Landlords, tenants cases in court rising as economic hardship deepens
The last 24-36 months in Nigeria have seen considerable rise in court cases involving landlords and their tenants who, for reasons that are largely economic, are defaulting in their house rents payments as at when due. Analysts say this is a reflection of how deep the economy has plunged within the period.
Nigeria exited a crippling 15-month economic recession in the second quarter of 2017 (Q2 2017), but the impacts are still being felt as many people, especially those in paid employment, are still smarting from jobs losses and salary cut for those who could be considered to be lucky.
Many of the young executives who lost their jobs can no longer afford their rents. Some of those who are still at work are not sure of their salaries, leading to high rent default rate. Some of them have moved from the mid-income locations where rents ranged from N2 million to N3 million per annum for a duplex to areas where rents are relatively lower at N1million to N1.5 million per annum, yet they find it difficult to pay.
The relationship between a tenant and his landlord is generally contractual. This relationship usually doesn’t encounter problem for as long as the tenant pays his rent regularly. Most landlords are not even keen about how well the tenant is taking care of the property as long as the rent is being paid on a regular basis. But the relationship goes sour when the tenant defaults in payment of rent.
Most landlords resort to legal action to either compel the tenant to pay the rent owed or to recover his or her property. Because of the prevailing economic hardship, landlord –tenant cases in court have been on the increase in the last two years and it is not restricted to any one state. It is country-wide.
Adebayo Adedayo is a lawyer who practices in Ibadan, the Oyo State capital. According to him, “merely visiting the courts will provide an insight into the volume of tenancy cases going on in the courts; it was not this bad some years ago. I have gotten more tenancy briefs in the last one year than the three years preceding the last one year combined”.
Olumide Osunsina, CEO, Megamounds Investment, confirmed to BusinessDay in an interview that rent payment default rate has been on the rise in the last two years, blaming it on economic hardship. He revealed that in their serviced estate, County Homes in Lekki, Lagos, many of the residents were in debt of rents and service charge. Many of them have lost their jobs and have no income”, he noted.
Andrew Oke is a landlord who owns properties in Ibadan. “Some of my tenants have been finding it difficult to pay rent in the last three years”, he told BusinessDay, citing one of them particularly who stated that his reason for not paying his rent was because he lost his job. “This is a tenant that has been in the property for seven years and was paying his rent regularly until two years ago,” Oke informed.
A magistrate in Kwara State who spoke on condition of anonymity said, “tenancy cases that come before my court has multiplied in the last two years; though I cannot give exact figures, the rate of tenancy matters in my court has increased significantly compared to some years back. In Ilorin, for example, so many of the landlords are old people who depend on the rent they collect to survive”.
Continuing, he said, “tenants have been failing them and as a result, those that do not want to take laws into their hands have decided to be approaching the court; the usual excuse from tenants that are businessmen is that the economy is not favourable while the ones earning salaries do claim that they haven’t been paid for months”.
An estate manager in Ogun State also disclosed that the rate at which he goes to court to eject tenants has increased, saying, “some tenants have been owing for two to three years and yet cannot pay. Some of them claimed to have lost their jobs and as a result can’t afford to pay their rent. Due to constant harassment from the landlords, some of them have locked the house and are hanging around with family and friends; I will end up approaching the court for order to recover premises by forcing the door of the apartment open.”
In Abuja and Lagos, it is estimated that over 70 percent of civil cases in magistrate courts are tenancy matters. In Lagos, particularly where over 60 percent of the state’s 20 million residents are tenants, tenancy cases are very high. Parties are encouraged to embrace the state’s alternative dispute resolution (ADR)courts to no avail.
Raymond Ajao is a lawyer and company secretary of a company in Lagos. He told BusinessDay that the company he works for has been served with quit notice due to its inability to pay rent. “We have been paying the landlord piecemeal and the man is tired of that already. The company has been struggling to get contracts for nearly three years now. I haven’t been paid November salary and this is February”, the company secretary lamented.
CHUKA UROKO & ODUNAYO OYASIJI