Monthly rental system in Lagos: How feasible

ONYEKORMAKA ASABOR writes about the proposed Lagos tenancy law, to make tenants pay rent monthly

Exactly a decade since the Lagos State Tenancy Law 2011 and State Park and Gardens Law 2011 came into effect; Lagosians have been sceptical about whether the state government is sincerely committed to the implementation of the law, which, upon its enactment, was applauded and described as one of the best people-oriented policies in the state.

Alas! Since it became law, it has made little or no impact on the lives of those who do not own properties, while privileged property owners have continued to exploit the desperation of the property seekers to their benefits.


Sanwo-Olu, Fashola concerned

Against the backdrop of the reckless manner the Lagos State Tenancy Law 2011 was being breached that not a few Lagosians reacted when the Governor, Babajide Sanwo-Olu, recently posited that “Nigeria is ripe for inclusive rental system that will reduce the housing burden on working families.”

At the 10th meeting of the National Council on Lands, Housing and Urban Development in Lagos, Sanwa-Olu said the prevailing rental model in which people pay yearly rent in advance to property owners had become inadequate to address contemporary realities in the housing sector, especially in cities where demand for properties is high. He advocated monthly rental system, which, he said, would be affordable to low- and middle-income earners who are pressured by yearly rent obligation.

The governor’s position was corroborated by the Minister of Works and Housing, Babatunde Fashola. In his submission, the minister stressed that yearly rental system had created inequality in housing supply and widened affordability gap for low-income earners.


Experts, stakeholders react

Against the foregoing development, Financial Street sought the view of Leon Mbakwe, the founder of Tenancy Watch Centre, a resource centre for indigent and downtrodden members of the society, who cannot afford legal fees in the preservation and protection of their rights in tenancy matters.

“It is great knowing that Governor Sanwo-Olu is showing that some leaders appreciate their duties of making the welfare of the people a priority. The governor’s idea of monthly tenancy is in the interest of the masses and should be commended.

“Though, this not the first time the thought came up in Lagos; it was first mooted in 2016 by the then Governor Akinwunmi Ambode. I believe the governor has the political will to bring it to reality. This is considering the political points he will score with the policy,” he said.

Accordingly to Mbakwe, it is not enough to consolidate and legalise the great idea, the government should also consider the factors that militate against the full impact of the previous legislations on the matter. There are inadequate houses in the state, where the law of demand and supply is at war with the legislation, he noted.

He urged the government to engage in massive housing projects to provide alternatives and justification of the law.

Also, he canvassed the regulating of housing agents, who, sometimes, encourage the breach of extant laws on the subject and charge exorbitantly.

His words, “There should be government machinery to monitor compliance, abuse, breach and prevalence. No matter how good a law is, without enforcement it won’t worth more than the paper on which it is written.”

For Mbakwe, there may be need for special tribunal to adjudicate over matters arising from the law timeously, as a situation where cases last more than one month will not encourage people to seek enforcement through the courts.

Reacting to the proposal by the minister, on the social media platform of Housing Development Advocacy Network, the Managing Director, Ace Hi-Teck Construction Company Limited, Okupe Adewunmi, is of the opinion that when government compels monthly rent payment by tenants, it would discourage investment in real estate.

Besides, he said that the landlord who borrowed money from the bank to build the house might find it difficult to repay through monthly payment of rent.

“When tenants pay monthly, we have further reduction in housing provision because the landlord has no incentive or part capital to start a new one. That is even if he has not borrowed to build the house,” he said.

The President, Real Estate Developers’ Association of Nigeria, Rev. Ugochukwu Chime, raised posers on why the government, which wants to legislate monthly rent payment, failed to control cost of building materials.

He said, “Why not build more houses and allow the laws of supply and demand to apply? Are you controlling the cost of other commodities in the market? Why not reduce the transaction cost and fees charged on the value chain of housing development? Why not remove or reduce the cost of planning approval and title perfection and transfer costs? Why not reduce or remove the multiple taxation and the very brutal and scary means of enforcing them?

“Why not assist in domesticating the foreclosure law, to give comfort to landlords and investors in the real estate sector? Why not start by asking the public organisations like Federal Housing Authority and the various housing/property development corporations to lead the way?”

Chime said why were the government Ministries, Departments and Agencies involved in the housing sector allowed since 1992 to migrate from affordable/social housing projects, for which they were created, to agents of home ownership/investment for the bourgeoisie?

He also wondered why government was not creating and enhancing the operating environment for the private sector investors to see the sector as a destination of choice “Why are we scaring investors from Nigeria with the much undefined transaction roadmap and emotional/populist/propaganda agenda as a policy of governance?”

Mr. Alex Ogierakhi, an estate agent based in Mowe, Ogun State, said, “I also operate in Lagos, and deal with some of the landlords in the course of my business. The truth is that nobody, even government, can dictate to Lagos landlords the terms to be agreed with their existing and potential tenants.

“That is why the law the government made in 2011 did not work. Another thing is that some of the tenants are usually very desperate and ready to pay any amount and abide by any condition given to them by the landlord.”

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