Service charge

To buy a house? High service fees are looking forward to you

Migaa Golf Estate in Kiambu [Courtesy]

Last month, a Kiambu County property developer announced that it had completed its multi-billion shilling project, with property prices starting at 23.5 million shillings.

The property is part of a 400-acre gated community and the master plan promises potential buyers a quiet micro-town life with commercial, industrial, educational, medical and recreational facilities.

However, the company raised eyebrows with the service fee set at Sh18,000 per month, an amount that seems quite high despite being a high-end residential estate.

And it’s not the only one. Developers have levied substantial service charges on the property, with some homebuyers challenging developers over the huge amounts as claims are arbitrary and in some cases unjustified.

For many buyers, high service fees can seem like paying rent for their own home.

Service charges are levied on commercial and residential properties as a management fee that should be used to maintain equipment and structures.

In the case of the developer Kiambu, service fees are set to finance the operation of equipment which will be shared by all residents of the gated community.

These include a clubhouse, landscaped courtyards, pathways, street lighting, ICT and cable TV, security patrols and CCTV, sewage treatment and borehole management.

In some cases, however, residents have protested the requirement to pay service fees upfront even though real estate and infrastructure development work has yet to be completed.

Residents of Migaa Golf Estate in Kiambu, for example, have sued the property developer for offering to build new high-rise buildings on the estate.

Samara Estate is a project comprising 28 blocks of 1,959 residential units which the Migaa Residents Association says will devalue their property and go against the master plan.

“The proposed high-rise, high-density, low-cost apartments, under the Samara Estate name, will have nearly 2,000 units and more than 10,000 residents in 28 blocks of up to 10 stories each,” the agency said. association in a request to the Kiambu environmental court.

“It goes against the vision of the estate and the concept that the current owners have adhered to.”

“Currently, we have more than 300 residents who have been promised a certain standard of living in Migaa,” said one resident who requested anonymity.

“The scale of development involved in Samara will expand the current amenities, which have not been built for such a large number of residents.”

“As part of the requirements, the management is demanding 1.2 million shillings in service charges up front to cover the next 10 years and I personally have refused to pay this because as things stand , there is no convenience to justify this payment,” the resident said.

According to Linda Njoroge, a lawyer and land conveyancing expert in Nairobi, the service charge results from a gap between the services provided by the public utility bodies and those the developer wishes to install.

“Sometimes you have development projects that are set up outside the electricity and water networks provided by Kenya Power or Nairobi Water (and Sewerage Company), for example, and the developer is obliged to invest his own money to provide these services,” she said. .

“This is the case in many gated communities, which is why it is crucial for potential buyers to read the fine print and request all information relating to these fees before signing purchase contracts.”

However, how they are calculated, amortized and revised is often left to the developer’s discretion and over time this has been the cause of many legal disputes.

In 2019, the Constitutional Court denied a petition by Tiffany Wangeri, a resident of New World Garden Estate in Kisaju in Kajiado County in a dispute over service charges.

In the dispute, New World Garden Estate doubled the service charge from 2,000 shillings to 4,500 shillings per month. Ms Wangeri refused to pay, demanding an explanation for the price hike which she said did not include water and electricity, which were paid for separately.

The developer then cut off the water to his house, forcing him to buy off the estate. However, water vendors were turned away at the main gate, with the estate claiming that its refusal to pay the security fee meant guards did not have to open the gate.

In the ensuing trial, the court said Wangeri failed to prove how his constitutional rights were violated.

“The petitioner lives in a community with rules and regulations,” the judge said in the decision.

“All other members oblige and fulfill their obligations. Since the applicant chose not to follow the regulations, it must have disqualified itself from obtaining common services, including water from the common spring. »

According to the court, his contractual obligations included the payment of service fees and failure to do so amounted to a refusal of the shared services offered by the estate.

“Paying the service charge would put her in a position to demand common services from the defendant, including the right to obtain water from the common borehole, otherwise she could not legitimately demand and consume water. water that she does not pay for since there are many more service charges that benefit the community more than the water,” the court said.