NIGERIA: State of Lagos has instituted a law prohibiting landlords demanding several years of rent in advance from tenants

Record ID: 235361

  • Title: NIGERIA: State of Lagos has instituted a law prohibiting landlords demanding several years of rent in advance from tenants
  • Date: 16th November 2011
  • Summary: LAGOS, NIGERIA (RECENT) (REUTERS) LAGOS STATE NEW HOUSING ESTATE UNDER CONSTRUCTION BOSUN JEJE, LAGOS STATE COMMISSIONER FOR HOUSING INSPECTING CONSTRUCTION WORK (SOUNDBITE) (English) BOSUN JEJE, LAGOS STATE COMMISSIONER FOR HOUSING SAYING: "The tenants are so much under obligation, under so much under pressure to pay for so many years in advance to get a roof over their heads, and then we also look at it that the tenants have obligations towards the landlord in ensuring that he pays his rent as at when due, so it is just to harmonize relationship between the tenants and the landlords." AKINFOLARIN AYOKUNLE, LAGOS RESIDENT LOOKING FOR HOUSE TO RENT FOR SALE TO LEASE SIGN ON THE GATE OF A VACANT PROPERTY VARIOUS OF AYOKUNLE INSPECTING THE HOUSE (SOUNDBITE) (English) AKINFOLARIN AYOKUNLE, LAGOS RESIDENT SAYING: "Some of the landlords I have actually met, they still bent on the two years term, I don't think they have put it (law) into place (practice) yet, I don't really know what is going on but they are still asking for two years." LOW COST HOUSING AREA IN LAGOS DAUDA ADEYODI AND OTHER ELDERS SITTING OUTSIDE THEIR SHACK (SOUNDBITE) (Pidgin-English) DAUDA ADEYODI, LAGOS RESIDENT SAYING: "When the landlord does not agree with the law, what are you going to do? You know these landlords, if they say if you don't pay two years, he will kick you out of the house, but if the government built houses, even if the landlord threw you out, you have an option of the government houses." CHUDI MBOSI, REAL ESTATE DEVELOPER AND SURVEYOR IN HIS OFFICE (SOUNDBITE) (English) CHUDI MBOSI, REAL ESTATE DEVELOPER AND SURVEYOR SAYING: "I would have thought that these are some of the areas they should have first of all focused on, to make it a lot easier to access land, make it a lot easier to develop land, make planning approvals easy, and make it generally easy to be able to do business with the Lagos state government when it comes to land and housing issues." VARIOUS OF PROPERTY IN HIGH BROW AREAS IN LAGOS INTERIORS OF HIGH COST HOUSING (SOUNDBITE) (English) CHUDI MBOSI, REAL ESTATE DEVELOPER AND SURVEYOR SAYING: "What the law is trying to tell you, what Lagos state doesn't know is that the law is trying to tell people, is that the only places to invest today would Ikoyi, Victoria Island, and Apapa and Ikeja GRA, those are the areas where you can attract more than two, three years rent payments in advance." NEW HIGH COST BUILDING UNDER CONSTRUCTION VARIOUS OF VACANT HIGH COST HOUSING UNIT FOR RENT/SALE
  • Embargoed: 1st December 2011 12:00
  • Keywords:
  • Location: Nigeria, Nigeria
  • Country: Nigeria
  • Topics: Politics,People,Social Services / Welfare
  • Reuters ID: LVAD7SMHT62P9RB5AGV0OMEL8OBS
  • Story Text: Up to five-years rent paid in advance, that's how much landlords in Nigeria's sprawling commercial capital Lagos sometimes ask of new tenants.
    But finding good housing in Lagos is tough and finding tenants who pay monthly rent on time is an equally arduous task for property owners.
    In an effort to streamline the property market, authorities recently passed a law that prohibits home owners from demanding several years of rent in advance from prospective tenants.
    Bosun Jeje, Commissioner for Housing for Lagos state said the new housing law was not only aimed at reining in "greedy" landlords but also dealing with tenants who refuse to pay up.
    "The tenants are so much under obligation, under so much under pressure to pay for so many years in advance to get a roof over their heads, and then we also look at it that the tenants have obligations towards the landlord in ensuring that he pays his rent as at when due, so it is just to harmonize relationship between the tenants and the landlords," he said.
    Housing experts say Lagos needs over 15 million units to adequately house its teeming population expected to hit the 25 million mark in 2025.
    To deal with the growing demand, the Lagos state government has embarked on several housing projects, but critics say progress has been slow and the supply is still way below what is needed even today.
    The housing law which came into effect on August 8th this year says it is against the law for any landlord to demand advance rent in excess of one year or more than three months rent from existing tenants.
    New tenants are also obliged to pay rent for more than three months or only up to one year if asked.
    Experts say the tenant default rate in the city of Lagos is as high as 75-80 percent and many tenants have stayed on properties for several years for free.
    The courts can order the eviction of tenants but the process is slow and cumbersome and landlords often turn to an assortment of tricks, phony legal cases, intimidation or physically throwing renters out.
    Residents say however, the reality favours property owners and the law is not being adequately enforced.
    "Some of the landlords I have actually met, they still bent on the two years term, I don't think they have put it (law) into place yet, I don't really know what is going on but they are still asking for two years, I think I saw one that asked for one and a half years but..." said 26-year-old Akinfolarin Ayokunle who recently returned from America after completing his studies and getting a job in Lagos.
    Many Nigerians take loans from banks or loan-sharks to pay for the two or five years rent advance demanded by landlords or their agents.
    Even for those living in low cost housing areas like Makoko slum, scarcity of affordable housing has made the landlord king.
    Many here are calling on the government to invest in more subsidised low cost housing.
    "When the landlord does not agree with the law, what are you going to do? You know these landlords, if they say if you don't pay two years, he will kick you out of the house, but if the government built houses, even if the landlord threw you out, you have an option of the government houses," Dauda Adeyodi, a Lagos resident in Makoko said.
    Housing experts say the new law will not solve the problem long term.
    Chudi Mbosi, an estate surveyor said the state government should first deal with the high cost of land and building materials and streamline the process of acquiring and developing land which is currently time consuming and tedious.
    "I would have thought that these are some of the areas they should have first of all focused on, to make it a lot easier to access land, make it a lot easier to develop land, make planning approvals easy, and make it generally easy to be able to do business with the Lagos state government when it comes to land and housing issues," he said.
    Mbosi said that despite its lack of infrastructure, running water and electricity, parts of Lagos are the most expensive pieces of real estate on the West Coast of Africa and in these areas, the new law does not necessarily apply.
    A two bedroom flat in some locations could rent for up to 150,000 US dollars a year but they remain vacant, some for up to over a year, as most Nigerians cannot afford the high rent and landlords are unwilling to bring the price down.
    The properties are loan-free, so the owners are not under any pressure from the banks to pay up.
    "What the law is trying to tell you, what Lagos state doesn't know that the law is trying to tell people, is that the only places to invest today would be Ikoyi, Victoria Island, and Apapa and Ikeja GRA, those are the areas where you can attract more than two, three years rent payments in advance," he said.
    The practice of paying two to five years rent upfront followed the oil boom in the 90s as international oil companies competed to keep the best accommodation for their staff.
    But recent global economic downturn has forced the scaling down of international staff, leaving more property in the high-end areas vacant.
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