₦airaland Forum

• May Worsen Tenant-Landlord Relationship

• Property To Remain Unoccupied Longer

• Experts Propose Monthly Rent Payment

• Say Pandemic Doesn’t Stop Impending Eviction Of Any Tenant

There are strong indications that next year might not be rosy for many tenants in Nigeria, as the impact of the COVID-19 pandemic begins to manifest economically, possibly resulting in a strained relationship between landlords and tenants due to the inability of some tenants to renew their rents promptly upon expiration.

The case of one Amos Ibeh is a pointer to what could be in the offing for some tenants. But for his university contemporaries who rallied to raise the sum of N350, 000 for the rent renewal, Ibeh, whose income was adversely affected by COVID-19 lockdown, would have been thrown out of his two-bedroom apartment in Lagos last month.

The father of two, an Information Technology (IT) consultant, was issued a notice to give up possession of his apartment in Alasia area of Lagos State due to his inability to renew his rent since April 12. It was either Ibeh paid his rent by August 12, which, of course, wasn’t possible even four days to the expiration of the final notice, or he vacated the property.

The Computer Science graduate of Nnamdi Azikiwe University, Awka in Anambra State, was on the verge of being evicted when his friend and coursemate rallied other alumni to come to his rescue.

He is certainly not alone in this, as there are many other Nigerians suffering the same fate due to COVID-19, and more would still go through this rough patch in the coming months and next year, except the economy picks up or a flexible payment plan is agreed upon between the tenants and landlords.

The Guardian’s investigation revealed that next year would witness a number of disagreements between tenants and landlords over rents default, resulting in possible legal battles and evictions.

Some experts said the looming battles might necessitate government intervention, especially with regard to a review of rent duration or requesting landlords to accept payments in installments.

A real estate practitioner and Chairman of Royal Institution of Chartered Surveyors (RICS) Nigeria Group, Mr. Gbenga Ismail, said the impact of COVID-19 on real estate would be felt later, because of the tenancy/rent structure of the sector, adding that unlike what obtains in the United Kingdom (UK) and the United States, for instance, where rents are renewed on a monthly or quarterly basis, Nigeria might not feel the pressure now, as most of the middle-class pay rents yearly.

Ismail said most people that have either lost their jobs or whose salaries were/are slashed are likely to have paid their rents in advance before the pandemic and that could still ease the tension at the moment, at least, till the end of the year.

“By the period of the lockdown, you may not feel anything, but by the third or fourth quarter

of the year, you start feeling it. Then, we will see how it has affected Nigeria, as people might not be able to pay rents or buy houses as planned.

“We are not sure of where the monetary issues are going now and if lending continues into the real estate sector. Even in inventories, where developers have put houses out for rent, the concern is, who is going to rent them? Before COVID-19, we waited six months before houses got rented or leased, but now, it may not be less than 12 months. The immediate impact would soon start to reveal itself,” he stated.

Ismail further said tenants are likely to plead for a moratorium, as businesses have been adversely affected and some might have lost their jobs, adding: “Those who have mortgages and possibly in the risk areas of losing their jobs will definitely have discussions with their lenders if that happens.

“I think the mortgage firms have to listen and think of how to help them because the COVID-19 situation is a force majeure nobody expected and people are being forced to make decisions they did not plan to make.”

According to the Lagos Chamber of Commerce and Industry’s (LCCI) comment on the Q2-2020 GDP report released by the National Bureau of Statistics (NBS), the performance of the real estate sector had been weak even before the pandemic and entered into recession in Q3-2019 due to fragile macroeconomic conditions and weak demand for commercial real estate assets, coupled with a low level of investment in the sector.

LCCI noted that the sector contracted by 21.99 per cent in Q2-2020, but COVID-19-induced lockdown and social distancing rules made it difficult for real estate players to interact and transact with clients; hence the suspension of most real estate, which would be worst if the government refuses to fully re-open the country for business.

Corroborating these assertions, some lawyers have equally warned of looming evictions next year, adding that the real pressure would start to build up in the last quarter of this year, as the numbers of tenants in rental arrears have skyrocketed.

Principal Partner of Emeka Ndukwe and Co., a real estate developer, Mr. Emeka Ndukwe (SAN), stated that COVID-19 shouldn’t be the reason for non-payment of rents, saying landlords also need their money to feed, especially for those that depend on their rent for upkeep.

He said the only thing that could be done in the present situation is for a tenant who is unable to renew his/her rent upon expiration to enter into an understanding with his/her landlord to allow him/her some time to pay up, saying:

“There is no doubt that a number of tenants will find it difficult to pay rent in advance, as they used to, following the state of affairs in the country, but we can advise our clients to be lenient with such people, especially those whose rent expired during the lockdown.

“But for those whose rents were due for payment since last year or before the lockdown, they do not have any excuse and they can be issued with a notice to quit if our client (landlord) decides so because they have contravened their tenancy obligations.”

“COVID-19 doesn’t stop the impending eviction of any tenant, but we advise the renters to discuss with their landlords to avert the predicament next year.”

Ndukwe noted that the pandemic does not stop the recovering property from a rent defaulter, saying the process would be on and the court is ready to act in favour of the landlords, as some of them depend on the rent for maintenance.

The Guardian learned that the lockdown of some sectors of the economy, which resulted in salary cuts, job losses, business failures, and indefinite leave without pay, among others, are major reasons next year could be difficult for many renters and even purchase-to-rent developers in the country. Those who depend on daily income would be the worst hit and only the government’s timely intervention could avert the looming rent crisis.

Proprietor of Childville Nursery and Primary School in Festac, Lagos, Mrs. Grace Balogun, said teachers and businessmen are currently counting their losses as the year winds down, as their earnings were put on hold since March when schools were closed, making it impossible for renters to garner enough resources to foot their bills, as their savings became the means of sustenance during the lockdown.

“Across Nigeria, the relationships between landlords and tenants in the privately-rented apartments are sure to be under severe strain, as many tenants would hardly afford to pay their rents, and this would escalate next year due to the impact of the pandemic in the country,” she added.

Newly married Bola Osundare, who lost his hotel job during the lockdown, is facing a crisis already and doesn’t know where his next rent would come from. He stated: “I live with my siblings in Igando area of Lagos and I usually pay my rent on a yearly or six months advance basis. But as it stands now, I won’t be able to pay such a huge amount of money on rent.

“I wish my landlady would accept monthly or bi-monthly rent, for that is what I can afford now. I don’t have savings anywhere, as I have exhausted my savings on feeding and hospital bills. My wife put to bed through Caesarian Section (CS) not long ago and I had to borrow money to offset my bills, buy drugs, feed the baby and do other things on a regular basis.

“So, it is God that will see me through next year’s rent. My rent will be due on the last day of February next year, but I don’t know where the money would come from unless I get a new job.

“I just can’t afford six months’ rent now; I pay N250, 000 per year or N125, 000 for six months. I have other pressing needs. It’s going to be difficult next year, except God intervenes.”

Also, Akpewe Jonathan, a club attendant, said the long closure of nightclubs and bars across the country has shut down his hope of a better tomorrow.

Akpewe, 27, shares a one-room apartment with a colleague at Ikeja, Lagos, and depends on proceeds from his services at the club to make ends meet. Now, he is greatly troubled about his fate, should club activities remain shut any longer, adding: “Savings is impossible nowadays; everything is expensive. You don’t even have enough, not to think of saving for rent. Well, when I get to that bridge, I will cross it.”

Renowned real estate practitioner and Chief Executive Officer, M.I. Okoro and Associates Real Estate, Dr. M I. Okoro, said landlords would definitely fight with tenants over non-renewal of rent next year and good tenants might succeed in prevailing on their landlords and retain their apartments.

“In light of next year’s harsher cash flow that would hit the real estate industry, no reasonable landlord or agent will throw out good tenants that pay their rents regularly and as when due from their houses. But if you are a troublesome type who fights before paying your rent, then it is time to throw you out of the property,” he said.

Okoro insisted that next year is going to be tough, but wished harsher cash flow would not happen as predicted, saying the situation could be averted if Nigerian leaders at the federal and state levels show concern and appeal to the landlords on behalf of cash-strapped tenants.

“If governors appeal to the landlords to allow these tenants some time, this trouble would have been nipped in the bud. If they appeal to landlords to allow renters some six months or even 12 months' grace to pay their rent, it will help to avert the foreseen crisis.

“Of course, nobody is saying debt cancellation, they owe, so they will pay later, but this is just to cushion the effect of COVID-19 on them. If such happens, there is no landlord or agent that will go against his plea.”

To avert this squabble, he said the government should open up the market fully and stop the ‘one day on, one day off’ strategy, as nobody has died in the markets since this shift started.

“If the government opens up the economy fully and allows traders to resume fully, the harsher cash flow will not happen. Business works in chains; if traders don’t sell, it affects the banks and other small businesses.

“I believe that if offices resume fully and salaries are paid, tenants will be able to make money and pay their rents and there will not be a problem in the future. This is the way to go to avert this. The real estate business is weak since pandemic; everything is put on hold and this is the most dangerous part of it.”

Some list other ways of averting the looming crisis to include advising tenants who may be unable to meet up with their rent obligations to discuss with their landlords to avoid eviction.

blowjohn:
Nice

Wow FTC!

I shout it again!!!!!!!
FTC!!!!

Wow!

Xstremebj:
Be calming down ehnnn

Abalado:
This Dec self go get as e go be,, because Covic one nine has done damage to many things,but they yeye leaders care not ,,,no landlord can disturb me by next year I swear,bcs ago ask am if him no they Nigeria

kherlly:
Hmmm his case was like mine o... My rent never expire but landlord gave me a week notice but since I have no option and a colleague advice me against going to court cos I was cashless... I rally round to pay part still owing him still.

blowjohn:
Nice

Wow FTC!

I shout it again!!!!!!!
FTC!!!!

Wow!