…Housing experts weigh options
By Olakunle Olafioye
Lagos tenants are keenly watching and waiting for the outcome of the proposed review of the state’s Tenancy Law.
The Special Adviser (Housing) to the Lagos State Real Estate Regulatory Authority, Barakat Bakare, during a television interview on TVC last week dropped the hint about the imminent review of the law, which analysts say has been serially observed in breach since it came into operation, with the state government allegedly looking the other way.
The law, which regulates the relationships between landlords and tenants in the state, spells out the rights, responsibilities and the procedures for settling disputes between both parties, they insisted, cannot be said to have helped in addressing the issue of exploitation in the state.
In particular, the law, analysts pointed out, has failed in tackling the problem of exploitation of tenants in the state as many house owners demand throat-cutting rents from their tenants, blaming the situation on economic reasons.
In general, a common guideline suggests that people should allocate no more than 30 per cent of their income to rent.
In Lagos, however, according to a 2016 report by Euromonitor International, what an average household spends on housing and transport in Lagos was 71 per cent higher than the rest of the country.
The report clearly maintained that housing alone in Lagos, accounted for over 74 per cent greater household expenditure compared to the rest of the country.
This figure confirms the rating of the state as the first of the top 10 African cities with the most expensive rent with a rent index of 21.8.
An economist, Mr Adebowale Kehinde, described the situation as economically unhealthy for tenants in Lagos State, saying that allocating more than two-thirds of ones’ earnings to rent is a recipe for disaster in the family.
“The highest anyone should ever be prepared in the worst case scenario should not exceed 30 per cent. Any tenant who goes beyond this threshold, in my view, is courting a disaster in his family.
“Once your landlord increases your rent above 30 per cent of your income the wise step to take is to look for another accommodation,” Adebowale advised.
As valid as Adebowale’s suggestion may appear, there are, however, those who insisted that paying above the 30 per cent income threshold may not be entirely out of place after all, especially for those who settle for more expensive accommodation if they consider it more expedient.
Perhaps, there is an unwritten agreement which dictates that houses in locations closer to businesses, offices, industrial areas and people’s work settings should be priced much higher than those located far away from these areas.
Mr Fasasi Olalekan, a resident of Ogba area of Lagos, who works at Ikeja, said that he chose to settle at Ogba where house rent is relatively higher compared to places like Ibafo, Akute and their environs because, saying that it makes more economic sense in the long run.
“For me, higher rent, relatively lower cost of transportation to and from my office and less stress, is better than looking for cheaper accommodation in far-flung locations, where I might have to spend more than double of my rent on fare alone.
“No matter how you view it those who live closer to their work places and pay higher rent are more at advantage than those who live remotely from their offices because they end up spending more when you calculate their gross spendings on rent and transportation; the major difference is that the former is spared of the stress of commuting long distance between their offices and homes with the attendant chaotic traffic situation in a state such as Lagos,” Fasasi noted.
Fasasi and Adebowale are of the opinion that the Lagos State government still needs to do more to stem the escalating costs of accommodation in the state and save tenants in the state from shylock and exploitative landlords.
Fasasi opined that while the government claimed that the Lagos Tenancy Law is meant to protect both the landlords and tenants in the state, the indiscriminate manner in which house-owners raise their rent and the frequency of such hikes is an indication that the government needs to do more to protect tenants in the state.
“Some landlords are exploiting the lacuna in the law and the government’s passivity in implementing the tenancy law. Although the law is clear on the time span within which a landlord may increase a tenant’s rent, lack of clear provision of the maximum percentage the increment – a price ceiling of sort – could be seen by most landlords to raise the rent payable by their tenants arbitrarily. Or how do you justify a situation where a landlord raises his tenants’ rents by almost 60 to 100 per cent?” he asked.
Corroborating this, Adebowale said that lack of an explicit clause on percentage of rent to be charged as increase from a sitting tenant is responsible for the mindless exploitation of most tenants by their landlords in Lagos State.
The government should have at least clearly stated the benchmark of what a landlord can demand from a tenant while reviewing his or rent within the stipulated period, he said.
“What is on ground in the state as far as my knowledge of the Lagos Tenancy Law is concerned is that the landlord is at liberty to raise his tenant’s rents the way he deems fit. That is why your landlord can call on you at any time to inform you that your rent has been increased from N500, 000 to N1, 000, 000 without even considering whether you can afford it or not. This is an area the government should look into while reviewing the tenancy law in the state,” he said.
But an estate surveyor and valuer, Kingsley Obolo said regulating rent in the state would be a herculean task for the government in a country like Nigeria owing to a number of factors.
He identified economic factors such as inflation, market forces, exclusion of some areas of the state from the law among other factors, as reasons he thinks fixing rent was beyond the powers of the government.
“It is incorrect to expect the government to fix rent in a country where the cost of building materials is always on the rise. When the law was passed over a decade ago, a bag of cement was around N1,000. The same bag of cement is a little over N10,000 now. Granted that a good number of houses that exist now were built many years ago when prices of building materials were not as high as we have them now, there are quite a number of new structures built at a time when the costs of these materials had soared abnormally. So, how does the government come up with what the rent to be charged in these situations?
“The government in 2021 mooted an idea of initiating a monthly house rent, but it appears that the scheme announced over three or four years ago to ease the burden of yearly rent payment in the state has been abandoned. This explains why it is almost impossible for the government to dabble into the fixing of rent in privately-owned houses in the state,” he noted.