Stakeholders have identified flaws in the provisions of the newly proposed Lagos State Tenancy Bill currently before the State House of assembly awaiting passage into law.
At a stakeholdersâ€™ forum organised by the Lagos Chamber of Commerce and Industry (LCCI) Thursday last week to sensitise and enlighten the public on the provisions of the draft bill, speakers were almost unanimous in declaring that the bill may not be enforceable in its present form.
President Landlords and Tenants Rights Initiative, Barrister Valentino Buoro, noted that the bill, among other things, is a move from rent control to deregulation of rents in the state. â€œEven though the bill did not at any point expressly state that rents have been deregulated, it is clear both in law and in fact that the absence of Rent Control in the proposed title of the law and the total exclusion of stated standard or lawful rents scream deregulation in all its ramifications
â€œSince neither the bill nor any state government official has given reasons for the proposed deregulation of rents, the reasons can only be a matter for conjecture. Be that as it may, there have been suggestions from some quarters that because previous rent control laws had been obeyed more in the breach, it would appear to make better sense for the lawmaker to allow parties unfettered contracts; to negotiate rents that shall be determined by the market forces of demand and supply,â€ he said.
Buoro further noted that the implications of passing the law is that landlords will be free to charge any amount he/she desires and for any advance rent period agreeable to the landlord and prospective tenant(s). This, according to him, will turn out in many instances to unilateral contracts made by landlords for tenantsÂ a take it or leave it option.
He remarked that Section 12(2) provides that â€œin the case of a monthly tenant, where he is in arrears of rent for three months, the tenancy shall be determined and the court shall make an order for possession and arrears of rent upon proof of the arrears by the Landlord.â€
By this, he contended, that tenants who owe arrears of rent for the stipulated periods have lost their tenancy by operation of law. â€œAll the Landlord would require to do would be to give the tenant a seven days notice of intention to go to court to recover possession and upon proof of the tenantsâ€™ arrears of rent in court, the tenant is out for good.â€
This, he reasoned, will particularly affect small businesses noting that SMEs are often victims of unstable cash flow, adding that â€œif for any reasons they are in arrears of rents, their business will be shut down by operation of law since their landlords, if they so desire, may go to court to prove just one fact: that the business is in arrears of rent.â€
On the three (3) months maximum advance rent which the tenancy bill proposed for sitting tenants, Buoro declared that there is nothing new in the provision, because it is already in the existing law in section 4(3) of the 1997 Rent Control and Recovery of Residential Premises Law, as amended. What has been missing as always, according to him, is the enforcement.
He also called for specific provisions to be made in the bill stipulating the number of years landlords can undertake periodic increment in rents and the percentage increase beyond which no landlord should go.
Making a presentation on behalf of LCCI, its Chairman, Commercial Law & Taxation, Otunba Ishola Adebanjo, noted that the bill does not prescribe minimum terms and conditions to be implied in every rent agreement, thus differentiating it from other social legislation such as the labour code.
He also faulted the provision that imposes the maximum of 3 months advance rent only in respect of â€˜sittingâ€™ tenants without including fresh tenants.
Adebanjo declared that a good social legislation should be a product of a careful study of the social environment and therefore called for a delay in the enactment of the bill to allow for wider consultation and careful study on the protection of business premises.
In his own contribution, Mr. Sola Enitan, representing the Nigerian Institute of Estate Surveyors and Valuers (NIESV), Lagos Branch, averred that the government has no moral right legislating on tenancy matters without first embarking on market intervention, through massive construction of social and affordable housing.
Enitan questioned the statistics upon which the proposed bill is based – such as how many Lagosians have access to housing? He remarked that what is required of government is to recognise that there are strata of housing – social housing, rental housing and affordable housing, adding that government should focus on social housing.
He asserted that government has not shown enough interest in housing, lamenting that the federal government budget on housing last year was a meagre N5 billion, adding that this attitude has robbed off on state governments – including Lagos.
Enitan emphatically stated that government has no business regulating factors of production, which he said includes rent. â€œIt is a sheer waste of resources for government to regulate factors of production – including income on investment such as rent. This gives room to â€œblack marketâ€ syndrome.
â€œState governments should not and cannot regulate rent. It is related to repayment of loan (debt), interest rate, inflation, etc. Since the Lagos State government cannot regulate interest rate, which is the duty of Central Bank of Nigeria (CBN). As such, trying to legislate on anything that bothers on these cannot work,â€ he stated.
He said that what the state government needs to do is to embark on market intervention through massive construction of social and affordable housing.