Plans by the Lagos State Government to introduce sweeping changes to the 2015 Tenancy Law partly aim to regulate arbitrary rent increases and landlords. But industry practitioners reckon that the state government is better off dissipating energy on building affordable public homes to ease demand pressure on private apartments, VICTOR GBONEGUN reports.

In major cities nationwide, a quiet battle is raging between landlords and tenants due to mutual mistrust, legal uncertainty, and systemic dysfunction, which have given birth to a chaotic rental market.

Among the major battlegrounds in this war are urban centres like Lagos, Port Harcourt, Kano, Enugu and Abuja, where thousands of tenants face illegal evictions, exorbitant rent hikes and exploitative tenancy terms, while landlords lament lost income, damage to property, and other underhand tactics employed by tenants to evade rent payment.

Over the years, many state governments have ignored these problems, thereby leaving both parties to their fate. In fact, the lack of regulatory measures has worsened the situation in places like Lagos, where the chaos is more pronounced.

At the core of the problem in Lagos State is the massive housing deficit, estimated at over five million units. With demand far outstripping supply, landlords hold unchecked power and often ride roughshod over their tenants.

Across the board, it is commonplace for landlords to increase rent arbitrarily without sufficient notice. This development forces tenants to relocate or face eviction, even without formal agreements. The Lagos Tenancy Law (2011) mandates a minimum of six months’ notice before a rent increase, but enforcement is weak.

Typically, landlords demand one to two years’ rent upfront, despite legal restrictions. Because of this, low-income earners are priced out of decent housing, and the Tenancy Law prohibits demanding more than one year’s rent in advance for property under N3 million. Many landlords often ignore this.

Among a legion of accusations levelled against landlords is that they evict tenants without proper court orders. In fact, sometimes, tenants are forcibly removed or have their belongings thrown out, even as only a court of law can authorise eviction after proper procedure.

Routinely, most landlords fail to maintain their property, ignoring even the simplest of repairs regarding plumbing, roofing, electricity, forcing tenants to dwell in unsafe or unhealthy conditions.

All these notwithstanding, landlords also have legitimate grievances, many of which stem from the absence of formal systems, enforcement challenges, and risks associated with Nigeria’s unstable economic climate.

For instance, some landlords rely on rent from their property as their major or sole income source; hence, delays can disrupt their financial obligations, including property maintenance or mortgage repayment. Also, among these house owners are those who see legal eviction as time-consuming and expensive when their tenants err or fail to discharge their financial obligations in a timely manner.

In situations where unruly or defaulting tenants refuse to vacate property even after the lease has ended, or when rents are unpaid, some landlords feel powerless and often resort to illegal eviction procedures because of the frustration with the legal process.

Another factor that brings about conflict between tenants and their landlords is when the former causes structural damage to the property, neglects property care, or engages in behaviours that reduce the property’s value, especially now that repairs are costly.

In shared accommodations or serviced apartments, some tenants refuse to contribute to communal bills like electricity, water, waste disposal, and security. While other tenants suffer from these, as they sometimes have to make up for it, landlords are also sometimes compelled to cover the shortfall.

Landlords feel overregulated or unprotected by the law, particularly when tenants exploit loopholes or delay tactics in court. There’s a perception that the legal system favours tenants, discouraging landlords from following proper procedures.

In view of the prevailing chaos, Lagos authorities recently intervened and announced plans to introduce monthly and quarterly rentals, which favour the tenants.

The Lagos State Real Estate Regulatory Authority (LASRERA), saddled with regulating the real estate sector, has been at the forefront of implementing the state Tenancy Law of 2015 and ensuring compliance.

The Special Adviser to the governor on Housing, who supervises the LASRERA, Barakat Bakare, condemned the trend and said that the government would no longer tolerate the exploitation of residents. She warned landlords and property agents against arbitrarily increasing rents, particularly in response to infrastructural developments or for vague, unjustifiable reasons.

Bakare noted that the state’s tenancy law is currently under review to address existing loopholes, including the issue of caution fees, which are not yet provided for in the current legal framework.

A landlord based in the Ojodu-Berger axis, John Adeshina, said: “Accelerated adjudication is very important. I don’t think there is anything wrong with the current law, but much more; it is the judicial system that needs fine-tuning.”

A tenant, who resides in the Lekki axis of the state, Kunle Adeosun, said that the new tenancy law being proposed should prevent landlords from carrying out arbitrary rent increase without notifying the tenants beforehand, and without any improvement in the building, ensure strong enforcement of the proposed new law, award strong penalties for infractions on the law.

There has also been a renewed attempt to amend the law and implement rent control, which was triggered by escalating accommodation costs in Lagos metropolis, sadly worsened by the activities of landlords/ unprofessional real estate agents, who inflate rents and other rent fees indiscriminately, thereby inflicting more financial pains on residents.

One of the critical aspects of the subsisting law that investors desire an amendment in is the area of adjudication of landlords/tenants disputes, which they believe is the only faulty part of the tenancy law. The development may have triggered a hike in residential rental costs in Lagos in the last one-year by over 200 per cent, making Lagos and Ogun states the highest ranked in property price increases.

For instance, a two-bedroom apartment that previously went for between N350,000 and N550,000 now goes for N1.5 million to N2 million, while a three-bedroom accommodation, which previously went for N550,000 and N650,000, is now rented out for between N2.5 million and N3 million and above, depending on location. It is way higher in posh areas.

There are fears that if the government carries out its threat to ensure monthly rent payments, many landlords may convert their buildings to short-let apartments, which generates more income for investors.

Findings by The Guardian revealed that in Lekki, Ikeja, Victoria lsland, Maryland, Surulere and other such locations, many operators of these kind of facilities charge at least N100, 000 per day/night in cozy en-suite one-bedroom apartments while it could be more in others depending on location, facilities and services offered.

A similar scenario is also playing out in Enugu State, where the House of Assembly is considering a tenancy law to regulate agency and legal fees for tenancy agreements, and to ban caution fees charged.

The legislation seeks to cap agency and legal fees at 10 per cent of the rent and abolish caution fees—charges imposed on tenants by landlords that are rarely refunded at the end of the tenancy.

Major stakeholders have cautioned against government intervention in landlord-tenant relationships through a tenancy law, stressing that imposing rent control and tenancy regulations constitutes an infringement of Section 43 of the 1999 Constitution and contradicts the spirit of the Land Use Act (1978).

They contested that such regulations exceed the state’s legislative competence and will disrupt market efficiency and violate contractual freedom.
According to them, the existing Lagos State Tenancy Law already imposes restrictions on rent ceilings, arbitrary tenancy terms, and advance payment limits, warning that the new move may interfere with free-market dynamics and the sanctity of contract law.

A real estate investment consultant and Founding Consultant, Phoenix & Equinox, Sola Enitan, said that the Lagos State Tenancy Law, though aimed at social equity, conflicts with constitutional property rights, undermines the Land Use Act, infringes upon contractual freedom, and disrupts housing market efficiency.

He suggested that stakeholders should seek judicial invalidation of unconstitutional aspects of the tenancy law, adding that the law should prioritise housing supply, investment incentives, and infrastructural expansion.

“Government interventions should support economic principles rather than impose restrictive tenancy mandates. Lagos must recalibrate its housing policies to respect constitutional freedoms, legal certainty and economic realism. The need to maintain constitutional provisions, fundamental rights of citizens, avoidance of costly litigation and housing and real estate sectoral imbalances must be uppermost in the mind of the government.”

The immediate past chairman of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos Branch, Gbenga Ismail, said that the government must ensure that the proposal to change the tenancy law is backed with legal clarity, incentives for compliance, and infrastructure to support its enforcement.

He noted that the intention of the state government on rent regulation and monthly rent payment is commendable. However, the implementation must be handled with care, he said, emphasising that any rent law must be balanced with tenant protection and sustainability of the landlord’s investments.

Ismail urged the government to adopt a consultative data-driven approach, adding that as a body of real estate professionals, the institution is prepared to collaborate with the government in shaping a rent law that is fair, practical and responsive to market realities.

The Chairman, NIESV Board of Trustees, Austin Otegbulu, told The Guardian that it would be difficult for the government to control rent in houses that it does not produce, whereas the interest rate, cost of cement, labour and other factors of production considered in construction work are left uncontrolled.

On the implication of rent control law for the states’ private housing sector, he observed that many developers who borrowed money to build houses may not be able to pay back because huge amounts of money are often involved, adding that the development may force banks and other financiers to stop funding housing projects.

According to him, attempts to control rent will create a black housing market, adding that if rent is controlled and the cost of materials is rising, the housing stock will be reduced indirectly. “If the rents are not enough to pay back loans for the project and the house goes into disrepair, the owner may find it difficult to carry out renovation, and the building will further deteriorate, leading to the short economic life of such a building,” he said.

The President, Association of Town Planning Consultants of Nigeria, Bisi Adedire, warned that when policy comes in a way that doesn’t create an enabling environment for investors, there could be housing shortages and homelessness with an increasing population and less housing supply in the market.

He said: “The tenancy law of Lagos State favours the tenants rather than the Landlords. If you look at the situation critically, the government cannot provide accommodation for all the residents of the state. The government doesn’t have control when it comes to the sales of building materials; people import building materials and place prices on their goods based on the cost of importation, and nobody controls that. Indigenous manufacturers produce and fix prices, and determine the quantity to supply in the market and prices. Instead of initiating price control, the government leaves everything to the forces of demand and supply.”

Also, the President, Real Estate Developers Association (REDAN), Akintoye Adeoye, told The Guardian that the issue is not about the tenancy law, but about the judiciary, the judges at the magistrate and the high court levels, who should be well educated on the practicality of handling tenants and landlords’ disputes.