Court Upholds Estate Mgt’s Authority to Fix Service Charges

Wale Igbintade

A Lagos High Court sitting in Ikeja has held that a property management company, CMB Building Maintenance and Investment Company Limited has the right to fix service and reticulation charges for homeowners in Pearl Garden Estate situated at Sangotedo Village in Eti-Osa Local Government Area of the state.

Justice Mufutau Olokoba made the declaration while delivering judgment in a suit filed by some of the homeowners against CMB estate management and the Oyetubo Jokotade Estate Resource Limited (previous landowners).

Four homeowners in the estate, Francis Adesuyi, Felix Obiakor, Martin Ajayi-Obe and Peter Afenotan who filed the suit on behalf of themselves and other homeowners within the Pearl Garden Estate had among other things prayed the court to declare the arbitrary reticulation and service charges by the estate management as illegal.

In his judgment, Justice Olokoba upheld the right of the estate management to fix both charges saying that having agreed to pay for the charges of maintaining the estate, the homeowners cannot renege from the agreement.

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

The judge said: “ No doubt the defendant is entitled to collect the service charge and the residents/homeowners are bound to pay the service charge as stated in the Sale and Management Agreement.

“The way and manner the defendant, in collusion with the security men and men of the Police force, went about recovering payment for services rendered by the defendant must be discouraged.

“Payment for an agreed service rendered is necessary to sustain the procurement of the services. The court is of the firm view that the residents/homeowners must pay the service charge as contained in the contract agreement. The rate of the service charge should be the subject of agreement between parties.

 “Worthy of note is the fact that none of the Claimants had paid the service charge, not even the N12, 500, which was suggested by the homeowners. Also, No material evidence was tendered in court to show that any of the claimants paid the reticulation fee.

“Furthermore, for the members of the Pearl Garden Estate to have entered into an agreement to pay charges for maintaining the estate, the homeowners/residents cannot withdraw from payment of services being provided within the estate.

“On the other hand, the service providers cannot unilaterally impose charges not captured in the Agreement. Parties must resolve the issues amicably by coming to a consensus.”

The court subsequently refused the N100million damages demanded by the homeowners for infringement of their rights during the enforcement of the service and reticulation charges payment.