• May Worsen Tenant-Landlord Relationship
• Property To Remain Unoccupied Longer
• Experts Propose Monthly Rent Payment
• Say Pandemic Doesn’t Stop Impending Eviction Of Any Tenant
There are strong indications that next year might not be rosy for many tenants in Nigeria, as the impact of the COVID-19 pandemic begins to manifest economically, possibly resulting in a strained relationship between landlords and tenants due to the inability of some tenants to renew their rents promptly upon expiration.
The case of one Amos Ibeh is a pointer to what could be in the offing for some tenants. But for his university contemporaries who rallied to raise the sum of N350, 000 for the rent renewal, Ibeh, whose income was adversely affected by COVID-19 lockdown, would have been thrown out of his two-bedroom apartment in Lagos last month.
The father of two, an Information Technology (IT) consultant, was issued a notice to give up possession of his apartment in Alasia area of Lagos State due to his inability to renew his rent since April 12. It was either Ibeh paid his rent by August 12, which, of course, wasn’t possible even four days to the expiration of the final notice, or he vacated the property.
The Computer Science graduate of Nnamdi Azikiwe University, Awka in Anambra State, was on the verge of being evicted when his friend and coursemate rallied other alumni to come to his rescue.
He is certainly not alone in this, as there are many other Nigerians suffering the same fate due to COVID-19, and more would still go through this rough patch in the coming months and next year, except the economy picks up or a flexible payment plan is agreed upon between the tenants and landlords.
The Guardian’s investigation revealed that next year would witness a number of disagreements between tenants and landlords over rents default, resulting in possible legal battles and evictions.
Some experts said the looming battles might necessitate government intervention, especially with regard to a review of rent duration or requesting landlords to accept payments in installments.
A real estate practitioner and Chairman of Royal Institution of Chartered Surveyors (RICS) Nigeria Group, Mr. Gbenga Ismail, said the impact of COVID-19 on real estate would be felt later, because of the tenancy/rent structure of the sector, adding that unlike what obtains in the United Kingdom (UK) and the United States, for instance, where rents are renewed on a monthly or quarterly basis, Nigeria might not feel the pressure now, as most of the middle-class pay rents yearly.
Ismail said most people that have either lost their jobs or whose salaries were/are slashed are likely to have paid their rents in advance before the pandemic and that could still ease the tension at the moment, at least, till the end of the year.
“By the period of the lockdown, you may not feel anything, but by the third or fourth quarter
of the year, you start feeling it. Then, we will see how it has affected Nigeria, as people might not be able to pay rents or buy houses as planned.
“We are not sure of where the monetary issues are going now and if lending continues into the real estate sector. Even in inventories, where developers have put houses out for rent, the concern is, who is going to rent them? Before COVID-19, we waited six months before houses got rented or leased, but now, it may not be less than 12 months. The immediate impact would soon start to reveal itself,” he stated.
Ismail further said tenants are likely to plead for a moratorium, as businesses have been adversely affected and some might have lost their jobs, adding: “Those who have mortgages and possibly in the risk areas of losing their jobs will definitely have discussions with their lenders if that happens.
“I think the mortgage firms have to listen and think of how to help them because the COVID-19 situation is a force majeure nobody expected and people are being forced to make decisions they did not plan to make.”
According to the Lagos Chamber of Commerce and Industry’s (LCCI) comment on the Q2-2020 GDP report released by the National Bureau of Statistics (NBS), the performance of the real estate sector had been weak even before the pandemic and entered into recession in Q3-2019 due to fragile macroeconomic conditions and weak demand for commercial real estate assets, coupled with a low level of investment in the sector.
LCCI noted that the sector contracted by 21.99 per cent in Q2-2020, but COVID-19-induced lockdown and social distancing rules made it difficult for real estate players to interact and transact with clients; hence the suspension of most real estate, which would be worst if the government refuses to fully re-open the country for business.
Corroborating these assertions, some lawyers have equally warned of looming evictions next year, adding that the real pressure would start to build up in the last quarter of this year, as the numbers of tenants in rental arrears have skyrocketed.
Principal Partner of Emeka Ndukwe and Co., a real estate developer, Mr. Emeka Ndukwe (SAN), stated that COVID-19 shouldn’t be the reason for non-payment of rents, saying landlords also need their money to feed, especially for those that depend on their rent for upkeep.
He said the only thing that could be done in the present situation is for a tenant who is unable to renew his/her rent upon expiration to enter into an understanding with his/her landlord to allow him/her some time to pay up, saying:
“There is no doubt that a number of tenants will find it difficult to pay rent in advance, as they used to, following the state of affairs in the country, but we can advise our clients to be lenient with such people, especially those whose rent expired during the lockdown.
“But for those whose rents were due for payment since last year or before the lockdown, they do not have any excuse and they can be issued with a notice to quit if our client (landlord) decides so because they have contravened their tenancy obligations.”
“COVID-19 doesn’t stop the impending eviction of any tenant, but we advise the renters to discuss with their landlords to avert the predicament next year.”