Lagos Tenancy Law further explained

TEXT OF SEMINAR HELD AT RPL ON SATURDAY 29TH SEPTEMBER 2012

LAGOS TENANCY LAWS 2011

DELIVERED BY EXPERT ON TENANT, LANDLORD MATTERS BARRISTER VALENTINO BUORO.

Therefore, we have with us today a veteran in that field. In the field of tenant landlord issues. He is a barrister at law. But prior to that he’s been a journalist, he’s been all sort of things really and those experiences count in his practice now. He will discuss with us along that line. The first thing will be to give us a general overview of the new tenants’ law and probably to compare and extract the differences between the new law and the old. The environment too as regards tenant landlord relationship environment will be discussed. Questions will be entertained later as regarding this issue. So please join me in welcoming Barrister Valentino Buoro.

Thank you very much. I’d like to begin this program by affirming his introduction that I’ve been so many things before being a lawyer and will still continue to be many things afterwards. But todays discussion is on landlord and tenant issue and like I always say, it’s a very unique relationship. That most of us don’t take very deep thought about. Now there is usually this misconception that the landlord is a rich man, and so when you occupy a premises and anything goes bad, the tenant complains “the landlord is not doing this”, “the landlord is not doing that”, and you think that each time the landlord is in funds. Am I right or wrong?

RESPONSE: Yes

And then on the other side, the landlord sees you as a bank. It is just a natural thing. Like we seat here now and think, “oh Barrister, he must be very rich”. You feel he must have some 20 or 30 thousand naira on him. Meanwhile am looking for one naira. And I will be looking at you and saying, “ah these guys have come here for landlord and tenant matters, they must be rich, they must be comfortable”. It’s a natural thing. However, when it comes to landlord and tenant its symbiotic. It’s a two way traffic. And like in marriage, the two parties must make it work. A landlord alone cannot make a tenancy relationship work neither can the tenant do so alone. Both of them must work together. Therefore, we are going to start from that premise.

How many of us are landlords here? (two participants indicate by raising their hand). I have an NGO called Landlord and Tenants Rights Initiative. The first challenge I had was somebody asked me why I focused on both landlords and tenants, why not one group. Either you are a tenant relationship person or you are landlord relationship person. Because just as you have devilish landlord so also do you have devilish tenants.

There are some landlords who are so good, but their tenants are from hell. You also find tenants who will do anything and spend their money to repair the premises, but all they get is “leave my house, leave my house”, as if theirs is the only house in the area. So when am going to talk to you, I’ll do so from the both sides. From my perspective, the new landlord and tenant law does not favour tenants the way the old one did.

Why do I say this? The old law had rent control and recovery of residential premises law. At that time there was rent control, for instance, the law said if you lived in Iganmu, the amount you pay for one room in Iganmu should not be the same amount you pay for one room in Ikeja. So you had different schemes for different places. The ceiling was N250, 000; therefore, the law covered rents of up to N250, 000. In other words, government saw that if you could pay rent over N250, 000 then you should be able to take care of yourself. That law didn’t cover properties over N250, 000.

For us lawyers at the time, if you want to go to court, you have at the back of your mind whether the rent you were charging was the valid rent or the illegal one. Of course the truth about is that almost all lawyers at that time charged the illegal rent, because nobody was following it. And the law is such that it is only when you complain that it will answer you. The owner of the world, God our creator knows that we all have our challenges but he says “come to me ye who are burdened”. He knows everybody is burdened, but you take the first step and come. Until you do that, you’ll be there and he’ll be looking at you. So also is the law. The law at every time wants you to complain first. If you don’t complain, then the law is good.  Am I making any point?

Since nobody complained about illegal or invalid rent at that time, there was never a case on the issue on rent. But when it came to recovering the house or the premises, we who were practitioners were conscious of the fact that, so that we don’t take a case to court that has the issue of illegality. Now the very first thing that this new tenancy law of Lagos state dealt with is the issue of control.

There is no more rent control. There is this economic word applied to our petroleum industry that wanted to liberalize it, deregulation. This way if I Valentino decides my rent is one billion, and you agree then so be it. Therefore, there was no more regulation as per issues bordering on rent. It’s the very first thing you notice in the new law.

The second thing , is the issue that we all celebrated. Three months, six months for sitting tenants and others. Those things have always been there. There has always been a law against taking more than three months from sitting tenants in the old law. Now the new law says you cannot take more than six months for monthly tenants. If it’s a quarterly or half yearly tenant, you cannot take more than one year. Then if it’s a sitting one year tenant, the same one year of advance rent.  However, how many of us have observed this new law in paying rent? Has anybody recently taken in a new property? Or recently took up accommodation as new tenants?

RESPONSE: From a landlord- “I charged one year did the tenant opted to pay two”

BUORO: Any other?

RESPONSE: “I got accommodation for someone and the landlord insisted on two years.”

BUORO CONTINUES

Now the law says its maximum of one year. That the landlord or his agent should not ask for rent of more than one year from an incoming tenant. And if he does, he or she will be liable to go to jail for three months or pay the penalty of N100,000. The same law also says that the tenant should not offer to pay for more than one year or else he suffers the same fate. Therefore the people involved in our case study are guilty already.  What if one of the parties offers, who reports the other?

RESPONSE: Nobody

Have you seen a trap there?

RESPONSE (MAN): I believe the law is not meant to work because the two involved become accomplices. One offers the other pays. They both become guilty.

RESPONSE (MAN 2): I see it as a trap. I see it as a loophole of the law. For one to report any case to the law, there must be a disagreement between the two parties involved. If the two parties are in agreement, then it’s based on mutual understanding.

RESPONSE (WOMAN): The way I see it, the tenant who offers two years is only trying to protect him or herself from future increase. This is because some landlords increase their rent every year. The tenant wants rent stability for two years.

RESPONSE (MAN3): Since there is a receipt, then its enough evidence to produce in the court of law.

RESPONSE (MAN 4): The tenant may want to drag the matter to court, but he is already trapped by paying in the first place. The landlord can also capitalise on this culpability and create problems in future.

BUORO: That is a good point. That two or three agree to commit illegality does not make it legal. The law is very strict, it says: it shall be unlawful for a landlord or his agent to receive from a new or would-be tenant rent in excess of one year, in respect of any premises and vice versa. Any person who receives or pays rent in excess of what is prescribed in this section, shall be guilty of an offence and shall be liable on conviction to a fine of N100, 000 or three months imprisonment. My own feeling is that this section, which is section 4 of the new law was not intended to work. What then is the solution? The landlord who asks you for 2years is already saving a room in prison for three months or pay the fine.

The only way this section of the law can be effected is that when the landlord demands rent of more than one year, you ask him to be hold and then you go report to the police and maybe they give you marked money for the transaction. It is only at that point that you can be free.

Remember the case of Farouk Lawan and Otedola. It really is a section that may not work, not that it can’t work at all because am a lawyer. Critically, in landlord and tenant relationship, I want to leave this law and help us examine practicality in the matter, what we can use immediately. Why? There are several aspects of the landlord tenant relationship. The very first one is the agent.  These are very special people. After the agents you have, tenant screening, followed by tenancy agreement, service of notices, then dispute resolution.

Let us take it gradually. If you want to get a new apartment in Lagos, first thing you do is look for an agent. Not so? Most of us get our properties from agents. In Lagos, every agent has accommodation. For example you want a two bedroom apartment and you go to an agent, you pay his transport and he takes you to another agent’s office, this one also claims to have it, then tells you to follow him. You get to pay transport fare for the three of you that leads you to the fourth agent, this can lead up to like five different agents, by which time you are be fed up. All that stress just to get one property. At this point, you need to ask who your agent is.

RESPONSE (MAN): The very first agent.

Does the very first agent have any right or advice to a property he did not have in the first place? Other than first met him and you saw the property together the first time. How does agent A come in when the person who has the direct brief over the property is agent E?

RESPONSE: Am in the business of buying and selling. Where I do business sometimes, customers come and I don’t have the good they are looking for. What I do, is that I take the customer to another shop in that same line that trades in the same items as me and get a little commission out of it or agree with the customer to take them somewhere they can get the item and they pay me something of their own will. The law may be different for real estate, but this sort of thing works for us as traders. That is why I have come here to learn though.

BUORO: Madam what you are talking about is referral. Let me then explain the law of agency. An agent is somebody you employ to carry out a function, which you ordinarily should have carried out yourself. That agent is supposed to link you to third party. The moment that happens, the agent drops off. Once the agent connects a tenant with the principal (landlord), he no longer has any business with the tenant. He has gotten you a vehicle, how you get there is not his business. That is in law what an agent is supposed to be.

This agent issue in question creates a multiplicity of principals. This arrangement does not exist in the law because every agent involved gets a certain commission. Even if they are up to 20, the person who has the direct brief takes 50% and the other divide the remaining percentage. For practical purpose, if agent A connected you to agent B, then you have issues with the landlord, do you go to agent A who has no business with the principal.

Now the agent connects you to the landlord, and like I told you in law, at this point, he drops off. You now deal directly with the landlord. For those who are landlords, I’d like to know what you look out for in a tenant before acceptance.

RESPONSE(WOMAN): I am an educationist. First, I would want a tenant that has a source of income. Then I want to take someone who is married, because marriage implies responsibility. Because you expect that, a man who is married with wife and children is responsible to a certain point. Sometimes some people are particular about tribe, they say some tribes are problematic. Others in addition to other things lookout for the religion for compatibility sake.

BUORO: Thank you madam, for indeed these are the usual aspirations of landlords. One, which is very critical is source of income. Can this person pay his rent? Beyond the immediate rent, can he renew the rent when the old one expires. As for responsibility it is debateable whether a married man or a single man is more responsible. For example, when was I younger I was more responsible. I will explain, then I lived with my parents and catered for them and my younger ones. I did not drink nor indulge in certain money wasting activities, yet, an older told then that I was not responsible until I got married.

It’s a mind-set, your worldview and reaction to the situation differs depending on your marital status, more often than not. Marriage brings out a different side of us. The woman you married and paid dowry for grips your shirt and refuses you exit from the house, you beat up for four days consecutively, then something must be wrong with the way the man handles conflict. Are there no better ways to deal with it? The responsibilities that come with marriage makes one grow. Just like those women who have been to the labour room and back.

Am trying as much as possible to be practical and not talk too much law, so that having being empowered today, you’ll be able to take step when your agent, tenant, or landlord misbehaves. The issues that arise out of tenancy screening must be addressed adequately; otherwise, the landlord will have to deal with tenant for as long as he occupies his premises. Once again, as for responsibility, I think that anyone can be responsible in a tenant landlord relationship irrespective of the marital status.

There are some irresponsible married people, who are drunkards, don’t take care of their family, and their children are a riot squad. The issue of religion and tribe depends on the person of the landlord, some people’s level of intolerance is higher than others. The way and manner in which we communicate our dislikes matters. For instance, I have a young woman whose landlord gave three months’ notice to leave and she came to me and said “Uncle this what has happened”. Three months’ notice when you normally pay one year rent is illegal and invalid; she is supposed to be given six months’ notice. I wrote to the landlord and told him he couldn’t give her three months’ notice. It was six months or nothing more. His lawyer replied and said he will adhere to the six months’ notice. By the end of the sixth month notice, she still lived in the premise. The landlord called me at this point and demanded an explanation. I explained about the woman’s dire financial constraints and promised she will pay.

Because of the way I intervened and responded to him, the matter was resolves. This says strongly that tenant landlord business is all about relationship and attitude. What I therefore advise is know your tenant. The agent will not help you know your tenant fully for landlords because all he is interested in is his 10% commission. It is the landlord’s duty to ask questions. One of the easiest ways, is to ask for the telephone number of the last landlord and why he is leaving the house. If he tells that the former landlord is a goat, and refuses to give the number; know that after staying in your own house for two or three months you become a dog. This becomes the first sign of a troublesome tenant.

On the other hand, if he had a good relationship with the former landlord  he would give the number in a second. On the issue of marriage, some people could even bring any woman that first day as their wife just to get the accommodation and that is the last time you see the woman. Whether married or unmarried, the background check is what matters, what the person does for a living is vital.

After this, the first aspect of law comes in here, which is tenancy agreement. This is the constitution, the crux of landlord tenancy relationship. How many of us have tenancy agreement here? Do you live in your own house? Do you have a written tenancy agreement? What of those who don’t have it? Let us refer to the law on this. Before that, can you share your ideas as to what a tenancy agreement is?

RESPONSE (A real estate practitioner): tenancy agreement is a document that details the condition of offer as well as acceptance, and it strictly guides the tenant as well as the landlord.

RESPONSE (Banker and Estate surveyor): it is a written document that contains the terms and condition of a tenant’s stay in a house, and the responsibilities of the tenant as well as the landlord within the stated period of time.

BUORO: Tenancy agreement therefore, is the rules, obligations, the constitution binding the landlord and the tenant on accommodation. It therefore means that if you want to come into a house, after you have paid your money to the agent to register you, and he takes you to a landlord, the landlord is supposed to carry his own screening for his or her own purpose. The first point of official relationship between you and your landlord is that of tenancy agreement. The experience on the field is that tenancy agreement is almost the same all over Nigeria. More like ‘wash and wear’.

When you pick a tenancy from one of you here and compare with that of another, you will find out they are the same thing. All that is different is the name and address of the property. That is where the challenge first starts. When you see an agreement, in law an agreement is a mutual understanding. What both parties have agreed to, which is a contract. That is why in law, it is said there is no standard contract. They are very few. Generally, a contract is what you and I agree on. The law does not make any contract for you; it is you that makes your own contract; so if we are drawing up a tenancy agreement and yours is same as mine it makes no sense. Given, there may be some similarities, like the names of the parties, the rent, address of the location, nature of the property, advance rent if it the property is incorporated etc.

Many times in Nigeria, landlords are not involved in the drafting of the tenancy agreement. They just ask their lawyer to draft one for them. When the problem is in court, it is not your tenant against your lawyer; it is your tenant against you. Your lawyer just represents you. A tenancy agreement is to be what you as a landlord tells your lawyer to write. E.g., I don’t want anybody coming into my house after ten pm, don’t like tenants who chew gum etc. Whatever law the tenant is not comfortable with is thrashed out with the landlord. At the end, it should be something both parties are comfortable with.

Some people make the mistake of assuming the tenancy agreement must be written; it doesn’t have to be so. But the landlord who gives a house without tenancy agreement and thinks he is smart, is not serious. He is just being foolish, because when a matter arises, it’s at that point that if you tell a lie, he the landlord is bound to be able to prove that it’s a lie. If the annual rent is N300, 000 and I tell the court that I have been paying N500, 000, how do you disprove me?

RESPONSE: Receipt

BUORO: Those who don’t give tenancy agreement, hardly give receipts. Everything is supposed to be documented as a procedure. According to the current Lagos law, tenancy agreement can be written, oral, or implied. What is an implied term? It is something that nobody talks, body language. Every contract begins with an offer and acceptance. For instance, you want to move

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