciate its true value(s).

Classification of maintenance cost: General

Lee (1987) indicated that maintenance cost should be classified in alternative ways to indicate the nature of the work done, the reason for carrying out the work, the frequency at which the work becomes necessary, the method of execution and any other appropriate locational reference. Therefore, the main classes of cost are as follows (Al-Khatam, 2003):

• Location: The appropriate locational reference to distribute the total maintenance cost into departments is the Also, it is the proper way to collect information about sizes, finishes, windows, etc. during the design stage and eventually incorporated in the maintenance manuals. However, the use of floor area as a basis of cost allocation in not meaningful because the comparison with the maintenance costs of similar buildings cannot be performed without recording the physical parameters (age, form of construction, materials specification, etc).

• Building elements: These are the major component common to most buildings, which usually fulfills the same functions irrespective of its construction or specification (Lee, 1987). Building elemental analysis can be used to:
  • determine the high maintenance cost area in order to assist the decision-maker as to whether renew the component or continue to repair it.
  • determine the level of expenditures on maintaining of each part of
  • control and predict future expenditure.
  • compare the cost of maintaining of similar location and element both without the

To these ends, the element chosen should meet the following requirements (Al-Khatam, 2003):

• represent major cost area.
• provide an accurate identification so that the costs can be accurately allocated.
• be related to measurable parameters of the building so that costs can be adjusted for quality, quantity, environment and maintenance policy (Lee, 1987).

• Functional system: Maintenance cost can be related to functional system. This will make the purpose of the work more feasible to assess the effect on user activities of different levels of maintenance A possible classification on these lines would (Lee, 1987).
  • Safety: this includes structural stability, fire precautions, and hazards of all
  • Weather: this would include the external envelope (i.e. roof covering, wall cladding, ).
  • Environmental: this would be divided to visual, thermal and acoustic sub
  • Spatial: the internal subdivision of the building and the provision for movement between spaces both horizontally and vertically. It provides useful information on the value of flexible design methods and of provisions such as movable
  • Hygiene: all washing and lavatory facilities are
  • Communication: it includes all the audio and visual means of transmitting information inside the building.
• Purpose: The purposes of maintenance work should be known because it will assist in better interpretation of cost data. Some of the purposes are (Lee, 1987).
  • Repair: to maintain the building to the required
  • Renewals: the decision to renew a component before the end of its life cycle instate of continue in repairing is influenced by the economic circumstances or aesthetic
  • Modification: it allows a more effective use of the
  • Protection: it would cover all items that necessary to protect the base materials (i.e. external painting and thin coating).
  • Decoration: to enhance the appearance of the internal surfaces of the building (i.e. painting, decorative treatment etc)

• Cleaning: the main purpose of cleaning is to maintain the internal appearance of the

• Causes: The causes of failure are many and varied. It can fall into one of the following categories (Lee, 1987):
  • Normal wear and
  • Abnormal wear and tear and may be due to design fault, exceptional weather condition, improper use, inappropriate maintenance or delay in carrying out maintenance at the proper time.

Factors affecting building maintenance cost

Building maintenance cost increase and decrease according to the designers and construction contractor’s education, experience and the level of compliance with the specifications and standard. According to Al-Khatam (2003), the identifiable factors affecting building maintenance cost are:

• Design complexity: Building design should be made such that maintenance cost will be Design complexity will prevent maintenance work to be carried out easily, quickly and economically. Major replacement can often be avoided if regular cleaning and minor repair can be carried out without difficulty. For example, maintenance requires some tools to be performed. If the designer does not allow enough clearance to get the tools in and out, this minor problem will get bigger and become major problem. In addition, designer should always avoid permanent fixing of elements, which need continuous maintenance,

e.g. such as lamp, carpets (Mills, 1980).

• Lack of concern to future maintenance: Maintainability is the effort that provides end- users with products that can be maintained by satisfactory balance of a short time, low cost and minimum expenditure of support resources, without adversely affecting the product’s performance or safety characteristics. Maintainability is one important aspect of design, along with Reliability, Human Engineering, Components Engineering and It must be involved in the total design process. In the planning stage, maintainability requirements are defined and translated into design criteria.  Next, these criteria are applied to the design to establish the desired functional and physical characteristics of the system. These design characteristics are measured to verify quantitative goals and then translated into improvement of design of the system. By not considering maintenance analysis during design stage of building, grievous problems can be caused regarding function, performance, and safety of the system. This can cause a total replacement of the system or an item might necessitate (Patton, 1988).
• Life cycle cost techniques (LCC): This is the total relevant costs over the life of a building including cost of acquisition, operation, maintenance, modification, and disposal for the purpose of making decision (Shear, 1993). LCC takes into account initial and other running costs (total cost of operation and maintenance of a system) over a life of the It can help in determining how the owner’s money is distributed during the life period of the facility. It is used to determine the most economic way of meeting a need of space. Also, it is used to assist in developing the most economic plan shape, structural form and internal layout. The earlier LCC is applied, the greater the possibility of saving and lowering the committed cost. LCC is used to identify the design feature, components and finishing that have lowest total cost. Also, it provides a means of identifying high cost areas and evaluating changes that will reduce these costs (Lee, 1987).
• Poor quality control: Quality Control (QC) is the process used to control, inspect, test and record procurement, fabrication and installation in conformance with contract During the construction and maintenance stages, quality control program should be set out. This will be used to control, inspect and test record of activities in accordance with the contract requirement and construction procedures. A facility with the presence of an effective QC program has fewer defects and therefore requires less maintenance than a facility where no QC program has been considered. Also, during the maintenance stage the presence of QC is vital to assure that the components are required or maintained as per the contract documents (Mohamoud, 1994).
• Unfamiliarity with maintenance methods: The effect of adoption of inappropriate method is not limited to increase the cost of the particular work, but may also have an adverse effect on the long-term durability of the building and the cost of subsequent maintenance (Al-Khudair, 1988).
• Unfamiliarity with site conditions: Building designers should be familiar with buildings site condition such as soil condition. Ignoring variation in soil condition will cause setting, which will cause cracking of structural elements (Al-Khudair, 1988).
• Failure to identify the true cause of defect: This will not only do nothing to rectify the original defect but may substantially worsen the condition of the building. Therefore, Building Surveyors should examine carefully all symptoms, consider all the probable causes, by a process of elimination identify the true causes and its source, and then decide on appropriate remedial action (Lee, 1987).
• Unavailability of skilled labours: Skilled labours are important for maintenance work and they should be available to perform job and utilize equipment. It is because they perform work according to their past experience and their skills. Employing labour with the requisite skills will assist to improve the quality of work, minimizing cost and reduce work time span. Therefore, just having the right tools does not mean the job will be performed
• Defects and faulty workmanship in the initial construction: Some building defects have their origin in the building process itself. Due to inaccuracies during construction, the fixing and bearings cannot tolerate the differential movements leading to structural defects (Mills, 1980).
• Poor building materials: Building materials selection should meet the performance requirements expected. Using bad quality of materials will cause failure of the materials, which will require replacement, correction or more maintenance works in the Selection of inferior materials during the construction stage will cause more problems during the maintenance stage (Merritt, 1975). Therefore, selection of materials should be in compliance with the performance specification requirements in order to minimize future expenses during maintenance stage. Other key considerations with regard to building material are ignorance of the contractor about the basic physical and chemical properties of materials and the usage of new materials with little behavior’s information (Mahmoud, 1994).
• Fluctuation of prices of building materials: Recently, there have been obvious fluctuations in construction and finishing Example of this materials price fluctuation is cement.

 

• Harsh environmental conditions: Weather condition is often responsible for chemical action on building materials. Atmospheric pollution associated with rain, causes rapid deterioration of some materials (Patton, 1982).
• Lack of local building standard and specification: The specification and standards are document that clearly and accurately describe the essential technical requirement for materials, which it will be determined that the performance requirements have been met. Such documents may include performance, support, preservation, packing, and making requirements (Patton, 1988). Standard and specification documents are extremely important to building maintenance, as it constitutes a schedule of instructions to the contractor and prescribes the materials and workmanship Projects and facilities are to be constructed as per standard and specifications. Having a uniform specification and standards will ease the construction process as well as maintenance work (Seeley, 1987). It is very important to have on uniform standard and specification to be followed throughout to avoid confusion and loss of skills in trying to understand the procedures called standard.
• Age of the building: Building components have expected life, at the end of which, demolition or replacement would be imperative.
• Lack of building maintenance manuals: The objective of the manual is to provide all building users with a common system of maintenance information recording and retrieval for the proper guidance of maintenance operatives, building owners, maintenance involving operatives, costing, and general maintenance. This would act as a common part of the building process and not as a series of isolated events that takes place after the completion of the building (Mills, 1980).
• Lack of communications between maintenance contractors and clients: The proper communication channel between the maintenance contracts and clients ensures that the contractors are going to perform the work according to the stated condition and specification in the contract documents. Also, it ensures that the maintenance contractors will respond to client’s repairs and maintenance in a reasonable period of time.
• Not using building after completion: The non-use of building after completion would make the owner not give enough attention to the maintenance work. Facilities which have not been used for a long time could be needed urgently. However, if no maintenance has been performed on idle components and items, they may require emergency maintenance which will cost more and require more manpower. Hence, if facilities are not in use, they should be maintained in order to avoid future unplanned costly maintenance (Mahmoud, 1994).

Budget and finance

• Poor financial support for maintenance work: It is very important that building owners, when they prepare the annual budgets, to include enough financial allocation for maintenance work, as it is a critical and needed function. In the absence of financial support for maintenance work required, the building will not be maintained properly.
• Poor financial control on site: Labour productivity, material availability, materials waste, good and effective maintenance methods, using effective tools and equipment, and good maintenance planning should be financially controlled on Maintenance management should be aware of these factors in order to achieve better financial control on site.

Building users behaviours:

• User does not understand importance of maintenance work: Building users often pay little attention to keeping their building in good working order and are surprised when they fail to give the service they It has already emphasized that buildings start to deteriorate from the day they are completed. The length of time this process of decay takes depends on the care taken in: firstly, the design, secondly the construction, and thirdly the upkeep or maintenance.
• Misuse of building and wrong behaviours of occupants: When building construction is completed, owners must be using their buildings and its components in proper way. The misuse of components will result in their damage and need for repair, which would be costly (Mahmoud, 1994). Furthermore, building occupants often pay little attention to keeping building in good working order and are surprised when they fail to give the service they expected. The misuse of building services will result in their damage and the need for repair, which will be costly. Also, the abnormal occupier activities can cause the rapid
• Not using preventive maintenance: Neglect of preventive maintenance such as checking the efficacy of rainwater gutters and servicing mechanical and electrical installation causes more extensive periodical maintenance and, in the long run, major repair or restoration which could have been avoided or Gradual deterioration is inevitable, but the speed at which it proceeds can be regulated and the ultimate failure of the building, in whole or in part, can be avoided or accelerated according to the way in which the building is maintained. Therefore, leaving a minor problem, which requires maintenance action until it becomes worse, is wrong practice of maintenance. It causes maintenance cost to accumulate or grow until the owner cannot tolerate it (Al-Khatam, 2003).

3.        SPECIFIC MAINTENANCE COSTS INCURRED IN HOUSING

Housing, otherwise referred to as residential buildings, of any type and size, is a valuable assets, which when preserved, increases in value over time. Its preservation requires that maintenance be regularly carried out. Some of the common types of costs incurred in maintenance and operating of residential properties as outlined by (Patton, 1988; Olusegun, 2011) are:

• Cleaning expenses: Cleaning involves the cost of cleaning the building. This service is either provided by the building owner’s personnel or outsourced to third-party cleaning If it is performed by the owner’s personnel, this cost would be part of payroll expenses. Cleaning cost is a period cost and should be expensed during the applicable periods.
• Security expenses: Security expenses are payments to security companies for securing the The services provided by these personnel could include registering guests entering the building, confirming guest visits with the hosting tenant, issuing security passes (IDS) to tenants, surveillance of the exterior and hallways of the building and a host of other responsibilities. The fees paid for these services are expensed during the applicable periods similar to the cleaning service expenses.
• Water and electricity expenses: Water, electricity represents major expense lines in an operating residential building income statement. The charges for these items are billed by the utility provider to the building. In some cases, where there are sub-metering arrangements, these charges can be billed directly to Sub-metering prevents the allocation of these costs by the landlord using tenants’ pro rata shares of the building. Instead, meters are installed for every tenant in the building.
• Payroll expenses: Payroll includes the compensation cost of all the personnel who perform work for the building. It also includes all employees’ employment benefits. Some personnel commonly found at the building include the Property Managers. Engineers, Administrative Assistants and Accountants. All compensation to these individuals is recorded as payroll expense.
• Insurance expenses: These include insurance valuations and premiums paid yearly for cover against unforeseen circumstances that may likely result in damages to the building and loss of rental income until the building is fully restored back to economic use.
• Leasing costs: Leasing costs are the costs incurred to lease the premises to tenants. The most common leasing costs are estate agent’s commissions and legal fees. Agency commissions are paid to estate agent’s for securing a tenant who leases the premises:
  • In a residential building, the commission is typically paid at lease signing and the payment obligation varies between the landlord and the tenant.
  • In commercial properties, the broker’s commission payments are typically spread over the length of the lease and are specified in the commission agreement between the leasing broker and the landlord.

The most common commission agreement entitles the broker to a portion of the commission upon a tenant’s signing of the lease. Sometimes the landlord and estate agent may agree that the agent is entitled to an additional commission if the tenant renews at the end of the original lease.

• Management fee: In some cases, the owner of a real estate entity hires a professional real estate management firm to manage the building. These firms provide the staffing, interface with the tenants, lease vacant space; procure supplies and collect rents among other responsibilities. The cost of hiring professional estate management firm by the owner of the residential building serves as an expense that is incurred in managing a residential
• Property taxes: Generally, property taxes are billed by the local council or municipality where the subject property is located. Property tax is a major source of revenue to local governments and major expense line on a property’s income statement. The amount of taxes paid on a property is assessed by the government taxing agency. The importance of this cost is very evident upon review of a property’s financial statement. It is usually one of the largest costs of maintaining a property.

4.      RESEARCH METHODOLOGY The Study Area: Victoria Island

Victoria Island is a piece of land surrounded by water within the Lagos area of the Federal Republic of Nigeria. It is situated on the Western Coast of Africa at Longitude 6⁰ 36’ North and Latitude 4⁰ 45’ East. It is located immediately east of the Eastern Moles on the down drift side of the natural inlet to the Lagos harbour. To the North, Victoria Island is bounded by the five Cowrie-Creek, South by the Atlantic Ocean, and West by Lagos harbour which extends infinitely to join the Maroko beach of the East. It was discovered by the Portuguese between 1417 and 1475.

Victoria Island was first inhabited in about the 1^st Century A.D. by the local natives and people from neighbouring settlements as a result of its fishing potentials. The first sign of foreign presence was about the 18^th century when some Portuguese traders settled in Victoria Island as a result of its being safe from external attacks because of its natural (water) boundaries. At this point, the Island was an important centre for the exchange of products from the hinter lands (the mainland) which later expanded into a convenient spot for exchange of goods and services between natives and European traders.

Victoria Island is made up of the following major streets – Ozumba Nbadiwe Road, Ahmadu Bello Street, Adetojunbo Street, Kofo Abayomi Street and Adeola Odeku Street. Victoria Island is accessible through the Onikan/Ahmadu Bello Road link bridge, the Kingsway Road Link bride and Epe Road. Victoria Island enjoys series of access roads and major public facilities such as water supply, power supply and telecommunication; the area also enjoys good market network which relates to the Lagos Island Central business district – one of the biggest in Nigeria. Developments in Victoria Island are continuous and quite extensive; nevertheless, they can be categorized into Residential, Commercial and Recreational uses. However, residential land use covers about two-thirds of the total land area. The nature of development ranges from detached houses to duplexes, to blocks of luxury flats and majority of which were constructed by private individuals. Un-development residential plots still exists in the area and is left so either for speculative purposes or the owners has not secured finance to undertake the development. Few among the governments owned residential estates includes, the 1004 Residential Luxury Flats, the Bar Beach Towers etc. There are adequate facilities that serve most of the separate accommodations, which could be in terms of private or public utilities.

Furthermore, Victoria Island accommodates quite a number of public establishments and government institutions among which are: the Nigerian Television Authority (Headquarters); Ministry of Education; the Nigerian Security Printing and Minting Corporation; the Nigerian National Petroleum Corporation (Headquarters); state government liaison offices, government guest houses, several embassies; several banking institutions, several oil companies; several blocks of residential luxury flats; the Lagos Garrison Command – Bonny Camp; etc. Hence, Victoria Island is one of the ‘heart beat’ areas of Lagos State.

Research Design

The descriptive research design was employed in this study. A descriptive research design is one that adequately provides a systematic description of a situation or event. The researcher employs the use of questionnaire and data were collected for the purpose of knowing the effect of maintenance costs on house rents in Lagos Island.

Field data was collected though the administration of questionnaire, oral interview and personal observation. The questionnaire was administered randomly on tenants and landlords in the study area. The questionnaire basically requires information on maintenance costs and rentals in Victoria Island. The secondary source of information were obtained from published and unpublished works include substantial information from review of several literature obtained from textbooks, journal articles, other publications. The data collected in the course of this study was collated and descriptive statistics was employed its analysis using tables and percentages.

Research constraints are mainly the uncooperative attitude of respondents during questionnaire distribution and interview and paucity of funds hence the small sample size of the study population. Most of the intended respondents are evasive and thus refused questionnaire.

Data Presentation, Analysis and Interpretation

Table I: Questionnaire distribution

Questionnaire	Frequency	Percentage (%)
Numbers returned	50	77
Numbers not returned	15	23
TOTAL	65	100

The total number of questionnaire administered was 65. From this number, 50 respondents’ questionnaire was retrieved which represents 50% of the total number of questionnaire distributed as shown by the frequency table below. The 50 responses represent the total number of valid questionnaire used for the respective analysis.

Table II: Status of the respondents within the neighborhood

Status	Frequency	Percentage %
Landlords	11	22
Tenants	37	74
No response	2	4
Total	50	100

Source: Field Survey, 20

The status of respondents within their neighborhood varies as stated in the table above. Out of the total respondents, table I indicates that 22% were landlords, 74% were tenants and 4% did not indicate their status. This means that most of the respondents are tenants.

Analysis based on research objectives

Table III:     Type of residential property/accommodation

Type of Accommodation	Frequency	Percentage %
Block of flats	6	12
Bungalows	6	12
Duplexes	11	22
Other categories of detached houses	27	54
Total	50	100

Source: Field Survey, 2011

Table III shows the type of residential property/accommodation of respondents. 12% were block of flats, 22% were occupying duplexes, 54% were occupying various categories of detached houses other than bungalows. From this study, respondents who live in flats had the highest percentage.

Table IV: Age of the buildings of the respondents

Age of the building	Frequency	Percentage%
1-30years	28	56
31-60years	15	30
61-90years	7	14
91years & above	–	–
Total	50	100

Source: Field Survey, 2011

Table IV shows the age of the building. 56% had the highest percentage between 1-30 years, 30% for 31-60 years, and 14% between 61- 90 years, while there was no indication for 91 years above Houses whose, age ranges from 1-30 years showed a higher percentage in the study areas.

Table V:    Rental income of properties

Rent paid per annum (N)	Frequency	Percentage %
Below 100,000	–	–
100,000-300,000	–	–
400,000-600,000	5	10
600,000-800,000	7	14
800,000-1million	20	40
1million -above	18	36
Total	50	100

Source: Field Survey, 2011

Table V showed the rent paid per annum by the respondents. 10% paid between N400,000 – N600,000 per annum, 14% paid between N600,000- N800,000 per annum, while 40% paid between N800,000 – N1million per annum, 36% paid between N1million and above. The implication of these analysis is that properties that have an annual rent between N800,000- 1million has the highest frequency.

Table VI:     Amount spent on maintenance annually

Maintenance Costs	Frequency	Percentage %
Below 50,000	–	–
50,000-200,000	6	12
200,000-400,000	10	20
400,000-700,000	23	46
700,000-1million	11	22
Total	50	100

Source: Field Survey, 2011

Out of the total respondents, table VI indicates that 12% spent between N50,000- N200,000 per annum, 20% spent between N200,000- N400,000 while 46% spent between N400,000- N700,000 and 22% spend N700,000-1million on maintenance cost.

Table VII: Relationship between tenants and landlords (of respondents)

Relationship	Frequency	Percentage %
Very cordial	7	14
Cordial	13	26
Not Cordial	30	60
Total	50	100

Source: Field Survey, 2011

Table VII showed the cordiality of the relationship between landlord and tenants and the implication here is that 26% of the tenants have cordial relationship with their landlord, while 30% said they do not have cordial relationship with their landlord and 14% have very cordial relationship with their landlord.

Table VIII: Causes of problems between landlord and tenants

Causes	Frequency	Percentage %
Increase in rent	24	48
Increase in cost of maintenance	8	16
Payment of municipal utilities	6	12
Maintenance responsibilities	12	24
Total	50	100

Source: Field Survey, 2011

Table VIII showed that the respondents that indicated that increase in house rent is a problem between landlord and tenants were 48%, while 24% indicated that increase in the cost of maintenance could cause problem between landlord and tenants. Other causes include maintenance responsibilities 16% and payment for municipal utilities indicated 12%. This means that increase in house rent is the most common problem between landlord and tenants.

Table IX:     Responsibility for maintenance execution

Maintenance Execution	Frequency	Percentage %
Tenant	13	26
Landlord	27	54
Landlord/tenant	10	20
Total	50	100

Source: Field Survey, 2011

Table IX above shows that 20% of the respondents were jointly responsible for maintenance – landlord (external part of the building) and tenant (internal part of the building) while landlords alone (by reason of owner occupation) have 54% and tenants alone (by reason of being the sole tenant) were 26%. This indicates that most of the available residential buildings surveyed were owner occupied.

Table X:   Services available in the building

Available services	Available%	Not Available%	Total %
Pipe borne water	72	28	100
Electricity	88	22	100
Water closet	76	24	100
Shower tray	76	24	100
Lift	6	94	100
Telephone (inter- com)	82	18	100
Others	68	32	100

Source: Field Survey, 2011

From the total responses received from the respondents, table X shows that 72% agreed that pipe borne water is available while 28% indicated that pipe borne water is not available, 88% of the respondents agrees that electricity is available and 22% indicated that electricity is not available. 76% of the respondents agreed that water closet and shower tray are available and 24% indicated that water closet and shower tray are not available. 6% of the respondents agree that lifts were available while 94% indicated that lifts were not available. 82% of the respondents agree that telephones (intercom) are available while 16% indicated that telephones are not available. 68% of the respondents indicated that there are other services available while 32% indicated that there are no other services available. The implication of availability of services in the building investigated is that the availability of services leads to more maintenance costs and the non-availability reduces maintenance costs.

Table XI:    The provision of additional facilities attracts extra rent

Additional Services	Frequency	Percentage%
Yes	33	66
No	17	34
Total	50	100

Source: Field Survey, 2011

Table XI indicates that 66% of the respondents indicated that the provision of additional facilities often leads to the demand of extra rent by the landlords, while 44% indicated gave a ‘no’ answer. This means that the provision of additional facilities would attract extra rent.

Table XII: The effect of maintenance cost on the increase of house rent

Effect of maintenance on house rent	Frequency	Percentage
Strongly Agreed	29	58
Agreed	16	32
Not decided	–	–
Disagree	2	4
Strongly disagree	–	–
No response	3	6
Total	50	100

Source: Field Survey, 2011

Table XII shows that 58% of the respondents strongly agree that maintenance cost has an effect on the increase of house rent in Victoria Island, 32% of the respondents agree while 4% disagree. It was further suggested that the cost of maintenance will lead to significant increase in the rent of an accommodation.

Hypothesis testing using chi-square statistical tool

The chi-square is carried out based on the response received for the question “Do you agree that maintenance cost has an effect on house rents?

Strongly Agree      (29)

Agree                      (16)

Uncertain                 (-)

Disagree                   (4)

Strongly Disagree   (1)

As seen from the result above, 29 respondents representing 58% of the total respondents strongly agree with the accession while 16 respondents agree with the accession. The chi- square analysis seeks to investigate the validity of the hypothesis under consideration. It is calculated using the formula

x² = (O_i-E_i)²

E_i

Where O_i = Observed frequency        E_i = Expected frequency

The expected frequency is calculated by dividing the total observed frequency by the number of variables (n)

H₁: There is an effect of maintenance costs on house rents in Victoria Island A Likert scale was used to simplify the analysis

Response Key: Strongly agreed = 5; Agree = 4; Uncertain = 3; Disagree = 2; Strongly Disagree = 1

From the response above, the table below was developed

Variables	Oi	Ei	Oi –Ei	(Oi -Ei)2	(Oi –Ei)2/Ei
5	29	10	19	361	36.1
4	16	10	6	36	3.6
3	–	10	-100	-100	-10
2	2	10	-64	-64	-6.4
1	3	10	-49	-49	-4.9

x²= 18.4

Degree of freedom =  r-1

= 5-1

= 4

Level of significance = 0.05; hence Table value of x² = 9.46

Since the calculated value of x² (18.4) is greater than the table of x² (9.46), the null hypothesis (H₀) is rejected and accept the alternate hypothesis (H₁). Therefore, there is a significant effect in the provision of maintenance cost on house rents in Victoria Island.

Summary of Findings

This study made effort to investigate the effect of maintenance costs on house rents in Victoria Island. The various factors that influence house rents and the importance of maintenance in residential properties and rental increment were identified through administration of questionnaires and the subsequent analysis. In summary, the general consensus is that a well maintained property will attract higher rent and will make the value of such property sustainable and the stakeholders (i.e. owners and tenants alike) will continue to enjoy the benefits that come along with the continued existence of the property. In the course of carrying out the research, the following observations were made:

1. 54% of the respondents occupy flats while 22% of the total respondents live in detached houses. The type of residential building should be made in such a way that maintenance is carried out without too much stress.
2. Furthermore, 56% of the respondents occupied buildings whose age ranges between 1-30years, 30% of the respondents occupied buildings with ages ranging from 31-60 Maintenance elongates the life span of the property but not so critical in the determination of its value.
3. In terms of amounts spent on maintenance annually, 12% spent between N50,000; 20% spent between N200,000 and N400,000 per annum; while 22% spent about N700,000 and above. This is an indication that most of the respondents attaches high premium to the maintenance of their respective buildings. This practice will surely reduce building obsolescence and even sudden collapse of buidings.
4. The last observation above has a bearing with the rental income of the properties Out of the total respondents 10% paid between N400,000 –N600,000 per annum, 14% paid between N600,000- N800,000 per annum, while 40% paid between N800,000 – N1million per annum, 36% paid between N1million and above. Part of the rent paid by these respondents, is usually spent on maintenance in order to increase the lifespan of the building and often times, help to maximize returns to the property owner.
5. The respondents are of the opinion that problems do occur between them and their landlords/ Out of the sample, 64% attested positively to this while 26% indicated there is no problem. This was further corroborated in terms of responses to the relationship been described as very cordial by 14%, not cordial by 60%.
6. From the study, 48% of the respondents believe that increase in house rent is a problem, 24% indicated that maintenance responsibility is a major problem.
7. Majority of the respondents (58%) subscribed to the fact that maintenance cost leads to increase in the rental accommodation which attest to the fact that the more input in terms of money expended, the more the rent the investor will be expecting.

5.         CONCLUSION AND RECOMMENDATIONS

This study considered the effect of maintenance costs on house rents in Victoria Island. The various sources of data collection techniques were employed, i.e. secondary source which includes a review of relevant literatures such as textbooks and journals and the primary source of data collection which includes administration of research questionnaires to the relevant respondents. In the light of the data collected and analysis made and the subsequent hypothesis testing, the result shows that, higher maintenance costs would invariably result in higher rent being paid on such houses.

Based on the research findings and to further cheapen the cost of maintaining the available residential buildings of every type, the following recommendations will suffice:

• Local production of quality building materials should be encouraged by government. For the importers of these materials, a reasonable custom rebate could be given in a bid to make available the vital building materials at affordable prices. This will encourage prompt maintenance and thereby reduce the incidence of building collapsed currently prevalent in Victoria Island.
• To enable both the government and public stem down the rental cost of accommodation among others, government should establish a comprehensive planning program to stimulate active private sector participation in the housing delivery system by:
  • Laying out schemes with basic infrastructures provided before allocation (site and services).
  • Granting accessibility to land at affordable prices to developers with tax relief for some years, say, 5years of post construction, as incentives and interest rate on loan for housing construction should be made reasonable and adequate moratorium

This recommendation will ensure that more money will be available for the procurement of quality materials for construction and thus reduce future maintenance cost.

• A regional spread of building material industries could be established and thus widen the availability of the needed building materials though without sacrificing economic gains of nearness to sources of raw materials. This will reduce cost of maintenance as travelling cost will be eliminated, encourages industrial development of the construction industry, provide employment to the country’s teeming youth and also enhance economic prosperity of the country at large.
• Education and research through public enlightenment, research into local building materials and its massive production and effective utilization after due approvals and training of skilled manpower in the building industry, e.g. tradesmen in the crafts like bricklaying, carpentry, masonry etc. should be vigorously pursued.
• Above all, the instability of the Nigerian currency (naira) and its constant devaluation and/or exchange rate against the major foreign currencies need to be looked into by the Central Bank of Nigeria (CBN). This will further cheapen the cost of building

6.         SUGGESTIONS FOR FURTHER RESEARCH

The sample size used in the study might be deemed small considering the fact that the population of the study area is very large. One can therefore start by increasing the sample size and observing the extent of agreement or otherwise with the findings of this research. Further research will also help validate the research findings and thus increase its reliability. The study could be extended or conducted entirely for other classes of properties other than housing.

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