Kenya’s homebuyers are grappling with the ever-rising and arbitrary service charges that have significantly raised the cost of owning property and made nonsense of their efforts to escape the burden of paying rents.
Property developers say the charges go towards meeting the cost of services such as security, backup electricity, water, cleaning, waste management and health clubs. But homeowners have found the inclusion of these charges in property purchase agreements unacceptable leading to fierce court battles in some cases.
Homeowners are particularly upset by the ease with which the developers set and increase the fees that they continue to levy long after the houses have been sold to them. In Nairobi, for instance, monthly service charges for residential houses range from Sh3,000 to Sh50,000 depending on location and the range of services offered.
Commercial office space is currently priced at an average Sh20 per square foot in the city and can rise up to Sh45 per square foot with the provision of common marketing services for the tenants. A service charge of Sh30,000 per month held constant for 20 years — the typical lifespan of a mortgage — amounts to Sh7.2 million (enough to buy another unit) and continues to accumulate for a lifetime.
The fees also become a key driver of rent inflation by forcing those buying houses to lease out to charge higher premiums in pursuit of reasonable profit margins.
Retirees, whose earnings fall substantially over time, are among the demographics hit hardest by the high service charges that remain constant or rise with time.:eek: