The property market in Nigeria has been one of topsy-turvy and unpredictable. In a country of more than 200 million people, where the national minimum wage is N30, 000, 00 per month and hyper-inflation has crept in, the building construction industry is be worse hit. It was therefore not a surprise when Senator Smart Adeyemi recently presented a bill to the Senate of the National Assembly proposing to outlaw the demand by any landlord of rents in advance of more than three months from new tenants and not more than one month rent for subsisting tenants. Many Nigerians applauded this bold move. Was this applause not too early?
Some years ago, the Lagos State House of Assembly enacted a law prohibiting landlords from collecting more than a year’s rent in advance from a prospective tenant and not more than 6 months’ rent in advance from a subsisting tenant. How effective the Lagos State Rent law has been may be a subject for another day. However, the proposal before the Senate has both pros and cons from the perspectives of both the landlords and tenants.
I have had cause to do some vox pop on this issue. Tenants canvassed some reasons why they support the proposal. Their main reason is that they view the yearly rent as being exploitative because they earn monthly salaries and therefore, monthly rents would be appropriate. Landlords, on the other hand, disagree with the proposal because they view government’s interference as being unnecessary, since their relationships with their tenants are private contracts voluntarily entered into by the parties and the properties were built with no assistance from the government. They also opined that tenants are fond of accruing arrears of rents and difficulties in the recoveries and eviction. It is their view that collecting rents in advance of one or two years is a way of addressing these issues.
Frankly speaking, the high rents being charged by landlords (which are exploitative in many cases) are as a result of lack of or inadequate government policies to regulate the property market in Nigeria unlike in civilised worlds. The purpose of government is to ensure the security and welfare of its citizenry. Governments ought to be constructing low cost housing estates for the low and mid-level income earners which can be given out on a mortgage arrangement.
The average Nigerian civil servant will find it difficult to obtain a mortgage of a one bedroom apartment because government hardly reckons with them. The same estates meant for the low income earners are also surreptitiously bought by the politicians or top civil servants and later rented to the same low income earners at high rate. No one is ever sanctioned for this round-tripping.
Until the various tiers of government aggressively engage in policies that will fast-track the housing sector in Nigeria for demand and supply to meet at a comfortable point, the issue of high rent will continue to be a recurring decimal. The recovery and eviction in our courts should be addressed because it is alleged that a lot of tenants use the litigation process to frustrate legitimate attempts at recoveries and eviction by landlords. Also, the cost of building materials has skyrocket as a consequence of the free fall of the naira.
Instead of engaging in populist bills that may have any effect, the National Assembly should extend its oversight functions and address the reasons why a bag of cement in Nigeria costs twice the price in Ghana, when the raw materials are in Nigeria; why a level 9 civil servant is unable to obtain a mortgage for a one bedroom apartment but instead it is still the rich in the society that are favoured by mortgage banks; why many local governments are unable to construct low income houses which they can rent to low income earners.
