LANDLORDS, TENANTS AND LAGOS TENANCY LAW

The Lagos State government recently spared a thought for the accommodation problem in Lagos. The House of Assembly dutifully considered and passed into law a bill that sets out tenancy conditions, especially with regard to payment of financial considerations for accommodation.

That bill, which has been well received by tenants in the state, is regarded in many quarters as unduly favourable to tenants and against the interest of landlords who have invested so much money on their properties.

The bill tagged 'A Bill to Regulate Rights and Obligations Under Tenancy Agreement and the Relationship Between Landlords and Tenants including the Procedure for Recovery of Property and for Other Connected Purposes in Lagos State', came into force in August after it was signed into law by Governor Babatunde Fashola.

It seeks, amongst other things, to put an end to the collection of upfront rent for two years or more from tenants before apartments are let out to them in Lagos State. It criminalizes collection of more than one year rent by landlords, and payment of the same by tenants. Violation of this provision attracts a fine of N100,000 or three years imprisonment. In addition, landlords are mandated to issue receipts to tenants for any payments made, failure to do which attracts N10,000 fine payable to the court.

Also, landlords must not collect more than six months from a sitting tenant in respect of any premises, without prejudice to the nature of the tenancy. This is targeted at stopping landlords from the practice of insisting of collecting one-year rent from sitting tenants. Reports say forcible ejection of a tenant by a landlord attracts six months jail or N250,000 fine.

The tenancy law, which has 47 sections covering jurisdiction of the courts, obligations of tenants and landlords, length of notice and serving of notices amongst others, also says a landlord must give a written notice to the tenant whenever he needs to inspect the premises that has been let out to a tenant.

Reactions to this law have differed depending who is reacting. While tenants like the provision on one-year rent only for new tenants and six months for old, landlords who are always eager to quickly recover their investments in houses are not very happy with this provision.

Tenants have also expressed dissatisfaction with what they term the silence of the legislation on Rent Control. Although the law does not say rents are deregulated, it, at the same time, does not say anything about rent control and standard and lawful rents. It however, provides that 'subject to any agreement to the contrary, an existing tenant may apply to the court for an order declaring that the increase on his rent is 'unreasonable'.

One provision that does not favour tenants who pay monthly is the provision of 12(2) which provides that an accommodation can be recovered from a tenant who does not pay his rent for three months on the order of possession by a court, which shall also make order for payment of the owed arrears, upon proof of arrears by the landlord.

This provision favours landlords who are also sometimes victims of tenants who refuse to either pay or move out of rented premises, banking on long litigation processes that could keep them in the rented premises for as long as five to ten years without paying before they are ordered out by the courts.

All in all, the Lagos tenancy law is one legislation that has aptly demonstrated the government's concern on the accommodation challenge in Lagos.

Lagos, alongside Abuja and Port Harcourt are nightmares for tenants, especially the low-income earners. The cost of accommodation is high, going for as high as N300,000 to N500,000 per annum for three-bedroom flats in centrally located, accessible parts of the city like Surulere, Yaba, Ebute-Metta. Landlords, most times, take no less than two years rent, meaning that a man who cannot pay more than half a million naira for two years cannot rent a three bedroom flat in these areas because agency fees, damages and Agreement Fees to lawyers, which are quite high are added to the rent to be paid by tenants under the old regime.

Single room apartments for low-income earners are also expensive. Prospects of getting any accommodation at all by people on the lower rungs of the economic ladder are bleak, as they often find it difficult to pay two years rent upfront. Getting accommodation in highbrow areas of Victoria Island, Ikoyi, Ikeja GRA, etc is of, course, a restricted to the 'big boys' and 'big girls'. These areas are reportedly not covered by the new law because players in the areas have higher bargaining power.

Lagos is right to intervene in the accommodation problem in Lagos. It is proper that the government shows interest in problems experienced by people living in it.

However, there have been misgivings on both sides on this law. Landlords in particular feel that the law is against them at it appears to want to stop them from reaping bountifully from their investments. Some have even asked why government should regulate conditions under which landlords rent out houses built with personal funds.

It remains to be seen how effective this law will be, however. This is because of the perennial shortage of accommodation in the city. It is an economic reality that where there is scarcity of a product, in this case, accommodation, its price will not only be high, it will be difficult to negotiate or regulate the terms under which it is bought and sold.

For the Lagos State government to address the housing shortage in Lagos, the governor will have to prioritise public housing delivery. The Lagos State government under Lateef Jakande in the past prioritized housing and the results are the many low-cost housing estates in Lagos State today. If government can go into low-cost housing construction for sale at reasonable prices that can be paid instalmentally, and the government also encourages private investment in housing construction, cost of accommodation will go down. Making housing construction attractive will attract more people into it as a business and the availability of more houses will automatically bring down rents, as supply will eventually outstrip demand for accommodation.

But, where housing construction is made unattractive by a plethora of levies, as in Lagos where people pay through their noses for building approval, Certificate of Occupancy, land use charge and a host of others, then it will become a very unattractive business. Some potential builders recently cried out over a N2 million levy on anyone wishing to construct a building of four flats in Lagos. Policies such as this can only discourage housing development.

The Federal Government also has a role to play in making cement available at an affordable rate. With prices of cement current at about N3,000 per bag and Lagos' population increasing everyday, there is no arguing the fact that the cost of accommodation in Lagos will continue to rise, tenancy law or not. The challenge before all tiers of government is to design policies to make more houses available to the people.

Luckily, Governor has Fashola has promised to unveil his plan on housing delivery by the end of September. If well conceived and implemented, it should be able to resolve the persistent accommodation imbroglio in Lagos.