Tenancy Laws and Housing Deficits in Nigeria…
As some of you probably know I have written about Solving Housing Problems in Nigeria. Here and here are where I started from.
I’d like to start this piece by this telling you the story of Mr. Abasido Omorapala (not real name) who built a house and rented it out because he lives abroad. Years down the line, he decided to return home and was looking at occupying his own house. He was confused about how to tell his tenant he now has a need for his property and so he decided to seek opinion on a social media platform.
Below is the message from Mr. Omorapala:
I want to give an eviction notice to my tenant who is renting a bungalow from me this month. I want to recover the house for personal use in a few months. I envisage he might resist the move. It’s a residential house currently occupied by a family of 6. I did mention it to him verbally last year.
Does anyone know what the Nigerian Tenancy law says about eviction notices –
1. How many months notice am I required to give a tenant?
2. Is he required to pay me rents during the period?
3. Can I simply evict him at the end of this year’s agreement (February)
4. What actions he might take if he feels aggrieved (petition right groups/ govt, court injunctions, etc)?
5. What loopholes do tenants usually explore in the law that I need to watch out for?
I will appreciate we focus on the issues on the thread. I do not want to break the law or get locked in a lengthy court battle especially.
The next two quotes will be the responses he got from different ‘well meaning’ Nigerians.
Response 1:
I personally think you are a wicked man and deserve no mercy. For no good reason you want to evict the poor man when he has not even defaulted payment just because someone is offering you higher. Well sorry to tell you that the least you will give him is 6 months after expiration of his agreement and then he will take you to rent tribunal where it will be discovered he hasn’t defaulted because everything is in his favour and then the court adjournment will give him another one year in court without rent and you will be found wanting, then he will sue you for damages and spend five years in the house making it six years with no rent for you. This is my prayer for you wicked soul!!!
This second response is a follow up on the house owner’s reaction to the response above. Enjoy:
Stop abusing the young man. He is telling you the real fact. Landlords/landladies in Lagos State in connivance with greedy agents are capitalizing on the scarcity/high cost of housing in Lagos State to punish the poor masses. This January alone I have spent close to One Million Naira on rent renewal because of the same flimsy reason you are giving, later you and your agent will look for a higher bidder to give the same house you claimed you were going to sell or renovate. I will advise you to do what is right. Money is not everything. The man’s prayer can put you in a serious trouble if all the excuses you are giving are later found to be false. Have a rethink please.
Here is another response:
Don’t just go to any lawyer because of this. In the court, they will only complicate things for you as the judge will keep on adjourning the case; meanwhile the tenant would be using free months rents after the supposed 6 months notice you issued all these while. Reasons being that you will not be the only client for the lawyer as the tenant would also be ‘bribing’ him. But if you have a personal lawyer in conjunction with Mobile Police (MoPol) officers at your services, you will only issue a month’s notice to the tenant. If by then he still refuses to leave, then his properties will be evacuated by the Police officer and will be given as auction in the courts of law.
And the last one:
I just want to contribute to this thread. It may be easy for the tenant to manipulate the lapses in our judicial system to his advantage in Lagos State, it is not applicable in Port-Harcourt, where the Landlords promulgate his own law and method of tenant’s eviction. The tenancy law compels landlord to give a yearly tenant, 6-month written notice to be served on the tenant exactly on the 6th month prior to the expiration of his current yearly rent. If you as a landlord should miss the chance to do so, you have lost the opportunity to serve your tenant eviction notice. What landlords of a particular ethnicity in Port-Harcourt do is to forcefully eject tenant without regard to the law existing between landlord and tenant. If your situation falls within the ambient of the law as stipulated above, just proceed to serve your tenant quit notice, if you genuinely wish to repossess your property.
Clearly, from all the above responses, you can see where the problems reside. Our Laws!!! It is not in anyway encouraging for investors (whether local or foreign) to put their money in an economy knowing that their investment is at risk when there is a need for repossession. Apart from the fact that there is no uniformity and binding tenancy and eviction laws across the country, the existing ones in different states still miss the point of creating an enabling environment for investor willing to investment in our Housing sector.
According to the Doing Business in 2016 report, there are 23 procedures taking an average of 447 days and account for 62 percent of the claims to be received in enforcing contracts in Nigeria. In addition to warped eviction legal regime, there is the foreclosure laws that is practically nonexistent. This is the of the major reasons we cannot see significant improvement in Housing from the private sector. How will an investor or mortgage finance institution be comfortable when that they cannot take possession of their collateral and recover their loans/investment as quickly as possible? Some investors or Landlords are even happy to endure the lengthy legal processes but they must have confidence that the laws will be applied fairly and in a transparent manner.
We need to urgently overhaul our laws and judicial process such we can establish investor confidence that contracts signed in Nigeria will be respected with fairness to all the parties involved. Also there are evidences from other countries that have shown that implementing “non-judicial foreclosure and repossession” used solely for mortgage contracts is a necessity to create a secondary market.
Also, tenants believe that Landlords in conjunction with their agents are out to milk them dry because they are renting properties from them. Even though Lagos State Government (LASG) tried to address this through the new Lagos Tenancy Bill (2011) with the majority of the population renting and low regulatory monitoring regarding rentals, landlords and estate agents still dictate the market. A major expense the the law has not been able govern is the agency fees. Currently in Lagos state, tenants pay as high as 20 percent(agency and agreement) and in most cases it is charged on two years’ rent even if you’re paying for one year. When compared with other parts of Africa, agency fees in Nigeria remains the highest — Ghana (5 percent), Kenya (1.25 percent) and South Africa (about 8 percent).
The only solution to the housing deficit and affordability is SUPPLY. Rent as continued to increase because there is high demand for the available inadequate houses in major urban centers in the country especially Lagos and Abuja. If the government is serious about reducing housing deficits in Nigeria, it has to create the enabling environment for private sector participation so that more people like Mr. Omorapala can have confidence in the system.
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‘Bisi Ogunwale is an Infrastructure Finance professional, an agroprenuer and wannabe photographer. He tweets at: @bisiogunwale
This opinion piece is the third in a three-part series that hopes to steer the current housing deficit debate as towards a focus on addressing the issues hindering the the growth of housing stocks in Nigeria. The author hopes that those concerned and relevant authorities will read these pieces and start the process of moving the country in the direction of genuinely reducing the housing deficits.
