In today’s competitive property market, commercial landlords in Nairobi face a balancing act — maintaining high-quality buildings while keeping operational costs in check. Nowhere is this balance more important than in managing service charges, the lifeblood of any well-run property.
Whether you own a Grade-A office tower, a retail centre, or a mixed-use development, understanding how service charge works and managing it transparently can make or break tenant satisfaction and long-term returns.
What Exactly Is Service Charge?
In simple terms, service charge refers to the shared costs of maintaining and running a property. It covers the everyday essentials that keep buildings functional, safe, and presentable spaces, from cleaning and security to lift maintenance, landscaping, and power backup systems.
While rent is usually a fixed amount, the service charge can fluctuate each year depending on the actual costs incurred. This is why transparency in billing and reporting is critical both for landlords who want to safeguard their income and tenants who deserve value for money.
At its best, an effectively managed service charge creates a clean, secure, and efficient environment that keeps tenants happy and your property in demand.
Why Service Charge Matters to Landlords
For landlords, the service charge isn’t just a line item, it’s a reflection of your property’s health. A poorly managed service charge can lead to tenant frustration, delayed payments, and eventually, high turnover. When handled professionally, however, it can:
- Protect the property’s value through consistent maintenance and timely repairs.
- Ensure accurate budgeting, avoiding shortfalls or overspending.
- Strengthen tenant relationships, by demonstrating transparency and fairness.
- Boost occupancy rates, since satisfied tenants tend to renew their leases and refer others.
What Does Service Charge Typically Cover?
Although every building is different, service charge in office buildings and retail centres generally includes:
- Maintenance and repairs of shared spaces
- Cleaning and waste management
- Security services and CCTV monitoring
- Lift and generator maintenance
- Lighting and water for common areas
- Landscaping and gardening
- Equipment servicing (pumps, HVAC systems, etc.)
- Land rates and rent for shared areas
- Property management and insurance
- Contributions to a sinking fund for major future repairs
- In premium residential compounds, similar principles apply though services may also include shared recreational areas, swimming pools, or clubhouses.
Common Service-Charge Challenges in Kenya
1. Lack of Clarity
Many tenants, and even some landlords, struggle to understand how the service charge is calculated. In new developments, initial estimates can be higher than expected since they’re based on projected rather than actual costs.
The solution? Detailed reporting and transparent documentation. At Newpoint, we ensure every tenant receives a breakdown of costs and clear explanations of what they’re paying for.
2. Overcharging or Under-utilisation
Sometimes tenants are billed for services they barely use, or surplus funds are not properly accounted for. A credible property manager will always provide audited service-charge accounts and ensure any unspent balances roll forward to the next year.
3. Unexplained Costs
Unexpected “miscellaneous” charges can quickly erode trust. The key is market benchmarking — comparing service providers’ rates to current market standards to ensure value for money.
4. Absence of a Sinking Fund
Without a sinking fund, landlords end up footing large, unplanned repair bills years down the line. Newpoint advises all property owners to establish and maintain this reserve early on — it protects both your investment and your tenants’ comfort.
5. Poor Communication
Tenants value communication as much as clean spaces and working lifts. We believe updates about repairs, budget changes, or upcoming maintenance should be shared promptly and professionally, not discovered by surprise.
The Role of a Professional Property Manager
A great property manager is more of a strategic partner. For landlords, engaging a professional property management company in Nairobi ensures that:
- Budgets are realistic and based on accurate market data.
- Service providers (cleaning, security, landscaping, etc.) are competitively sourced.
- Monthly and quarterly reports keep you informed on costs and cash flow.
- Tenants receive timely updates and clear communication.
- Compliance with Kenyan standards (OSHA, NEMA, County By-laws) is maintained.
In essence, property management done right brings efficiency, accountability, and peace of mind.
Why Landlords Choose Newpoint Properties
At Newpoint Properties, we understand that every shilling spent on service charge affects both your property’s value and your tenants’ satisfaction. With over 15 years of experience managing commercial buildings, retail centres, and premium residences, our approach combines international best practices with local insight.
Here’s why landlords trust us:
✅ Transparent reporting — Detailed quarterly statements and audited annual accounts.
✅ Tenant retention focus — We prioritise satisfaction through responsive maintenance and clear communication.
✅ Cost efficiency — We negotiate and benchmark all service contracts to keep costs competitive.
✅ Proactive maintenance — We anticipate issues before they escalate, protecting your asset value.
✅ Strategic sinking-fund planning — To safeguard your long-term returns.
“At Newpoint, we believe transparency is the foundation of great property management. When landlords and tenants understand how every shilling is spent, trust grows — and so does the value of the property.”
Partner With Newpoint for Professional Property Management
Get in touch with our Property Management team today — call 0742 122 222 or visit www.newpointproperties.co.ke to schedule a consultation.
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