Lagos, Nigeria’s sprawling city and commercial nerve centre, is a good case study of a city where house rent situation is dire. This is a city where rent increases have become an obsession among landlords. It is the first of the top 10 African cities with the most expensive rent. Its rent index is about 21.8.
The landlords who increase their rents are, however, responding to unending demand from an expanding population and fast-paced urbanization both of which are exerting enormous pressure on the city’s infrastructure and grossly inadequate housing stock.
A report published by Pison Housing Company in 2009 estimated that over 60 percent of the Lagos population lived in rented accommodation, spending about 50 percent of their monthly income on house rent. This report is no linger tenable and the figure has shot up significantly.
A more recent report on the State of the Nigerian Real Estate Market says 80 percent of the city’s population now lives in rented accommodation, putting the city’s share of the 50 percent of Nigerians who are either homeless or live in inadequate shelter at about 20 percent.
Concerned about this housing situation, the state government came up with two separate tenancy laws which, it explained, were aimed to regulate payment of rents and, in the process, protect both the landlords and tenants from exploitation.
The laws are the Rent Control and Recovery of Premises Law of Lagos State (RPL) which is applicable in the middle and high income settlements, including Apapa, Ikeja GRA, Ikoyi and Victoria Island.
The second one is the Tenancy Law of Lagos State (TLL) which is applicable in all other parts of the city, mostly the mid-low-income settlements which constitute over 70 percent of the city. These are the areas where there are what experts call quantitative and qualitative housing deficit.
The RPL provides that landlords can only increase rent once every two years and must give their tenants a written notice, at least, six months before the expiration of the current tenancy agreement.
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It adds that when a tenant receives the landlord’s notice of intention to increase rent, he may attempt to negotiate or accept the terms or refuse the rent altogether. If he refuses the rent, the landlord may take the lawful steps to evict the tenant from the premises.
On its part, TLL states that a landlord must charge rent that is just and reasonable in line with the market value of the premises. If a tenant believes that the proposed rent increase is excessive, he may apply to the court for an order declaring that the rent increase is unreasonable.
The court is expected to consider the application and determine the case based on some factors which include general cost of rent in the locality or a similar locality; evidence of witnesses of the parties and any special circumstance relating to the premises in question.
Lagos residents, especially renters, welcomed these laws as a huge relief, hoping that it would stem the frequent rent increases by landlords which many of the tenants are unable to cope with, hence the dispute with their landlords.
Housing market analysts, however, did not clap for the government for these otherwise good and well thought out laws, noting that apart from tilting more in favour of tenants, the laws might not stand the test of time.
Over the last decade of the laws, it has been observed that they are being implemented more in principle than practice. This is because, apart from the skyrocketing increase in house rents across the state, disputes between landlords and their tenants are on the increase.
“I am not aware of any landlord who has been prosecuted and convicted in the last 10 years for increasing the rent on his house,” Mathias Ibikunle, a property broker, told BusinessDay at the weekend.
“I am, however, aware that house rents have increased by more than 100 percent at both low and highbrow locations in the state in spite of the laws,” Ibikunle added, citing Surulere, Itire, Ago Palace Way in Okota and even Ojo, each of which has seen rent increases that are unimaginable.
Like all other tenancy laws, TLL also notes that “the relationship between a landlord and a tenant is a contract that involves mutual agreement of both parties,” explaining that the terms of a tenancy agreement must be fully agreed upon by the parties involved which means that there is a rent review which spells out the method of initiating the review, in writing or orally, timeline within which rent can be reviewed and percentage of the increase.
But none of these is observed in Lagos. Sola Enitan, an estate surveyor and valuer attributes this to a number of factors. According to him, you cannot legislate on what you don’t have control over. The properties are not government’s properties. They belong to private developers,” he said.
Enitan, who is also a lawyer, noted that the tenancy laws cannot stem rent hike in Lagos and any other state for that matter because, according to him, government is not offering any alternative.
“Government cannot legislate for developers who build their houses with bank credit in which case they would like to recoup their investments in good time to avoid piling pressure and interest on the loan,” he said, adding, “laws will not work where inflation has pushed prices of building materials to the roof top and government doesn’t seem to have solution to that.”
Ibikunle agreed, pointing out that “for so long as costs continue to rise across board, landlords will continue to push up their house rents and for so long will disputes continue to arise between landlords and their tenants.
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