The Issue of Exorbitant Service Charge in Nigerian Real Estate
Service charges are the amounts levied on the tenants by the landlords to cover for extra facilities or services they may provide. These services may include provision of generator, general cleaning of the compound, installation of Air conditioners, gardening or general maintenance. In most new Houses and Apartments for rent, these service charges could reach up to fifty percent of the original cost of renting the apartment.
In recent times, a lot of landlords have lost their tenants because of the exorbitant service charges they levy on them. Aside from the fact that rent generally is expensive, service charges seem to compound the issue of the average person looking for Affordable houses to rent. The issue of high service charge is majorly predominant in houses on the Island in Lagos. Considering the power situation and existence of businesses, the need to maintain a high profile environment comes up. This would include the provision of these various facilities hence the extra charges.
Now, landlords are at liberty to levy these service charges as long as they provide them, but in cases when either the price is too high or the service is not provided, the tenants are also at liberty to protest.
The existence of service charge could be beneficial to a large extent, but in many cases makes the whole idea of affordable houses for rent look like a fairy tale. It is at this point when service charge becomes too high, that it turns to extortion.
