The hopes of many Lagos residents on the controversial Tenancy Bill could soon be dashed, as a review could be coming barely a month after the bill was signed into law by the state government.
New developments have shown that the government could be rushing to the review table, in a bid to address the complaints raised by the public, on some sections of the law.
Speaking at a recent Business Luncheon organised by the State Chapter of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), the State Attorney General, Ade Ipaye, said the amendments could be coming from the government, anytime soon.
Though Mr Ipaye did not specify the time for the review, such amendments could see the exclusion of commercial properties from the tenancy law, as the comments and propositions made at the debate largely suggested.
Romancing the Tenancy Law
A spare parts dealer, Immanuel Duru, who was “very happy” with the controversial law said that “for the first time,” he was looking forward to paying his next house and shop rents.
Prior to the Tenancy Law which seeks to regulate relationships between tenants and property owners; sitting tenants were expected to pay a year rent, and two year rent or more for new tenants.
Tenants are therefore kicking against any review that will have them pay property-owners more than a year rent and six month rent for new and sitting tenants, respectively, as specified in the new law.
The Tenancy Law also forbids both property owners and tenants from carrying out transactions contrary to its provisions, and also allows the government to fine or jail defaulters.
The most receptive group of the populace to the new law has, so far, been the tenants.
Mr Duru argued that the old system was ridiculous, as it expected people earning daily and monthly incomes to pay rents in excess of one month.
“Asking tenants to now pay six month rent is not even the best, but it is much better than what we used to have. The Tenancy Law has improved the system as it is, and we don’t want it to change again and put much financial burden on tenants, whether commercial or residential,” he said.
Mr Duru said any upward review of the provisions of the law will, once more, affect family finances and cause tenants to default on the payment of rents.
He said “tenants will begin to owe their rents and many residents will also begin to find it hard to pay their children’s school fees, take care of the home and have any savings.”
The hint at a likely review of the tenancy law has also brought government’s commitment under increased public scrutiny.
Some residents have expressed their doubts, especially with the controversial exclusion of certain prime areas of the state like Apapa, Ikeja GRA, Ikoyi and Victoria Island from the scope of the law.
Some residents have also argued that such exemption was calculated to protect some government officials and their cronies who own property in those areas.
A resident, Felix Uche said the law will enjoy a better footing with the public eye and stand a better chance of being effective, if it can be reviewed to have blanket coverage on all property in the state, in spite of the area.
“Why choose some areas and leave some areas out?” he asked. “Let them do it everywhere so that it will work.”
Property experts at the event argued that the inclusion of commercial properties in the law removes the security of tenure usually attached to commercial leases.
During the interactive session, FIABCI-Nigeria (International Real Estate Federation-Nigeria) president, Kola Akomolede, said the inclusion of commercial properties in the law will compound the madness in the state’s commercial real estate.
Mr Akomolede explained that corporate tenants like banks and telecoms companies often offer to pay five year rent or more in advance, for the security of tenure and to carry out renovations on such property.
‘Jumping the gun’
However, there are groups of residents like, property owners and real estate developers who are eager for a review of the Tenancy Law.
For instance, these categories of residents have warned that the law will have counter-productive effects on the real estate industry, and particularly affect low-income earners’ accessibility to housing in the state.
In his address, NIESV state branch chairperson, Olusola Fatoki, said the “law may further worsen the situation for the low income earners which the law wanted to protect.” Mr Fatoki stressed the importance of housing supply to the success of the law and based his submission on the state government’s poor performance in providing low cost housing for the public.
A Real Estate Consultant, Rotimi Idowu also described the introduction of the Tenancy Law as “putting the cart before the horse,” saying a review of the tenancy law would eventually become inevitable.
He said it was “virtually impossible to create an island of socialism in an atmosphere of acute capitalism.”
Mr Idowu said the law will discourage real estate investments and create “a black market in the building industry”, if the indices shooting up the cost of construction are not restrained.
“If the cost of investment is not controlled, government will have to prosecute so many people. For example, taxes, 30% interest rate on bank loans, high cost of building materials should first be reviewed or else, investors will shy away from investing in the property business,” he said.
Aside from checking the high cost of building construction in the state, Mr Idowu said the government will have to provide more housing units, for the law to be effective in the state.
But the provision of low cost housing units is still a challenge for the state as stated by Mr Ipaye, who added that the government is alternatively working on a comprehensive mortgage scheme to make more residents home owners.
Admitting that the Law cannot solve all the challenges of the landlord-tenant relationship in the state, Mr Ipaye however, described it as a right move “to strike a balance between the competing and sometimes conflicting interests of the landlord and the tenant”.
“The law protects the landlord against troublesome, sit tight tenants; it also protects the tenant from unreasonable demands by some landlords,” said Mr Ipaye.