What service charge means
Service charge is the shared running cost of a building or estate, divided among the people who use it.
It typically covers security, diesel for the generator, cleaning of common areas, waste disposal, water, and maintenance of shared facilities such as lifts, gates and drainage.
It is separate from rent. Rent is what you pay for the right to occupy your unit. Service charge is what you contribute toward keeping the shared parts running.
How it is used
In Nigerian estates and apartment blocks it is usually collected annually or quarterly by the landlord, a facility manager or a residents association.
The well run version comes with a budget at the start of the year and a statement at the end showing what was actually spent. The badly run version is a figure announced by WhatsApp with no breakdown, which is where most service charge disputes begin.
Key features
- Covers shared services rather than anything inside your own unit
- Should be based on a budget and accounted for with a statement
- Payable under the tenancy agreement or estate rules, not automatically
- Usually allocated between units by size, or equally, depending on the arrangement
- Not the same as rent, and generally not refundable like a caution fee
How this works in Nigeria
The core problem is transparency. Residents are often asked to pay substantial sums with no budget, no receipts and no account of what happened to last year's money.
Your leverage comes from the paperwork. Where the tenancy agreement or estate rules set out what service charge covers and how it is calculated, you can hold the manager to it. Where the agreement is silent, you are negotiating rather than enforcing, which is why the clause matters when you sign rather than when you are annoyed.
Service charge vs rent vs caution fee
Rent buys occupation of your unit and goes to the landlord.
Service charge funds shared services and should be spent on them, whether it is collected by the landlord, a facility manager or a residents association.
Caution fee is a refundable deposit held against damage, and you get it back at the end if you caused none. Of the three, service charge is the one most likely to be disputed, because it is the only one where you are entitled to know how the money was spent.
Limits and risks
Refusing to pay is risky where the obligation is in your tenancy agreement, because non payment can be a breach and can be used against you.
The better route is to demand the account. Ask in writing for the budget and the statement of expenditure, keep copies, and raise it with other residents, since a group asking the same question is much harder to ignore than one person.
Worth knowing
Before signing a tenancy in an estate, ask what the service charge is, what it covers, how it is calculated and whether accounts are published. Ask before you sign, not after you move in.