Why Government can’t regulate tenancy in Nigeria

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It is a popular saying that one does not give what one does not have. This, in a sense, means that you should cut your coat according to your cloth. It also means that government will have no legal backing to regulate tenancy in Nigeria. The introduction of laws to regulate tenancy will only be on paper because any landlord who chooses to peg any rate for his property will not be stopped. The worst could be the introduction of black market in property sector.

Regulating rent is most unattainable because since the government did not build any of the houses, it will be near impossible for the same government to put a ceiling on the pricing. It is only what one can control that one can regulate. About five or six years ago, the Lagos State government promulgated laws aimed at regulating tenancy. Most experts saw the government efforts in that direction as white elephant job as no landlord will be willing to subject himself to any external regulation.

Unknown to many landlords in Lagos, the Tenancy Laws of Lagos State, which came into force on August 24, 2011, have provided a panacea for the rising cases of disputes arising from tenants’ inability to pay rents. Section 13, Subsection (1) of the Tenancy Law also prescribes the length of notice to be given where there is no agreement between the landlord and the tenant to determine the tenancy, which are; a week’s notice for a tenant at will, one month’s notice for a monthly tenant, three months’ notice for a half-yearly tenant and six months’ notice for a yearly tenant.

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However, Subsection (2) of Section 13 further provides that in the case of a monthly tenancy, where the tenant is in arrears of rent for six months, the tenancy shall lapse. In other words, there would be no need for a landlord to issue a notice to quit on the tenant; what will be issued is a seven-day notice of owner’s intention to recover possession.

The position of most property experts is that you don’t regulate what you don’t have. In the opinion of Mr. Chudi Ubosi, an estate surveyor and valuer and a Continental President of International Estate Surveyors & Valuers Federation, regulation of tenancy in the country is an unusual situation. According to him, “available statistics show that housing deficit in the country is more than what is being brandished by semi-experts. The 17 million deficit is not real and cannot be substantiated because most reliable experts are saying that by now our deficits should be about 20 million or above 22 million. 

UN statistics has it that even at 16 million deficit, for Nigeria to clear this deficit, it needs to produce at least 750,000 units of housing every year. Nigeria needs to be able to do that so that in another 20, 30, 40 years, even if that figure remains the same, it will clear the housing deficit by 15 years. Yet we have 16 million and in today’s Nigeria, production is less than 50,000 units of housing in the whole of the country. Nigeria has a situation where even with that 50,000 units of housing, a lot of them are geared towards the luxury end of the market and not towards the low income end that need the products majorly. 

There is a situation where there is enormous pressure on the existing housing stock. What that means is that demands far outweigh the supply. The implication of that is that property prices will continue to be high. If property prices are high, whether for sale or lease, government cannot regulate it. If it decides to put in regulation, what it will have is creating a black market, which means when you come to lease my house, I will give you government price to sign on the paper but under the table, I will tell you, you need to pay this extra. So these are things that experts see as basic economics that everybody should understand and appreciate. 

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Yes, government has a role to ensure that its citizens are housed but the role should focus more on creating the environment that will enable people to invest more in real estate. Reduce the bureaucracy and cost of getting get building approval; reduce the cost of getting titles to land; make it easy for people to get land without having to apply to the government for allocation, which will never come. Or you will go and buy from a family that doesn’t have title and as soon as they collect your money, the man you bought from disappears and a new set of people reappear to tell you you bought from the wrong person. So these are the dynamics of the things that concern real estate. Government’s regulation of tenancy is therefore an exercise in futility.

Going by the Lagos State Law that empowers tenancy regulation, Section 13(5) of the Tenancy Law, Chapter T1 , Vol. 10, Laws of Lagos State, 2015, allows a landlord to give a  tenant seven-day notice of intention to recover  possession as in Form TL5 in the schedule to this Law. Such law is only applicable in a tenancy, which has a fixed  term, and once a tenancy has a fixed term, it only requires seven-day notice after serving an intention to recover possession. The landlord will then file a claim in a magistrate court and the court bailiff will serve same on the tenant.

After servicing the claim, trial will begin where the tenant and the landlord are expected to adopt their written addresses before the court will give judgment on the matter. The sheriff will execute the judgment, especially when the tenure has expired or the tenants are unable to pay rents. This, she said, is different from the previous practice where the landlord is required to serve a six-month quit notice after which he starts with the seven-day notice of intention to recover possession. 

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This law is not obtainable in most other states of the federation but since it is enacted in Lagos, legal experts and experts in the real estate industry are watching to see how it would be enforced. The law is made to quicken the process in view of the court congestion and it must be on fixed tenure. Experts who studied the law and promulgated it advise landlords to have fixed tenure in their agreement to quicken the process. The law was enacted in 2011 but full compilation of all Lagos laws was done in 2015. 

Adding voice to the matter, former chairman, Nigerian Bar Association (NBA), Ikeja branch, Monday Onyekachi Ubani, had posited that the law has reduced cases of getting judgment behind the tenants as it criminalises it.

by Maduka Nweke.  Source: Sunnewsonline

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