Megawatts Nigeria Ltd v. Registered Trustees of Gbagada Phase II Residents’ Association is a cautionary tale for residential estates and gated communities across Nigeria. In that case, the Residents’ Association requested estate dues covering security, waste management, and other community services, from Megawatts, a new resident. Megawatts refused and filed a court action to enforce its fundamental human rights to freedom of association, arguing that it was not a member of the association and provided its own services.
The court sided with Megawatts, and many assumed the company had no legal obligation to contribute. This case has often been cited by some residents as the legal basis for refusing to make financial contributions in a residential estate.
With respect, we believe the court got it wrong.
This Was Not About Freedom of Association
In our view this dispute was not about a resident being forced to join an association. That would raise legitimate human rights concerns.
In our view, the real issue was whether someone who benefits from collectively-funded services like security, power, and road maintenance, which were provided prior to that person’s decision to reside or do business in a particular estate or gated community, should be allowed to opt out of paying for them.
In our view, the principle ought to be this: When a community of homeowners or residents come together to provide essential infrastructure like security, road maintenance, waste disposal, and electricity services the state has failed to supply, every beneficiary of those services should contribute their fair share, whether or not they signed up as members. To say otherwise is to reward freeloading and punish collective responsibility.
In our view, it was not about Megawatts joining an association. It was about Megawatts taking responsibility as part of that community.
The Lagos Context
Private residential estates and gated communities have become essential to the functioning and livability of Lagos, filling gaps left by inadequate public infrastructure, and insecurity. Private estates and gated communities fund their own roads, street lighting, drainage, security and sometimes, electricity infrastructure. They hire private security to ensure safety in the face of under-resourced public policing. Often without tax reliefs. Private estates have become the backbone of urban living in Lagos, sustaining key infrastructure where government provision falls short. Without a doubt, private estates in Lagos are not a luxury. Rather, they’re a response to necessity of sustaining essential services and maintaining order.
We believe the court should have taken judicial notice of this fact, recognizing the critical role private residential estates and communities play in preserving order, safety, and quality of life in Lagos.
In such cases, our view is that, the proper judicial inquiry should focus not on whether a resident voluntarily joined an association, but rather on whether the charges are applied equitably, the services are essential and of verifiable quality, and the dues are consistent with the association’s governing framework.
In our view, the court only need to have regard to the following questions:
- Are the charges applied fairly to all residents?
- Are the services essential and of verifiable quality?
- Are the dues consistent with a publicly available constitution or framework?
- Are the charges reasonable in amount and purpose?
If the answer to these is a “yes”, the obligation to contribute should be enforceable whether or not the resident “opted in” or formally joined the Resident’s Association.
The Real Solution: Contractual Certainty Through Homeowners Associations
The Megawatts case highlights a deeper structural flaw in how many residential estates in Lagos are governed. Too often, residential estates in Lagos operate as informal Landlord-Tenant Associations, where governance is weak and obligations are unclear. These models typically struggle because landlords (property owners) and tenants (occupants) have misaligned incentives. Owners may be disengaged, while tenants have no long-term stake in community upkeep.
In our view, a more effective model is a Homeowners Association (HOA), which brings contractual clarity and legal enforceability to estate governance. Under this structure (a) Homeowners set and vote on community rules and obligations (b) Tenants are bound through tenancy agreements that incorporate estate rules and dues; and (c) Every new buyer or tenant signs a binding contract that expressly includes service charge and infrastructure contributions.
Balogun Harold insights are shared for general informational purposes only and does not constitute legal advice. For tailored guidance, please contact our Real Estate Lawyers at bhlegalsupport@balogunharold.com
