5 Questions to Ask About Service Charge Before You Buy a Property

Buyers fall in love with the apartment. They study the finish, the view and the price. Almost nobody interrogates the one number they will pay every single year for as long as they own the place: the service charge.

That is a costly blind spot. A service charge can quietly run into hundreds of thousands, even millions of naira a year on a premium Lagos property, and it can rise sharply with almost no warning. Worse, the money is often handed over with no idea how it is spent.

Asking the right questions about the service charge before you buy is not being difficult. It is protecting yourself from a lifetime of bills you never agreed to. Here are the five questions that matter most.

What a Service Charge Actually Covers

Before the questions, understand what you are paying for. A service charge is a recurring payment for the upkeep of the shared parts of a property that no single owner uses alone.

A Guardian report on service charges in estates describes it as a mandatory payment towards the cost of maintaining common facilities, beyond what a resident uses inside their own apartment. In practice, that means security, power and diesel for the generators, water treatment, cleaning, waste, lifts, common-area electricity, landscaping, closed-circuit cameras and often block insurance.

That is a long list, and each item is a cost that someone decides, spends and, ideally, accounts for. The five questions below are about who, how and how much.

The 5 Questions to Ask About Service Charge Before You Buy

1. What exactly does it cover, and can I see the itemised budget?

Never accept a single lump-sum figure. Ask for the line-by-line annual budget showing what each service costs. A charge is usually built either as a unit cost, where the yearly budget for each service is divided across the units, or as cost-plus, where the facility manager adds a percentage, often around 15%, on top of what the services cost. You are entitled to know which method is used and what sits inside the total.

2. How is it set, how often is it reviewed, and how fast can it rise?

Service charges move, and in Nigeria the thing that moves them most is diesel. Diesel prices climbed by more than 25% in a single year, from around ₦1,404 a litre in May 2024 to ₦1,758 a litre by May 2025, according to official price data. Because power is often the single biggest line in the charge, a year’s money can run out in a few months when diesel spikes. Ask how and when the charge is reviewed, and what a bad year could do to it.

3. Who manages the money, is it in a separate account, and are the accounts audited?

This is the transparency question, and it is the one dishonest managers hate. The money you pay should sit in a dedicated account and be accounted for openly. The same Guardian report stresses that a facility manager must account for how the service charge is spent, and that every resident should be able to request the accounts. Ask whether the books are independently audited and shared with owners each year.

4. Is there a sinking fund for major works, held separately, and who controls it?

A service charge covers the day to day. A sinking or reserve fund is money set aside over time for big future repairs like lifts, roofs and external works, and best practice is to hold it in a separate account. These funds can be large and are a real target for misuse. At Lagos’s 1004 Estate, buyers each paid ₦300,000 into an asset replacement fund that reportedly totalled about ₦322 million, which a former manager was accused of failing to release. Ask if a sinking fund exists, where it sits, and who can touch it.

5. How are arrears and disputes handled?

Find out what happens when owners do not pay, and how disagreements with the manager or residents’ association are resolved. This area is less settled than buyers assume. In one Lagos case, a Federal High Court held that residents cannot be forced to join an estate association and that membership and dues are voluntary. Understand the estate’s rules, your obligations, and the route to challenge a charge before you are bound by them.

Who Regulates Service Charges in Lagos? Almost No One

Here is the fact that makes these questions essential rather than optional. There is no Lagos law that sets, caps or audits residential service charges.

The Lagos real estate regulator licenses estate practitioners and developers and caps agency fees, but it does not fix or police what an estate charges owners for services. That means your service charge is governed almost entirely by contract, by the deed, the estate bye-laws and the association rules you sign up to. Whatever protection you want has to be in that paperwork, because the state will not supply it for you.

This is exactly why the completed-versus-new decision and the developer behind an estate matter so much. Our guide on choosing off-plan or completed property covers the wider due diligence that sits around this.

Why the Developer and Manager Matter Most

Because the law leaves service charges to contract and trust, the character of the developer and the facility manager is your real protection.

A serious developer sets a realistic charge, uses a professional manager, keeps the money in a proper account, runs a genuine sinking fund and shares audited accounts. A weak one sets a low charge to close the sale, then lets it balloon, or controls the fund with no transparency. The questions above are how you weigh the service charge before you buy, not after you are locked in. For more on buying well in this market, our strategies for the best real estate deals in Lagos are worth reading alongside this.

What a Suspiciously Low Service Charge Really Tells You

Buyers instinctively treat a low service charge as good news. Often it is the opposite, and reading it correctly is part of doing your service charge homework properly before you buy.

A charge set too low to actually cover security, power, water and maintenance is not a saving. It is a shortfall waiting to happen. Either the standard of service will collapse, or owners will be hit with sudden special levies to plug the gap, or the estate will quietly run down because there was never enough money to maintain it. A charge that looks too cheap for a premium estate deserves as much suspicion as one that looks too high.

The healthiest sign is not the lowest number. It is a realistic charge with a clear budget behind it, matched to the services actually delivered. That is what keeps an estate looking and working years after handover.

Budget for It, Do Not Just React to It

A service charge is not a one-off at purchase. It is a recurring cost you carry for as long as you own the home, and it should sit inside your buying decision from the very start, not turn up as a surprise afterwards.

Before you commit, add the annual service charge to your running cost of ownership and ask what it does to your numbers over five and ten years, allowing for the diesel-driven rises covered above. For a rental investor, the charge eats directly into yield. For an owner-occupier, it is simply a bill that arrives every year whether or not you have used the pool or the gym. Sorting out the service charge before you buy means no unpleasant surprise twelve months after you move in.

Get the Service Charge in Writing

Because there is no regulator setting the rules, the paperwork you sign is your only real protection. Sorting the service charge before you buy means getting the terms in writing, not on a promise.

Ask for the estate bye-laws, the management agreement and the current service-charge budget as documents you can keep, not a verbal summary at the viewing. They should spell out what the charge covers, how it is set and reviewed, who manages the money, whether there is a sinking fund, and how disputes are handled. If an estate cannot or will not put its service charge on paper before you buy, treat that as the clearest answer of all.

How Edenbrooks Homes Handles Service Charge

At Edenbrooks Homes, we treat the service charge as part of the promise, not an afterthought. Our buyers get a clear picture of what the charge covers and how the estate is managed before they buy, because a home is only as good as the way it is run after you move in.

Our developments, including Maison D’Eko Residences III, Maison D’Eko Residences, and Wakefield Apartments, are managed to a standard that answers all five of these questions in your favour.

Contact us today to start the conversation. Our team will walk you through exactly what the service charge covers on any Edenbrooks property, and how the money is managed, before you commit a naira.

Email: [email protected] | Call/WhatsApp: +2347060474224 | +2348087691124