Service charge

Court denies N100m lawsuit, upholds company’s powers to set service fee

Wale Igbintade

A Lagos High Court sitting in Ikeja has dismissed the N100 million lawsuit filed by the owners of Pearl Garden Estate located in the village of Sangotedo in the Eti-Osa Local Government Area of ​​Lagos State , and confirmed the authority of CMB Building Maintenance and Investment Company to repair service charges for condominium owners.

Judge Mufutau Olokoba made the statement while giving judgment in a lawsuit brought by some of the owners against CMB Property Management and Oyetubo Jokotade Estate Resource Limited (former landowners).

Four owners of the estate, Mr. Francis Adesuyi, Mr. Felix Obiakor, Mr. Martin Ajayi-Obe and Mr. Peter Afenotan, who filed the complaint on their behalf and on behalf of other owners of the Pearl Garden estate, had among others begged the court to declare arbitrary cross-linking and service charges by the property management illegal.

But in his judgment, Judge Olokoba upheld the estate management’s right to set both charges, saying that having agreed to pay the estate’s maintenance charges, the owners could not renege on the agreement.

The court, however, held that there must be an agreement between the estate management company and the owners on the actual amount to be paid for the services.

The judge said: “There is no doubt that the defendant is entitled to collect the service charge and that the residents/owners are liable to pay the service charge as set out in the sale and management agreement.

“The way and manner in which the defendant, in collusion with the security men and the police men, proceeded to recover payment for the services rendered by the defendant must be discouraged.

“Payment for an agreed service rendered is necessary to support the purchase of the services. The court is firmly of the view that the residents/owners must pay the service charges as set out in the contractual agreement. The rate of the service charge should be agreed between the parties.

“It should be noted that none of the claimants had paid the service charge, not even the N12,500, which was suggested by the owners. Furthermore, no physical evidence was presented in court to show that any of the plaintiffs had paid the cross-linking fee.

“Furthermore, for the members of the Pearl Garden Estate (PGE) to have entered into an agreement to pay the maintenance charges of the estate, the owners/residents cannot opt ​​out of payment for services provided within the estate.

“On the other hand, service providers cannot unilaterally impose fees that are not included in the agreement. Parties should resolve issues amicably by reaching consensus.

The court later denied damages of 100 million naira demanded by the owners for breach of their rights while enforcing the payment of service and cross-linking fees.