Tenancy in Lagos State: Separating Facts from Fictions.

Tenancy in Lagos State:

Separating Facts from Fictions.

By: T. O. Nuga

INTRODUCTION:

A tenancy is simply a contractual relationship between two parties, which are a Landlord also referred to as the Lessor as one part, and a Tenant also referred to as the Lessee on the other part. It is legally binding on the two parties involved.

The basic types of Tenancy that exist are; Tenancy-at-will, Fixed-term tenancy, Periodic tenancy, and Statutory tenancy, which are further disintegrated to special specifications.

In Lagos state, the major law governing tenancy is the “Lagos State Tenancy Law of 2011”, except the exempted areas such as Apapa, Ikeja G.R.A, Ikoyi, and Victoria Island. However, the Recovery of Premises Act is applicable in these areas of exemption.

There are so many misconceptions between the parties as to what entails in a tenancy relationship. So many costly mistakes are made by either party due to misinformation or ignorance. This article tends to clarify and separate the facts from the fictions on each one of the most commonly arising questions and perceptions in the minds of stakeholders, especially among Lagosians for better understanding of what is right and justified in Lagos State.

1.0 DOES TENANCY EXIST WITHOUT A TENANCY AGREEMENT?

A tenancy is created either by express (in writing by both parties entering into a Tenancy Agreement) or implied grant (without formal documentation).

In a scenario where there is no Tenancy Agreement duly executed between the two parties, and there is sufficient evidence of acceptance of consideration (rent) by a Landlord or his lawful agent from a person for occupation of a property, then a Tenancy relationship is deemed to have been established, and the general terms and condition stated in the Lagos State Tenancy Law of 2011 takes effect, except in the areas exempted.

But, in a scenario where there is a duly executed Tenancy Agreement between both parties, the specific terms and conditions stated in the Tenancy Agreement apply, to the extent of its consistency with the Lagos State Tenancy Law of 2011.

2.0 IS IT RIGHT TO SERVE A TENANT A NOTICE TO QUIT WHILE HIS RENT IS UNEXHAUSTED? 

Yes, it is absolutely right for a sitting tenant to be served a notice to quit within the period of his/her rent. A lot of people are misinformed and have the ideology that a quit notice should only be served upon the expiration of his/her rent. This is a wrong perception that should be erased.

The unbiased truth is that a tenancy can be determined/terminated at any time by either a Landlord or his lawful agent or by a Tenant. In a situation where it is determined/terminated by a Landlord or his lawful agent, it is done by the service of a notice to quit on the tenant which must not expire before the anniversary of the tenancy period.

3.0 IS A QUIT NOTICE LENGHT OF PERIOD “RENT-FREE”?

Upon service of a notice to quit to a tenant, many tenants deliberately fail to pay the outstanding rent from that day till the time they eventually vacate the property, this is triggered by an ideology that they ought not to pay, though some are well-informed enough but still choose to be engulfed in the ecstasy of absconding with the rent.

The truth in this matter is that the statutory periods in a quit notice is just to provide the tenant with enough time to seek for an alternative property before such notice expires. The Landlord of any property has the reserved right to receive rent as long as a tenant remains in possession of the property, and it is the obligation of the tenant to pay. The moment a tenancy period expires and a tenant fails to either pay or vacate the premises, “estate at sufferance” comes into play, meaning that the tenant upon expiration of his/her tenancy still holds possession of a property against the landlord’s will. A contest in the court of law by the Landlord with sufficient proof mostly ends in favour of the Landlord, where a judgment of forceful eviction from such property and confiscation of the tenant's assets to the extent of his/her liabilities is passed.

However, the action to sue for failure to pay rent or mesne profit (rent payable for continued possession of property upon expiration of a notice to quit) is dependent on the choice of the Landlord or his lawful agent.

The common occurrence is that some Landlords often choose to insist on their right and sue such erring tenants, while many others are mostly interested in the recovery of the property alone and are lenient enough to let go of the rent.

However, the latter does not over-rule the truth that it is the lawful right of a Landlord to demand and receive rent/mesne profit on every moment a tenant remains in possession of his property, except as otherwise pronounced by a court of competent jurisdiction.

 

4.0 IS SECURITY DEPOSIT SAME AS SERVICE CHARGE?

For simple clarification on the common misconception of these two deposits, a Security deposit is not the same as a Service charge.

Security deposit is a “refundable” amount demanded at the discretion of a Landlord or his lawful agent and payable by a tenant prior to occupation of a property to cover for any unsettled liability incurable by such tenant in a tenancy. Such liability could be untended damages, utility bills, or even rent. It is the duty of the Landlord or his lawful agent to give an account of the Security deposit from time to time to the Tenant. Upon termination/determination of the tenancy by either of the two parties, the unspent remainder of this deposit ought to be given back to the tenant, that is why it is called a “refundable” security deposit.

The most common occurrence is that some Landlords receive it without any possible intention to refund, nevertheless, most tenants at the expiration of their tenancy are not justified to receive any refund, instead, they leave the Landlord with greater liabilities than the amount of the Security deposit to battle with.

Service Charge, unlike security deposit, is a continual payment all through a tenancy for utility bills and every other services rendered within the property, examples such as sanitation, waste disposal, electricity, security, swimming pool maintenance, laundry services, e.t.c. The facility manager, who ought to be an Estate Surveyor & Valuer, by virtue of his competence and statutory provision, is entitled to a fee of ten percent (10%) of the total cost of the services provided. An account of this ought to also be reported to the tenants (services end-users) periodically.

5.0 WHAT ARE THE RIGHTS OF A TENANT IN A TENANCY CONTRACT?

Subject to the statutory provisions of the Lagos State Tenancy Law, a Tenant has the following basic rights;

• Right to privacy and peaceful enjoyment of the property.
• Right to use common facilities or service in the property.
• Right to enjoy watertight and structurally fit property.
• Right to determine/terminate the Tenancy at any time.
• Right to receive a periodic statement of account on a security deposit and service charge paid.
• Right to receive unspent security deposit (provided that no liabilities are left untended to.
• Right to a statutory length of period in the case of termination/determination of the tenancy by the Landlord or his lawful agent.

6.0 WHAT ARE THE RIGHTS OF A LANDLORD IN A TENANCY CONTRACT?

Also subject to the statutory provisions, a Landlord’s basic rights are as follows;

• Right to inspect the property haven given adequate notice to the Tenant for this purpose.
• Right to receive rent as and when due.
• Right to receive mesne profit from occupier for further occupation of his property upon effective termination/determination of Tenancy.
• Right to demand a Security deposit of any amount at his discretion prior to handover of the property to the Tenant.
• Right to utilize such Security deposit on untended liabilities incurred on him by the Tenant.
• Right to terminate/determine the Tenancy at any time for his personal use or in an event of a breach of specific terms and conditions on the Tenancy Agreement.
• Right to receive possession of the Property at the expiration of the quit notice length period.

7.0 WHOSE RESPONSIBILITY IS IT TO EFFECT REPAIRS IN THE PROPERTY?

The issue of repair is basically dependent on the terms and conditions specified in a tenancy agreement, which ought to reflect the type of lease entered. If the lease is a Full Repairing and Insuring (FRI) lease, it is the Tenant’s absolute responsibility to effect all external and internal maintenance, repairs and also insuring the property. Same way, if it is an Internal Repairing and Insuring (IRI) lease, the responsibilities are shared, where it shall be the Tenant’s responsibilities to effect internal parts of the property occupied, while the Landlord’s responsibilities are to effect external repairs and maintenance, including the common areas and insuring the property.

In some cases where the burden is lifted off the Tenant, though still their responsibilities, service charge which was addressed earlier is paid to cover for them to the extent of a defined scope of work.

However, in the absence of a tenancy agreement, the IRI lease terms take effect. In a more explanatory way, in an IRI lease, the following responsibilities are accrued to each party;

Landlord’s responsibilities; the structure of the building, roofing, external painting, fence, and other external and commonly shared parts of a property.

Tenant’s responsibilities; doors, furniture, plumbing fixtures, and other internal parts of the property.

CONCLUSION:

For the sake of clarity and elimination of fictitious ideologies concerning Tenancy in Lagos State. It is very important that Landlords, existing and prospective Tenants should have a proper understanding of their roles and responsibilities, to enable both parties act within the scope of their rights and to foster good tenancy relationships, thereby imparting individual/family wellbeing, which further translates into an improved functional society.

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 ABOUT THE AUTHOR:

Temitayo O. Nuga is an astute real estate expert, an Alumnus of the prestigious Federal University of Technology Akure (FUTA) where he bagged his bachelor's degree with honours in Estate Management. He is an elected professional member of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), also a Certified Project Manager by the International Project Management Professionals. So far, he has amassed ten years of tremendous and rich practical experience in the Nigerian real estate sector, which he considers as just the beginning. Contact: tayonuga@gmail.com