Service charge surge in Lagos as residents grapple with cost of living in estates 

This service charge is a significant part of his overall living expenses, considering that his rent alone costs N2.8 million per year.

While he acknowledges that this fee is lower than what some residents in more upscale estates pay, he notes that it is still a substantial sum for services like security and cleaning.

“It’s not as outrageous as some other places where people pay N800,000 or more, but it’s still a hefty sum for services like security and cleaning,” Oke explained.   

His estate, a mixture of asphalt roads and interlocked streets, offers services like water, waste management, and cleaning of communal areas.

Oke’s experience reflects a broader trend observed in Lagos, where residents in estates are facing higher service charges as the demand for modern amenities and enhanced security standards grows.

As more Lagosians seek contemporary living spaces, some are finding that the costs associated with these developments can sometimes be higher than expected, raising questions about whether the quality of services always aligns with the price.

As Lagos grows, residential estates that offer exclusivity and comfort are becoming more desirable but also more expensive. Service charges, covering maintenance, security, and amenities, have risen sharply, creating a financial strain for many residents.

Patrick Oke, a resident of Karyfarm Estate in Obawole, Ifako-Ijaiye, pays N300,000 annually for service charges in addition to N2.8 million in rent.

While the service charge seems modest compared to estates in areas like Magodo, Lekki, and Victoria Island, it’s still a significant cost.

In his estate, residents pay their own electricity bills directly to the Ikeja Electric Distribution Company (IKEDC), unlike some estates where residents pay inflated electricity prices to the estate.

Oke’s service charges cover estate dues, water bills, and waste disposal. The estate offers a mix of tarred and untarred roads, with security measures including car tags and visitor clearance comparable to more expensive estates.

Oke revealed to Naijaonpoint that he finds the service charge worthwhile, noting, “The top-notch security, regular cleaning twice a week, and reliable water supply make the cost worthwhile. We get the same level of service you’d expect in higher-priced estates, but at a much lower cost.” 

Similarly, Gideon, a resident of Harmony Estate in Ogba, pays N60,000 monthly (N720,000 annually) for service charges, separate from his N700,000 annual rent for a 2-bedroom apartment.

The service charge covers security levy and compound cleaning. However, he pointed out that different landlords within the estate charge varying rates, leading to inconsistencies, and there is no transparency or accountability on how the charges are spent.

Gideon acknowledged the added security and the tidy environment, saying, “The security here is solid, and the compound is always clean, but when you’re paying N60,000 a month and sharing the compound with three other tenants, it’s hard to justify the cost. There’s no accountability on how the money is spent, and for that amount, I feel the value isn’t really there.” 

Gideon acknowledged the added security and the tidy environment, saying, “The security here is solid, and the compound is always clean, but when you’re paying N60,000 a month and sharing the compound with three other tenants, it’s hard to justify the cost. There’s no accountability on how the money is spent, and for that amount, I feel the value isn’t really there.” 

His experience highlights the ongoing challenge many residents face in balancing the cost of comfort with the value they receive, particularly in estates with unclear service charge structures.

Temidayo, a property manager responsible for overseeing the penthouse in a large residential development around Chevron Drive, Lekki, spoke to Naijaonpoint about service charge structures in upscale estates.

The development consists of six blocks, each divided into lettered sub-blocks from A to N.

While Temidayo is specifically in charge of managing the penthouse, he clarified that other buildings in the estate are managed by different property managers, depending on the ownership of the structures. These managers, however, align with the general estate management unit.

Temidayo revealed that the penthouse, which his client purchased for approximately N130 million, is currently rented out at N12 million per annum.

The monthly service charge for the penthouse is N35,000, covering security and cleaning of the immediate compound.

He noted, “A portion of the service charge also goes towards maintaining the public amenities that everyone shares, like the car parks, gym, and swimming pool. Even if some residents don’t use them, they still have to pay for it as part of the service charge.” 

The estate is known for its high level of security, with surveillance at all entrance and exit points, as well as digital access cards for residents.

“The security here is top-notch,” Temidayo stated.  

“Residents feel safe knowing that their buildings are well-guarded. Visitors have to get clearance before they’re allowed in, so there’s no risk of unauthorized access.” 

In terms of estate maintenance, Temidayo pointed out that residents are not allowed to paint the exterior of their buildings on their own.

“Every two years, residents contribute to a collective repainting of the entire estate,” he explained. “It’s done to ensure that all buildings look uniform and up to standard. It also adds to the overall appeal and value of the estate.” 

On the enforcement of service charge payments, Temidayo shared, “If a resident doesn’t pay their service charges, the estate management will disconnect their electricity. In some cases, they may even be prevented from moving out until they’ve settled their outstanding charges.” 

Temidayo also provided insight into the broader service charge situation in upscale estates across Lekki, Victoria Island, and Ikoyi. He revealed that monthly charges could range from N35,000 to over N130,000, leading to annual service fees of N800,000 to N1 million or more, depending on the services offered.

“Some estates even supply 24-hour electricity to residents, buying power directly from the Discos and redistributing it,” he noted.  

“While it’s more expensive than the usual tariff, it guarantees round-the-clock power, with backup generators kicking in if there’s an outage.” 

Despite the high costs, Temidayo believes the service charges for the penthouse he manages are well worth the value.

“With the high level of security, cleanliness, and the serene environment, the residents see the value in what they pay for,” he concluded.  

“It’s all about offering a premium living experience, and that’s what they’re paying for.”