Service charge

Service charge pays for the parts of a building or estate that nobody owns alone: the gate and guards, cleaning of stairs and corridors, garbage collection, lifts, generators, water pumps, common-area lighting, gardens and insurance of the building. In Kenyan listings it is usually quoted separately from rent: monthly for homes, and often by floor area for offices and shops.

Who sets it.

• Apartments and estates with sectional titles. Under the Sectional Properties Act 2020, the unit owners together form a management corporation once the sectional plan is registered. The corporation must keep the common property in repair and insured, keep a fund for those costs, and raise it by levying contributions on owners in proportion to each unit's share. That contribution is what owners call service charge. The corporation may hire a property manager to run things day to day.
• Older blocks on long leases. Many flats sold before the 2020 Act are run by a management company set up by the developer, and the lease says how service charge is worked out. The Act requires these long leases to be converted to sectional titles, after which the management company hands its assets and duties to the owners' corporation.
• Rented homes. For a tenant, the service charge is whatever the tenancy agreement says. Landlords quote rent "plus service charge" or "inclusive of service charge", and some pass on the estate's charge in full.
• Shops and offices. For controlled business tenancies under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap 301, the Business Premises Rent Tribunal decides disputes about rent, and where the rent includes a service charge it can fix the amount. Its rulings show it assessing service charge alongside rent when a landlord serves notice of an increase.

When it is not paid. A management corporation can recover unpaid contributions from the owner as a debt, and can register a caution against the owner's unit for the arrears, which then acts as a charge on that unit. If you are buying, make sure any arrears are cleared before completion.

Disputes. In a sectional development, the corporation can set up an internal dispute resolution committee to hear disputes, and a party unhappy with its decision can appeal to the Environment and Land Court. Tenants of controlled business premises take service charge disputes to the Business Premises Rent Tribunal. Other residential tenants should start with what their tenancy agreement says.