ANXIETY OVER LAGOS RENT LAW
Will the new rent law in Lagos State work? This is one question that millions of Lagosians have not been able to answer since the third rent bill was signed into law recently by the state governor, Mr. Babatunde Fashola (SAN).
While many stakeholders are contending that the law will be a toothless dog, some are of the opinion that the law will achieve positive results irrespective of vehement oppositions from a lot of landlords and estate managers.
Those who don't believe in the new legislation insist that the government cannot dictate to landlords on modalities for letting out their houses to tenants. The government, according to them, did not provide affordable housing for the masses and as such cannot control what it does not own.
Determined efforts to regulate rent in the Centre of Excellence began with the first military governor of the state, Brigadier-General Mobolaji Johnson, who ruled the state from 1967 to 1975. His regime promulgated the Rent Control Edict, which operated for some time before Lagosians began to violate it with impunity.
In an interview, Johnson said: 'It was a question of trying to hold the bull by the horn. The rents were soaring; the landlords in Lagos had no alternative than to increase their rent because the demand was more than the supply.
'I wouldn't say exploiting but we had to make ends meet. We did the rent edict after a good survey from the type of houses we had in Lagos State. And we made them comply because we set up tribunals. It is not just making the law but enforcing the law. 'So, we formed these tribunals to try landlords who were not towing the line. And you could see in those days they would tell a tenant, 'do you want to rent my house or that of Mobolaji?' And they say something like 'if you want the rate of Mobolaji, then go and meet him to rent you a house.' And they tell you straight to your face. So it was a problem of demand and availability of what was being demanded.
'That is why I praised Alhaji Lateef Jakande who did so much about housing in Lagos. It may not be so modern again, but he made an effort to put accommodation over the heads of people.'
According to available records, the administration of Jakande, first civilian governor of the state from 1979 to 1983, constructed well over 20, 000 housing units in different parts of Lagos State.
In 1996, a new military governor, Brigadier-General Buba Marwa, was posted to Lagos State. He resumed work at a time when arbitrary rent increases, unlawful ejection of tenants, lengthy and unending litigation between landlords and tenants were rampant across the state. The development prompted his government to promulgate the 'Lagos State Rent Control and Recovery of Residential Premises Edict 1997.'
The edict divided Lagos into 11 zones with 12 types of variation of dwelling units. It then apportioned different rates to each of the zones. Rent for a single room apartment was pegged between N75 and N650.00.
According to the edict, it was illegal for any landlord or landlady to demand an advance payment in excess of six months for a room and parlour unit; otherwise such a landlord was liable to a three-month jail term or N30, 000.00 fine for illegal or forceful ejection of a tenant.
The edict stated that only the court could order the eviction of tenants. But court process was unusually slow and cumbersome. This made many landlords to adopt approaches such as phony legal cases, intimidation, locking out tenants, removal of roofs and physically throwing them off their properties.
The previous edicts promulgated during the administration of Mobolaji Johnson and Buba Marwa, according to Lagosians, failed because there was no agency or commission set up by the government to enforce the laws and monitor activities of landlords.
They advised Governor Fashola to set up a body that will be charged with the sole responsibility of enforcing and monitoring activities of landlords and tenants in the state. Without the agency, many tenants believe that the law will also go the way of previous ones. But they are optimistic that if the new law is properly implemented, it will be one of the best dividends of democracy to tenants in Nigeria's commercial capital.
The new law builds on existing tenancy legislation in the state, namely the Rent Control and Recovery of Residential Premises Edict of 1997, which was largely un-enforced. The bill is entitled: A bill for a law to regulate rights and obligations under tenancy agreement and the relationship between landlord and the tenant including the procedure for the recovery of premises and for other connected purposes in Lagos State.
It comprises 47 sections, which include jurisdiction of the courts, obligations of the tenant, obligations of the landlord, length of notice and services of notice.
Apart from spelling out the relationship between the landlord and tenant, the bill allocates rights and privileges to both parties. The bill states that a tenant is entitled to quiet and peaceful enjoyment of the premises, which include privacy, freedom from unreasonable disturbance, noise pollution and nuisance, as well as exclusive possession of the premises, subject to the landlord's restricted right of inspection.
The bill mandates every landlord to send a written letter to a tenant whenever he wants to visit the apartment for inspection and such letter must state the time the inspection is to be conducted. This, the bill says, will give the tenant enough time to prepare for the exercise.
Besides, the bill gives the privilege to a tenant to furnish or install accessories within a property to fit his/her taste. The legislation stipulates that it is unlawful and criminal for a landlord or his agent to demand or receive from a sitting tenant, rent in excess of six months in respect of any premises without prejudice to the nature of tenancy. It imposes a fine of N100, 000 or three years imprisonment on any landlord who collects or new tenant who pays in excess of one year. Also, it stipulates a fine of N100, 000 or three months imprisonment for any landlord who fails to issue a receipt to a tenant for payment of rent.
The bill reads in part: 'It shall be unlawful for a sitting tenant to offer or pay rent in excess of one year for a yearly tenant in respect of any premises and any person who receives or pays rent in excess of what is prescribed by the law shall be guilty of an offence and shall be liable to a fine of N100, 000.'
The bill was passed in the first instance by the House of Assembly on May 25, 2011. It was sent to Fashola for assent but the governor returned the bill to the house with recommendations on some grey areas.
He urged the lawmakers to look into areas such as who bears the professional fees incurred at the commencement of tenancy and some other sections that cover the internally generated revenue of the state.
The amended bill was passed by the House of Assembly in July and it states that the landlord would be responsible for 'professional fees or commission of the landlord's agent, consultant, solicitor or any other person acting for and on behalf of the landlord, incurred at the commencement of the tenancy.'
Meanwhile, several factors capable of obliterating the new law have been identified. A chartered accountant, Miss Tolulope Fadare, says previous efforts to regulate rent in Lagos failed woefully because the government tried to control what it did not own. Ninety per cent of housing in Lagos, according to her, is owned by private individuals. She explained that the administration of Mobolaji Johnson just woke up one day and decided to enact an edict to control rent without investing in housing.
'Do you know that there is a clause in the law? It says the law will not affect landlords and tenants in Ikeja GRA, Apapa GRA, Ikoyi and on Victoria Island. Can you imagine that kind of double standards? By and large, I am in support of the law and I want it to work. But the government needs to look into provision of affordable housing for the masses if the law will not be a toothless dog.
'The present government should not concentrate only on building houses for the super rich.; it should have the masses at heart. Another salient issue is that the government should set up a commission or agency that will be vested with powers to implement the law and monitor the activities of landlords and tenants,' Fadare said. For a Lagos-based public administrator, Mr. Gbenga Ogunleye, the legislation will be ineffective if it does not depict a win-win situation for landlords and tenants. He argues that the present law seems to favour tenants.
'It is the same government that wants to increase its Internally Generated Revenue (IGR) by making sure that each house pays land use charge. Local government areas also have their own collections from the same houses. If this law will work, the government should reduce what landlords pay on land use charge and tenement rate. They should look at the area of multiple taxation and ensure that landlords are not doubly taxed.
'Apart from setting up an agency that will monitor the implementation, the government should ensure that the moment they pay a certain amount for land use charge, it will be annual, not monthly, and no other agency should still tax the same set of people again so that with the little they collect from tenants, they will be able to run,' he says.
Ogunleye contends that as long as the government continues to invest in housing estates for the rich and does not build low cost housing estates for the masses, landlords may not respect the law.
He continues: 'In the area of awareness, let the landlord know that their properties are not being taken away from them, neither does the law only favour the tenants. Landlords should be educated that the law also protects them and the areas where they are protected. The government should make the landlords understand that the law has protected them against defaulting tenants.
'Be that as it may, I don't see 100 per cent practicability of the law in the first year of signing, but as it progresses, I opine that if all these factors are taken into consideration, the law will be effective.'
An estate surveyor and valuer, Sola Enitan, told journalists in Lagos that it may be practically impossible for the government to regulate rent because it does not control exchange rates, importation and sales of building materials.
'For the law to succeed and its enforcement to be thorough, there should be a market intervention by government in the form of developing affordable or social housing; not the kind of houses developed by the Lagos State Development and Property Company (LSDPC) for profit, where its two-bedroom flats in Ikorodu are selling for N7 million per unit,' he said. Mr. Anthony Aribisala (SAN) also said the law would make life comfortable for tenants. In England, he asserted, rents are generally one month in advance. The highest a tenant can pay in England is six months and this is backed by the law.
He said in England, the law is designed to give equal protection to both landlords and tenants. He asserted that the new rent law tends to give priority to tenants, saying the lapse could lead landlords to flout the law.
To a mass communication expert, Mr. Chris Williams, the new rent law is one of the best things that can happen to landlords in Lagos as the legislation will ensure that landlords, who live on rent alone, never get broke. But he is not too sure if the law will work. Why?
'Ninety per cent of the houses in Lagos are owned by private individuals while just 10 per cent are owned by the government,' he said.