Owners of 1,004 Flats Demand Change of Facility Manager
The flat owners at the sprawling 1004 Estate in Victoria Island, Lagos are presently taking signatures of their members to enable them reach a consensus in their resolve to change their facility manager, 1004 Estates Limited.
The flat owners at the sprawling 1004 Estate in Victoria Island, Lagos are presently taking signatures of their members to enable them reach a consensus in their resolve to change their facility manager, 1004 Estates Limited. At the weekend, they said over 700 of them, out of a total number of 1070 owners, had signed the mandate. The company, they said over-burdens them with bills that do not have their input as partners. They have also opened an account with a bank and asked their members to pay specific sums of money for them to run the estate. However, the Chief Executive Officer of the facility management company, Mr. Sam Ukpong has gotten a court injunction to stop the process. On the owners’ complaint that the company does not render an account to them, the CEO made reference to a 40-page service charge report and budgets emailed to them annually over the past four years and which are also available on the company’s website, Bennett Oghifo reports
The homeowners at 1004 are resolute in their demand for a change of their facility manager, 1004 Estate Limited because they claim it does not serve their interest. They are slammed with huge bills for services and are not given the opportunity to discuss the items on it or negotiate a best price for them. Rising from a meeting last weekend, two of the principal officers of the body of flat owners, Chief Dele Ogedengbe, Chairman of the Legal Committee, 1004; and Mr. Anthony Ogunkoya told THISDAY how distraught they were because they felt exploited by the facility management firm.
The estate, they said is a communal property and because the home owners would not be able to manage the facilities to keep them in good shape they accepted the facility management company, and that it was stated in their letters of offer for the purchase of the flats that “we will manage it for you at cost. So one of the biggest problems that we had with this guy when we came was, if it is at cost, then it has to be an open book. We have to see what is the cost, but our friend initially agreed that we should get KPMG to audit the account and when KPMG came he refused to cooperate for more than one year.”
A sore point, they said, was payment for electricity, which they accused the company of pricing arbitrarily. “We were paying N50 per per unit of electricity, and the explanation given was that we were about 30 per cent occupancy in 2010 and that by the time we get to 80 per cent occupancy we can reduce the price, which we all agreed to. But along the way in 2011 September, there was a shady deal in which UAC Plc said after the outright sale they were handing over to one Espania company to manage the facilities, but this was a ruse and shady deal by UPDC, the property development arm of UAC. Later we found out at Corporate Affairs Commission (CAC) that Espania is owned by Mr. Ukpong and his wife.”
They said when Ukpong took over the management of the estate’s facilities, he increased the electricity tariff to N75 per unit. “We challenged him but he refused, we asked him to take it back to N50 per unit but he also refused and we now reported the matter to Nigerian Electricity Regulatory Commission (NERC), which wrote to EKDC (Eko Disco) and Eko Forum. On their intervention, we all did the calculation and they said we should be paying N41.7 – approximately N42 per unit. He was part of this and we agreed that we should manage it together. He signed the document but refused to implement it till today; we were paying the N41.7 until a month ago when he went and got an injunction against NERC.”
The flat owners said he employs delay tactics, explaining that they have been to arbitration with him for over two years without getting the issue resolved, because “unfortunately for us, one of the arbitrators is the vice-president, Prof Yemi Osibanjo, and once he became a candidate of the All Progressives Congress (APC), he couldn’t sit since February. Now, they are supposed to appoint a new arbitrator but they refused and we found out that two months ago, the vice-president resigned as arbitrator and they never communicated it to us until our lawyer wrote to them and quoted some sections in law, saying it is their duty to make sure they appointed another arbitrator.”
They said at the initial stage, they paid service charge of N450,000 but that the facility management company in 2011 increased it to N750,000. “We refused to pay and said we will pay N350,000 which we paid. He has to give an account to us for all the money he has collected in the past because they told us it was going to be at cost. At the end of that year, he asked us to pay an extra N200,000, arguing that he had borrowed N17 million from the bank and allocated it to us to pay and we told him we are not going to pay.”
The following year, they paid N350,000 and after that they brought it down to N250,000 and threatened not to pay again unless he showed them an account. However, beginning from last year, they resolved to pay N15,000 per month, saying they will stop giving him money in bulk.”
They alleged that statutory charges were paid to him and that he did not remit to the government. These comprise the land use charge and ground rent, among others.
They said five weeks ago, the facility manager asked all flat owners to pay N500,000 because it was using electricity generators alone to power the estate. “He fixed this unilaterally without discussing with anyone. So the homeowners, not the residents, now decided that enough is enough, we are not going to pay him a kobo again. He has to go; he cannot force himself to be our facility manager.”
In 2006, according to them, they paid N300,000 as asset replacement fund, which ought to be kept in a Trustee Account to yield interest to replace any faulty capital assets like the generators and so on. “Since then, we have been asking for the statement, because this is our money.
“In respect of electricity, we found out that he overcharged us by N1 billion. He has no authority to sell electricity. We want him out and we are willing to pay him his severance money.”
The Facility... 1004 Estate, Victoria Island is the largest high rise luxury estate in Nigeria consisting of maisonettes, flats and studio apartments and has become the destination of choice for discerning corporate companies and individuals. The estate has consistently operated a 24 hour power and water, recreation and security environment successfully for over four years and is dutifully cleaned three times daily with an all round the maintenance service, which has attracted a 40 per cent expatriate occupancy, with all the major oil and gas, banking, internet, telecoms and FCMG companies confidently housing their staff and families on the estate.
The estate has a high value proposition in terms of its centrality, its amenities, its low cost profile and the high security rating for these companies and individuals in comparison to all other estates offering these same services in the immediate environs. 1004 estate has indeed proven to be a roaring success story for all property investors as the capital values have risen by over 150 per cent on the two bedroom, three bedroom and 4 bedroom flats which initially cost N20 million, N25 million, and N30 million respectively and now sell for a minimum of N50 million, N60 million and N65 million each. The annual rents have continued to steadily rise by100% from an average N1.5 million p. a initially to between N3 million and over N4 million p.a. The rental and purchase demand for the estate’s flats continue to remain remarkably high.
1004 Estates Reacts… Reacting to the allegations, Ukpong said: “Our widely dispersed property investors came into the estate by virtue of an offer letter and a sublease agreement over each individual flat containing the terms and conditions which also incorporated an obligatory management agreement for the hollistic management of the estate and a schedule for the rules and regulations for the incorporation of the official 1004 HOUSING ESTATES HOME OWNERS ASSOCIATION “1004HEHOA” with a provision for one trustee from1004 Estates Ltd and other elected trustees to aid good neighbourliness, information and interaction from amongst our home owners by at least 50 per cent of our 1070 sub-lessees.
“Only About three per cent of our sub-lessees occupy their flats in the estate, whilst the majority 97 per cent are mostly investors for income. However, despite this bright picture and in contravention of the stipulations of the terms of the sublease and without the knowledge and consent or election by either the other
entitled 1062 sub-lessees and 1004 Estates Ltd, only eight individuals surreptitiously incorporated an illegal association called the 1004 Estates Home Owners and Residents association (1004 HORA) for their own private interests and agenda.”
He added: “One of the articles of their incorporation (unknown to all the other entitled sublessees) also clearly reveals their intention to privately take over the estate as soon as possible through the instrumentality of the tenants of other sub-lessees in direct contravention of the above management agreement.
“The ring leaders of this illegitimate group are Mr. Tayo Soetan, Mr. Ochuko Akpobrosike, Mr. Samuel Aremu, Mr. Femi Romiluyi, Mr. Tosin Ajakaiye and Mr. Anthony Ogunkoya who immediately commenced to make the following coercive illegal and illegitimate demands:
“Mr. Soetan and Akpobrosike (a tenant) demanded to be appointed directors of the company 1004 Estates Ltd without either any financial investment or shareholding or they would ensure that the estate collapses. This was rebuffed as a sublease of one single flat amongst 1070 flats in the 1004 Estate is distinct from and does not entitle one to the 1004 Estates Ltd company shareholding for gratis.
“Two, that 1004 Estates Ltd should adopt a dubious and unknown discount card fronted by Mr. Ochuko Akpobrosike as the mandatory estate financial payment system rather than the open choice of the internationally renowned VISA and Master Cards for all sub-lessees and residents. In addition, this group demanded to purchase the electricity recharge on the estate at a large discount from 1004 Estates Ltd and to resell to their fellow unsuspecting residents for a higher profit. Our rejection of this opportunistic plan immediately led to their desperate blackmail and several petitions to EKDC and NERC, purely aimed at destroying the highly efficient power system on the estate, whilst masquerading same as fighting for lower costs only after their proposal failed.”
He said by the mere “act of incorporation of this illegal eight-member association, they have continued to generate countless emails and pamphlets mostly to deceive and induce the tenants of all the other 1062 sub-lessees to pay malevolently declining and ridiculous selfdetermined service charges from our initial take off figure of N450,000 (2011) to N350,000 (2012) to N250,000 (2013) to the unfathomably inspired N15,000 monthly (payable only on the 15th day of each month in 2014 and 2015) in a clear design to deliberately orchestrate the financial collapse of the 1004 Estate Ltd, the estate service operations and the property investments of all the other1062 sub-lessees.
“Their main grouse of purported non-rendering of accounts, is clearly debunked by the annual emailed 40 page service charge report and budgets over the past four years and are also available on our website.
They then proceeded to author public caveat emptor advertisements in the national dailies with wild and noncontractual claims to all the lands in1004 Estates Ltd all in a bid to maliciously frustrate our building developments on the estates duly validly approved by the Lagos State Government without any legal or statutory rights. This arose when we rebuffed demands for free shops without any payment in the proposed building.
“Next, they privately sought a service charge rate of N1 million naira in 2014 and volunteered to in their words, ‘to be the hands that pack the shit’ to convince the residents in exchange for a 10 per cent share of the service charge. This was again was rebuffed as it was not in the interest of our other residents. Hence their desperation to decimate the service charge to N15,000 monthly and continuously blackmail the company as being unaccountable.
“However, it is to be noted that our company is regularly audited jointly by two international firms of Baker Tilly and BDO while our service charge operations are also reviewed by the renowned firm of Ernst and Young. They have continued to parade themselves as the proper party to whom the private payments and accounts of each individual flat owners’ service charge should be accounted to in complete contravention of the privacy of contract and privacy of each sub-lessee to their accounts under the sublease. The clear legal contradiction of their position is that the association is not a sub-lessee of any flat nor pays any bills and is also unable to compel the payment of any service debts of any other sub-lessee or stand as guarantor to make good any sub-lessee debts, being a stranger to the sublease. This they have also admitted in their filed defence to our case against them at the Federal High Court Lagos. So why all the malice and blackmail?
“They adopted an unconscionable strategy of openly endorsing the non-payment or under-payment of the proper service charge and encouraging numerous tenants to dump over three years service charge debts of over N2 million on other innocent landlords (usually already owed rent arrears), which has eroded their earnings. They aid and abet the criminal tampering with the electricity meters through hiring roadside external technicians by a purported Residents Power Committee which has led to fires in over 10 flats and put the lives and properties of other law abiding residents in danger. These are all driven by malevolent designs to destabilise the efficient power system and ensure financial losses to 1004 Estates Ltd operations just to cripple it.
“They threatened by letters demanding that all our four recreation club house buildings in the estate be handed over for free use as their exclusive illegal association offices and with the ultimate goal for the private use of their wives to the exclusion of all the other 1062 sub-lessees”.