Challenges of service charges in multi-tenanted buildings in Abuja -ESV Awojobi Omowale

An Estate Surveyor and Valuer ESV Awojobi Adeboye Omowale has disclosed that service charge in multi-tenanted buildings in Abuja has various challenges. ESV Omowale stated this yesterday in Abuja .

He said Service charge are fees levied on tenants to cover the operational costs of common areas and facilities in multi-tenanted properties. “These might include elevator maintenance, landscaping, waste disposal, electricity for shared spaces, and security services”.

He said that Abuja, which is Nigeria’s bustling capital, has witnessed explosive growth in its real estate sector over the past decade.
“Abuja is a hub for government offices, international organizations, and a burgeoning middle class, the city boasts an array of high-rise apartments, office complexes, and shopping malls.
These multi-tenanted buildings structures housing multiple occupants under one roof rely heavily on service charges to fund maintenance, utilities, security, and shared amenities”. However, the administration of these charges has become a flashpoint for disputes, inefficiencies, and dissatisfaction among landlords, tenants, and property managers.

He said, In Abuja, where buildings like the Jabi Lake Shopping Mall and various Central Business District high-rises exemplify this model, service charge are typically calculated based on factors such as floor space, usage, or a fixed percentage of rent.The goal is to ensure equitable distribution of costs, but in practice, this often leads to contention.
Ideally, these charges promote efficient property management and enhance tenant satisfaction. Yet, as Abuja’s urban landscape expands—with new developments sprouting in areas like Maitama, Garki, and Wuse—the system is strained by rapid population influx and economic pressures. Inflation, fluctuating utility tariffs, and the naira’s volatility exacerbate the burden, making service charges a critical yet problematic aspect of real estate in the city.
Disputes Over Calculation and Apportionment
One of the most pervasive challenges is disputes arising from how service charges are determined and apportioned. Tenants often question the fairness of allocations, especially in buildings with diverse occupants—such as a mix of residential apartments, retail outlets, and offices.

For instance, a ground-floor retailer might argue against paying equally for elevator maintenance that primarily benefits upper-floor residents.

In Abuja’s commercial high-rises, where businesses have varying operational needs, these disagreements can escalate into legal battles.

Transparency and Accountability Issues
He said Lack of transparency is another major hurdle. Many tenants complain about opaque accounting practices, where property managers provide vague breakdowns of expenditures. In residential estates and commercial buildings across Abuja, bills might lump costs together without itemized details, making it difficult for occupants to verify legitimacy.

This opacity fuels suspicions of mismanagement or even embezzlement.
In high-rise commercial buildings, managing diverse tenant expectations compounds the problem. Disputes over common area maintenance often arise when service delivery falls short—think unclean lobbies or delayed repairs—despite hefty charges.

High Costs and Economic Pressures
He said the sheer cost of service charges poses a significant challenge, especially amid Nigeria’s economic headwinds.
In Abuja, where rental prices are among the highest in the country, additional fees can push total occupancy costs beyond affordability for small businesses and middle-income families. Maintaining facilities in multi-tenanted properties is expensive, requiring regular budgeting for items like HVAC systems and fire safety equipment.

He said Tenants in residential properties report that these fees sometimes rival or exceed rent itself, leading to rent delays and landlord-tenant conflict In commercial settings, non-prompt payment structures and communication breakdowns further aggravate the issue, with some tenants withholding payments until grievances are addressed.

Legal and Regulatory Gaps
He said that the Nigeria’s legal framework for property management, governed by laws like the Tenancy Laws of various states and the Abuja Geographic Information System (AGIS), provides some guidelines but lacks specificity on service charges.
“ In Abuja, under the Federal Capital Territory Administration, there are no comprehensive regulations mandating transparency or dispute resolution mechanisms for multi-tenanted buildings. This vacuum allows for arbitrary practices, with legal concerns including unenforceable contracts and prolonged court battles over charges
“Experts should noted that without equitable apportionment rules, challenges persist, such as irregular fee payments and congestion in shared spaces”.

Pathways to Resolution
Addressing these challenges requires a multi-pronged approach.
He also urged Property managers to adopt digital tools for transparent billing, such as apps that provide real-time expenditure tracking. “Industry bodies like the Nigerian Institution of Estate Surveyors and Valuers (NIESV) advocate for standardized guidelines on charge apportionment to ensure fairness”.

He concluded by saying that
service charges are indispensable for sustaining Abuja’s vibrant multi-tenanted buildings, but their challenges ranging from disputes and transparency issues to high costs and regulatory shortcomings threaten tenant satisfaction and market stability.
“As the city continues to grow, stakeholders must prioritize reforms to create a more equitable system. By doing so, Abuja can enhance its appeal as a premier destination for living and business, ensuring that service charges serve rather than strain its residents”.