The Senate bill to regulate the payment of rent in the Federal Capital Territory (FCT), in particular to stop the annual prepayment of rent, thus requiring landlords to collect rent monthly, is indeed a development welcome.
The Bill entitled “Bill to Regulate the Manner of Payment of Rent for Residential Apartments, Office Spaces, etc. in the FCT and for Other Related Matters, 2022” was read the second time on the penultimate Tuesday of the plenary.
The bill’s sponsor, Smart Adeyemi, who was leading the debate, said: “Our economy hasn’t done any better in supporting prepayment. This rental system has continued to impoverish Nigerians. Many FCT residents are struggling to cope with huge rents, therefore, legislation must be made for a better society. This bill aims to reduce the advance payment for new tenants to three months and aims to protect low-income people from any form of oppression.
Only Senator Chimaroke Nnamani (PDP, Enugu) opposed the bill, saying rents are determined by market forces, such as the cost of acquiring land and building materials. His position, however, did not prevent the passage of the bill at second reading.
We welcome this bill and urge lawmakers to see it through just as we urge the President to give his assent to it when it comes to him. Indeed, one of the biggest challenges faced by residents of the FCT is housing because, apart from the fact that the costs are astronomical, the conditions attached to its rental are strict. While so-called stand-alone studios cost an average of N250,000 in satellite towns, the same goes for around N550,000 in the city centre. And despite these enormous costs, tenants are often asked to pay a year or two before they can occupy the buildings. This has led to several unoccupied buildings, as many FCT residents are unable to afford the cost.
This development has led to the proliferation of slums as residents, especially low-income people, seek alternative solutions to their housing problems, including building slums on illegally acquired land.
Mercer’s annual cost of living survey ranks Abuja as the 12th most expensive city in Africa, mainly due to the high cost of housing. And with growing insecurity in most parts of northern Nigeria, Abuja is the most attractive to live in, increasing the need for rental housing. This was not improved by the development of satellite towns such as Kubwa, Karu, Nyanya, Mararaba, Suleija, Gwagwalada, Lugbe, Kuje and other small settlements, thus making the FCT a seller’s market.
Thus, the intervention requested by the Senate on the housing sector in the FCT is essential. But the Capital Territory is not the only one. The Lagos State Government started implementing a monthly rent system in January 2022 which means that tenants in the state are no longer required by their landlords to pay their rents annually or two, three years in advance, as is sometimes the case.
The Lagos Tenancy Act 2011 states that if you are an incumbent tenant in a property, it is unlawful for a landlord or his agent to demand or receive rent for more than six months for a monthly or yearly tenant for an annual tenant.
Generally, annual rents are popular with landlords because they provide a measure of financial consistency by providing consistent rent. We recognize that there could be downsides to monthly rent as there is nothing stopping a landlord from raising the rent or ending a lease while a tenant is in the apartment, as the landlord can react much more quickly to market changes. We therefore urge the legislator to take this into account during further work on the bill to ensure that there are no loopholes that could be manipulated to the detriment of the tenant. We also call on state assemblies to consider replicating this bill in their states.
The importance of this bill at this time cannot be overstated, especially when considered against the enormous cost of rent in the FCT and the general economic situation of the average citizen, who is barely surviving . Residents are struggling to raise as much money in one go as is currently being demanded. The bill should provide for a strict enforcement mechanism and the strengthening of the capacity of the rental tribunal. Additionally, there must also be provisions to compel landlords who do not maintain their buildings to do so to ensure that homes remain habitable.