Where service charge costs an arm and a leg in Coast

You walk out of your front door and play golf anytime you wish. A fitness centre is a walk away, so is the club house.

A couple of years ago, rich Kenyans and foreigners began to invest homes offering ‘lifestyle’ living. They bought units within gated communities and apartment blocks promising exclusivity, luxurious amenities and safety. The gated enclaves boast sports courts, saunas and steam rooms, fully outfitted gyms and large outdoor pools.

SECURITY

Security here not only discourages burglars, but also discourages loitering and keeps away curious eyes. Streets here are quieter, the peace only disrupted by the chirping of birds.

The posted speed limits are adhered to and garbage collected daily. And no, you needn’t t worry about your neighbour’s unkempt lawn since all lawns are manicured by a contracted firm. Oh, and some of these properties are surrounded by impeccably maintained golf fairways.

Kenyan’s growing middle class is now slowly buying into this lifestyle, with more and more paying for homes that come with amenities you would not necessarily find in a typical home, for which developers charge additional fees besides the purchase or rental prices. In their pursuit for cosier lifestyle, they are willing to pay more for operating and maintenance expenses of the premises.

In most of Mombasa’s gated communities, service charge ranges from Sh3,000 per month to Sh15,000 in areas such as Nyali, Tudor and Kizingo — in some sections of Nyali and some in Kilifi county, service charge is as high as Sh30,000 per month.

Vipingo Ridge homeowners part with Sh48,000 every month in service charge. Mr Mike Round-Turner, the general manager, says the cost covers services such as security, garbage collection, maintenance, repairs and keeping the neighbourhood clean.

“It also covers services such as mowing the grass, land rates and the drainage system.

Security is crucial to this development. We’ve security personnel on our payroll, including an international company that manages our security. This, too, is covered by the service charge,” he says.

This is not all homeowners pay here; there is a separate fee of about Sh153,000 paid annually for access to the golf course.

MAINTENANCE

“The golf fee covers four people and includes use of the swimming pool, tennis court, the gym and membership for the Kuruwitu Conservation,” he added.

Besides the golf course, this development boasts a clubhouse, beach house and a stable as well as nature trails.

Another development, Palm Breeze Complex in Nyali, comprises 36 apartments. Within the complex is a gym, swimming pool, sports area and deck where tenants can hold barbecues and parties.

A penthouse duplex here costs Sh28,000 per month in service charge, and tenants are expected to pay Sh50,000 a year in insurance. The service charge for the other apartments in the complex ranges between Sh18,000 to Sh25,000.

“It’s monthly charged payable for the whole year in advance to save on collection costs. We’ve set the service charge at the rate of total charge per year divided by the units, so, all residents pay their fair share and the developer pays the balance for the unoccupied units,” property developer Hanish Lakhani says.

The charges go towards meeting the cost of services such as lighting for common areas, bottled water in these areas, lifts maintenance, servicing of the video entry system and finger print entry system, as well as the swimming pool and gym.

“It also pays for caretaker and guard services, servicing of the BBQ area, bar area and recreation area, garbage collection and water,” Mr Lakhani says.

The more the services on offer, the higher the service charge, says Paul Kinoti, a director at ACL Real Estate Consultants.

UNIFORMITY

He argues that for those that can afford it, it is considerably cheaper to live in such gated communities than in your own compound, especially in “multi-family” concepts, since some costs become a shared responsibility.

With such a concept, a building is designed to house several families in separate housing units.

“If you have a big house on two acres in Nyali and it has well-manicured gardens and a swimming pool, you need lots of maintenance. Depending on the area, the homeowner will not part with less than Sh100,000,” he said.

In some estates in Nyali, he says, homeowners pay Sh2,500 to cater for street lighting, garbage collection and security.

Mr Kimani Thambo, CEO, Himaya Heights Investment, says that in most upmarket areas in Mombasa, such fees range from Sh30,000 to Sh70,000 depending on the location of the development, services offered as well as the quality of the homes.

He explains that the advantage of employing the services of the same provider is bringing in uniformity. Besides, it’s easy to raise concerns when they arise.

“Hiring skilled labour may be a headache, especially when it comes to handling special waste and resolving electricity issues,” he says.

REGULATION

There is also the convenience the homeowner can enjoy since the service provider is under the supervision of the caretaker.

And if you’re wondering, the service charge does not reduce as more units sell, if anything, service charge increases as demand for units goes up, though the fee is mostly guided by the agreement made between the two parties at the commencement of the contract of purchase or let.

The amount of service charge, however, should be based on the package of the services offered, efficiency, location of the development.

“The fact is that in some cases, the high service charge scares away would-be apartment owners or tenants, slowing uptake. In some cases, the charge is collected, but the services are not rendered, which leads to degradation of the premises,” Mr Kimani points out.

In such a case, tenants might move out and cost of future renovation will go up.

He advocates regulation to the ever-rising and arbitrary service charges.

“This can only be achieved if the government, through the Housing ministry or through a professional body like EARB (Estate Agents Regulatory Board) can lay down a law that regulates such charges.