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Tag: rent

  • Rent crisis: Will Lagos follow Enugu footprints?

    Rent crisis: Will Lagos follow Enugu footprints?

    The rent debate in Lagos is heating up, and all eyes are now on the Lagos State House of Assembly. This comes after Enugu State took a bold step by introducing a bill aimed at curbing the excesses of landlords. In Lagos, where rent hikes and exorbitant agency fees have become the norm, the question remains: will Lagosians get relief anytime soon? IBRAHIM ADAM reports

    It was Jubril Gawat, Senior Special Assistant on New Media to the Lagos State Governor, Babajide Olusola Sanwo-Olu, who stirred the conversation when he quoted the Enugu bill on his X handle, writing: “LAGOS … Coming Soon. A very strong issue but must be well discussed and implemented after deliberation by the Lagos House of Assembly.”

    His follow-up post added fuel: “Under this tweet, Landlords and Tenants are tackling themselves and sharing very interesting perspectives. Very nice.”

    With Lagos residents grappling with skyrocketing rents, many hope the conversation will lead to concrete action.

    What the Lagos tenancy law says

    The Lagos State Tenancy Law of 2011 provides some legal protection for tenants against unreasonable rent increases. Section 37 allows tenants to challenge excessive rent hikes in court.

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    However, the law has loopholes. High-value areas like Ikoyi, Ikeja GRA, Victoria Island, and Apapa are exempted, leaving tenants in these locations vulnerable.

    Moreover, Section 37 (2) gives no clear limit on how much landlords can increase rent; meaning rent hikes could still be astronomical.

    Learning from Enugu blueprint

    The Enugu State House of Assembly recently introduced the bill for a law to amend the Landlord and Tenant Law, which aims to cap agency and legal fees at 10% of annual rent, abolish caution fees, and penalise violations with fines of up to N500,000 or six months in prison.

    The bill also seeks to define eviction processes to prevent fraudulent evictions and ensure that only certified agents operate in the state.

    Entitled “the Bill for a Law to Amend the Landlord and Tenant Law, CAP. 101, Laws of Enugu State, 2024,” the proposed legislation sponsored by member representing Nkanu East State Constituency, Okey Mbah, underwent the first reading on Tuesday.

    Mbah said: “The ills it seeks to address are widespread and generally suffered by our constituents.”

    Landlords: Defending the price surge

    For many landlords, the rising cost of rent is a necessary evil. They cite high construction costs and economic instability as reasons for the hike.

    A landlord in Surulere confidently told our reporter: “If you don’t take this house for N1m, I can bet with you that before next weekend, I will give it out for N1.5m annual payment.”

    Another landlord in Somolu was even blunter: “It is my house, and I will give it out at what I choose to. The government did not build this house for me. If you cannot pay N1.3m annually, you can try another place.”

    On social media, some landlords echoed these sentiments. Cheryl deBlaq wrote: “I only collect rent & agreement fee of #50k. I don’t use agents. The Lagos laws favour tenants more than homeowners, and that’s why many homeowners are selling or converting properties to hotels.”

    While some landlords defend their actions, others like Omotoso, a landlord in Lagos, admitted: “Some landlords are simply wicked shylocks with the amount they charge for rents in Lagos. The government must do something about landlords and their partners in crime, estate agents.”

    Tenants: Voices of frustration, desperation

    For tenants, the story is one of hardship and frustration. Rent increases without prior notice, excessive agency fees, and steep caution fees are making life unbearable.

    Reacting to Gawat’s post, Olajide Taiwo, a Lagos resident, voiced concerns about the gap between legislation and enforcement, lamenting: “Egbon, it’s one thing enacting laws and another thing implementing them. My rent has been increased twice in just three years, with a 70% hike each time.”

    Other residents shared similar experiences. One tenant disclosed, “Mine was increased three times in four years. The last one was over a 50% hike. Increases are at par with the dollar’s upward movement but never come down. God dey help us still.”

    Akereyejo emphasised the strain of living in Lagos, highlighting how landlords are quick to complain about rising costs while tenants bear the brunt.

    “Seriously, living in Lagos is almost becoming unbearable for tenants. This has to be addressed. The government is building infrastructures with taxpayers’ money, but landlords are the ones complaining about cement prices.” Akereyejo said.

    Beyond rent, hidden charges such as agency fees, caution fees, and legal costs are also weighing heavily on tenants.

    Oluwaseun Tijani pointed out: “The rent itself isn’t the problem; it’s the agency fees, caution fees, and legal fees. There should be laws regulating how and when rent increases occur.”

    Capturing the frustration in a blend of humour and seriousness, Raheem Azeez Arisekola wrote: “House rent 150k per annum, agent and commission 250k, caution fee 50k. Total package 450k. Lagos scared me a lot… haha.”

    The latest complaint comes from Wahab, a tenant who shared his ordeal with escalating rent demands.

    “My landlord increases house rent yearly. When I wanted to get the apartment, the landlord told me N600,000, and I begged for N500,000.

    “But because I needed accommodation, I had to get it. I later discovered that the tenants I met there were paying N450,000.” Wahab recounted.

    The situation worsened when the landlord issued an ultimatum. “As of yesterday, the landlord has asked them to pack out if they cannot afford N600,000,” Wahab added.

    Agents and market dynamics: The middlemen’s role

    Agents are also central to the conversation, often accused of driving up costs through excessive fees.

    Our reporter found out that in areas like Agege, Surulere, Somolu, and Bariga, a room and parlour self-contain goes for N1m to N1.7m annually, with additional agreement, commission, damages, and legal fees between N700,000 and N900,000.

    While a room self-contain between N700, 000 and N1.2m with agreement, commission, damages and legal fee between N500, 000 and N700, 000.

    Abimbola, a prospective tenant, shared a shocking revelation: “A shop rent at 500k, agreement 250k, commission 250k, caution 50k, agent fee 5k. Just this morning! I asked the agent if he could pay such for that size of shop; he went cold.”

    Another X user questioned: “Is there a way they can eradicate agreement and commission fees or, better still, set a standard price? Agreement and commission dey frustrate boiz gan.”

    Sanwo-Olu advocates rental policy

    Thankfully, Governor Sanwo-Olu is also championing a transformative housing initiative – the Monthly Rental Payment System.

    Speaking at the 10th National Council on Lands, Housing, and Urban Development meeting in Lagos last year, Sanwo-Olu emphasised the burden of annual rent obligations on low and middle-income earners.

    He highlighted the state’s existing rent-to-own programme, requiring a modest five per cent down payment and a six per cent simple interest rate over 10 years.

    However, recognising that not all residents are ready for homeownership, the governor revealed plans for a purely rental system, allowing residents to pay rent monthly. This approach is designed to ease financial pressure and make housing more accessible.

    Special Adviser on Housing, Barakat Odunuga-Bakare, reinforced the governor’s commitment.

    She announced that the monthly rental scheme would launch by the end of 2024 or early 2025, starting with the public sector where earnings are easily verifiable. If successful, it will extend to the private sector.

    The state earmarked N5 billion for this scheme, underscoring its dedication to perfecting the initiative before rollout.

    Odunuga-Bakare pointed out that aligning rental payments with tenants’ earnings would not only enhance affordability but also stabilise the housing market.

    Fashola, others advocate monthly payment of rent

    Former Lagos State Governor and ex-Minister of Power, Works, and Housing, Babatunde Fashola, alongside key real estate stakeholders, is also backing the shift to a monthly rent payment system.

    At the Wemabod Real Estate Outlook 2025 event themed “Real Estate Development: A Catalyst for Nigeria’s Economic Recovery” in Lagos, Fashola argued that synchronising rent payments with monthly salaries could halt inflation and stabilise the economy.

    Fashola’s perspective is echoed by Group Managing Director of Odu’a Investment Company Limited, Abdulrahman Yinusa.

    Yinusa stressed the importance of employer involvement, suggesting that employers guarantee rental payments by deducting rent from salaries.

    This assurance, he believes, would encourage landlords to accept monthly payments, knowing their income is secure.

    Managing Director and Chief Executive Officer of Wemabod Limited, Bashir Oladunni also praised the monthly rental concept.

    He noted that while tenants would find it easier to meet their obligations, landlords’ interests must also be safeguarded. Given that many landlords rely on rental income to offset development loans, he added that the government must establish regulations balancing the needs of both parties.

    Oladunni revealed that Wemabod, backed by six states of the federation, is exploring the monthly rental model as part of its strategic plan to expand its housing portfolio by 500 units over the next five years.

    Economists and policy experts: To regulate or not?

    While many demand government intervention, some experts warn against overregulation.

    Abayomi Odekoya wrote: “Government intervention should not be to control rent, as it will reduce the incentive to invest in the housing market. If supply is low, rent will skyrocket, and undercover payments will become the norm.”

    However, another user argued: “Truth remains that government cannot fold its hands and watch hawkish landlords drive up inflation by arbitrarily jacking up rents. In most parts of Europe, the law limits landlords to increase rents based on conditions like adjusted inflation and property value.”

    Another user added: “Ko kan ye o! This is private business; if you want rent to be cheap, build government houses and rent then at giveaway prices. When I dey buy Dangote Cement, una no help me, when I dey settle Omo onile, una no dey there. When I want to benefit, you want regulate me? Ki lo de?”

    Will Lagos take the leap?

    With the Lagos rental market spiraling and tenants crying out for relief, the state’s next steps are eagerly awaited. As Jubril Gawat hinted, the public hearing for any incoming law promises to be interesting. The question remains: will Lagos adopt a framework similar to Enugu’s, or will the landlords’ lobby prove too strong?

    For now, Lagosians continue to hope for a fairer system, one where rent prices align with reality, and the dream of living in Lagos does not become a financial nightmare.

  • On the proposed monthly rent collection in Lagos

    On the proposed monthly rent collection in Lagos

    • By Anthony S. Aladekomo

    It is indisputable that Lagos State is the pace-setter (never mind that Oyo State arrogated that appellation to itself) politically, economically and socially among the various states of Nigeria. In many sectors, it is the trailblazer; it leads and the other states follow. This has also been the case in the area of the formulation of laws and policies in Nigeria.

    For example, it was the first to pass a statute criminalising collection of rents in advance for more than one year. That statute was the Tenancy Law 2011 enacted during the administration of Babatunde Fashola, SAN, a lawyer. For the avoidance of doubt, section 4 (1) and (3) of that law makes it unlawful for a landlord or his agent to demand or receive rent for more than one year from a tenant or would-be tenant. Paying a rent for more than one year is similarly made unlawful for a sitting tenant or would-be tenant in section 4 (2) and (4) of the same law. Any person who is found guilty of those provisions shall be guilty of an offence and be liable on conviction to a fine of N100,000 or three months’ imprisonment. Apparently and expectedly, millions of peasant and middle-class Lagosians showered prayers of blessing on Fashola, because many Shylock landlords and landladies in Lagos were by then increasingly becoming inhuman, as they were going to the extent of insisting on two or three years’ advance rent!

    The voluntary compliance with and success of the said provisions of the Tenancy Law 2011 must have inspired the recent insistence of the Lagos State government to soon begin to implement monthly rent collection in the state. Any policy that will reduce the burden of overloaded rent payment by the tenants in Lagos State, where rent payment is heaviest in Nigeria along with Abuja, should normally be hailed and be supported by patriotic citizens.

    As a person who has lived in Lagos for decades and who relates with people across all classes in the state, I can testify that further reducing the maximum rent collectible by landlords from one year will be a great relief to helpless tenants in the state. The advantage that the policy will do the masses in the state is axiomatic and obvious, more so the economic situation in the country recently became worse and less friendly to the masses and even to the middle class. The indices of the worsened economic situation include astronomical rents, inflated prices of food commodities, high cost of transportation and increase in school fees, among others.

    Though it does not appear that there is already any law or amendment of any law to back the monthly rent collection initiative, the Lagos State government has, in recent times, repeatedly hyped it. For example, in March, Mrs. Barakat Odunuga-Bakare, the Special Adviser on Housing to Governor Babajide Sanwo-Olu, restated their plan for the monthly rent collection during a press briefing. According to her, the first phase of the policy will be a “trial run” to be conducted in the public sector, so that it will become more adaptable and fair. Afterwards, it will be extended to the private sector. She stated further that the monthly rent collection will kick off towards the end of 2024 or at the beginning of 2025.   

    This article is however meant to caution the policy-makers behind the current move to legislate or begin to implement monthly rent collection in Lagos State. While it would be commendable if the state government rolls out another policy that will further make life less harsh for Lagos tenants, such a policy should not turn out to be rash, myopic, counterproductive or unjust to any stakeholder.

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    Accordingly, there are words of caution and advice here for the Lagos State governor and his advisers on housing. The policy should not be rolled out or implemented without putting in place a prior holistic approach. In other words, there is the need to allow both the landlords and the tenants to have justice, fairness and equity in the formation and implementation of the policy. Is the government right to just narrowly consider the interest of tenants with virtual no consideration of the interest of landlords and landladies, many of who are not filthy rich and who built their properties with their sweat and toil? Will it be just to compel some of such people, who built their properties for their sustenance after their retirement and at old age, to collecting a paltry monthly rent? Should a person who acquired and built real properties as his sole investment and business be compelled suddenly into collecting just a monthly rent, which will never be enough to plough back?

    What will be the fate of certified estate managers, real property solicitors and estate agents who depend on yearly or half-yearly agency fees as their sources of income and means of livelihood? The truth is that the proposed monthly rent collection will drastically affect the investments, businesses and financial fortunes of the aforementioned retirees, old people, investors, businessmen and property agents.

     In the light of the foregoing, the Lagos State government has got to do a meticulous holistic consideration of all relevant issues before implementing the monthly rent collection proposal. If the state government is bent on reducing collectible rent, the ideal downward review should be to six months; nothing less. The government has also got to make the policy to have a legal backing. If it has no enabling law, it will be a lame policy. For, where there is no law, there is no offence.

     Having stated the foregoing facts, figures, laws and recommendations, I must also add that the Lagos State government should clear the air on the hypocrisy still surrounding the proposed rent policy. How does the state government want to reconcile the monthly rent collection policy with the suffocating land use charges (LUC) that it annually imposes on Lagos real property owners, many of whom are venerable retirees and old people?

    Secondly, if the government is genuinely committed to making housing more affordable or accessible to its citizens, it should prioritise proving low-cost housing for commoners just like the Lateef Jakande administration did between 1979 and 1983. Thirdly, the government should first release the plots of land due to some of its public servants and residents, which it has inhumanly refused to give them decades after they had fully paid for them. I actually have a client, a former Lagos State public servant, who has been denied his plot of land till date by the Lagos State over 30 years after fully paying for it. The client fully paid for just a single plot of land in the Ipaja Housing Scheme as far back as 1989. The lame and cruel excuse of the Lagos State Land Bureau’s Land Use and Allocation Committee all these decades has been that there is no land yet, even after we have told them that the plot of land would be acceptable to our client in Ipaja or anywhere in the state.

    Until the Lagos State government makes right such land-grabbing injustices, human rights violations and wrongs, many will continue to see its overhyped monthly rent collection proposal as an exercise in hypocrisy.           

    •Dr. Aladekomo is a Lagos-based law lecturer and public affairs analyst.

  • Developers offer rent-to-own initiatives to promote home ownership

    Developers offer rent-to-own initiatives to promote home ownership

    Through a robust Public-Private Partnership (PPP) with the Lagos State Government and the Federal Mortgage Bank of Nigeria (FMBN), five prominent property developers are spearheading a groundbreaking initiative known as “rent-to-own.” This innovative scheme enables tenants to transition into homeownership by acquiring their h ouses and paying rents over a specified period. Effectively turning tenants into landlords, this initiative has the potential to serve as a blueprint for addressing Nigeria’s staggering housing deficit, estimated at 28 million units as of 2023. If replicated nationwide, this initiative could significantly mitigate the housing crisis. VICTORIA AMADI delves deeper into this transformative endeavor.

    Nigeria continues to grapple with a persistent housing crisis, as underscored by recent estimates from PricewaterhouseCoopers (PwC Nigeria). According to PwC’s Nigeria Economic Outlook, the country’s housing deficit stood at a staggering 28 million units as of 2023. This alarming figure paints a stark picture of the challenges faced by millions of Nigerians in accessing adequate and affordable housing. Adding to the complexity of the situation, the United Nations Population Fund reported a high birth rate of 36.026 births per 1,000 people in 2023, against an estimated population of 223.8 million individuals. These statistics highlight the urgent need for comprehensive solutions to address Nigeria’s growing housing needs amidst rapid population growth.

    The recent PricewaterhouseCoopers (PwC) report, published last week and obtained by The Nation, sheds light on Nigeria’s daunting housing deficit. Despite the country’s substantial shortfall in housing units, demand for housing remains subdued, attributed to elevated rental and construction expenses, coupled with declining disposable incomes. However, even before the release of the report, prominent property and estate developers had pledged to play their part. Through structured “rent-to-own home acquisition schemes,” they aim to alleviate, if not entirely eliminate, Nigeria’s staggering 28 million housing shortfall.

    At least, five developers are said to be currently leading the charge in deploying such structured rent-to-own home acquisition schemes that allow tenants to acquire their houses, pay rents over a period and own those houses. The five developers, which have since latched on Public Private Partnership (PPP) with the Lagos State Government and the Federal Mortgage Bank of Nigeria (FMBN) to make home ownership seamless and affordable to Nigerians, include Legrande Properties, Mixta Africa, Alpha Mead, Family Homes Funds (FHF), and Lagos Ministry of Housing.

    For instance, in what is widely acknowledged as a timely and compelling proposition, Mixta Africa has been offering interested subscribers the opportunity of starting out as tenants paying their due rent and subsequently becoming landlords/homeowners within a remarkably short period of three years. The property developer does this through its rent-to-own home acquisition scheme known as ‘DUO,’ which is a homegrown housing ownership solution targeted at mid-income earners who have difficulty paying outright for a house or experiencing delays in accessing a mortgage.

    Rolake Akinkugbe-Filani, the Chief Commercial Officer (CEO) of Mixta Africa, elaborated on the DUO initiative, stating that it provides interested subscribers with the chance to fulfill their aspirations of homeownership while experiencing the perks of residing in a tranquil and luxurious environment. The initiative ensures that tenants can enjoy all the comfort, convenience, and recreational amenities essential for a healthy lifestyle. Akinkugbe-Filani emphasized that DUO offers renters the unique opportunity to transition seamlessly from tenants to homeowners through a simple and straightforward transaction process.

    Akinkugbe-Filani, however, told The Nation that DUO, as a rent-to-own scheme, is currently applicable to Mixta’s fully completed two-bedroom Marula Park home, located in Lagos New Town, off Lekki- Epe Expressway, with Beechwood Park and Lakowe Lakes Golf and Country Estate as its close neighbours. “The thought of being a tenant paying your due rent and subsequently becoming a homeowner within three years is the major attraction,” the property developer emphasised.

    Legrande Properties, a Lagos-based property developer, has also come up with a rent-to-own initiative aimed at meeting the huge housing needs of Nigerians. Accordingly, the company is currently developing 5, 000 affordable housing units in Lagos. Its Managing Director, Babajide Durojaiye, however, explained that the initiative is an opportunity for only contributors to the National Housing Fund (NHF), and that the initiative is premised on its new project called, ‘Alexandra Courts Estate’ in lbeju-Lekki, Lagos.

    The project, according to Durojaiye, is a PPP with Lagos State Government and Federal Mortgage Bank of Nigeria (FMBN). “It (the project) also provides opportunity for loans to off-takers who are contributors to the NHF scheme up to N15 million,” he said, adding that Legrande Properties has also earmarked 2,500 units for staffers of the Trade Union Congress (TUC), Nigerian Medical Association (NMA), Nigeria Labour Congress (NLC), Nigeria Union of Teachers (NUT), and civil servants at the Asiwaju Bola Ahmed Tinubu (ABAT) Renewed Hope City at Ibeju Lekki, Lagos.

    On its part, Alpha Mead, another developer, said it has initiated two models, ‘Rent4Less’ and ‘Rent-to-Own,’ to enable affordability of housing for Nigerians. The Group Managing Director, Alpha Mead, Femi Akintunde, said the company’s intervention stemmed from its worry that landlords, over the years, have been charging one to two-years rent on their properties. He also noted that government’s idea of considering monthly rent payment is not the right way to go since “One cannot legislate on what he does not own.”

    “What should be done is to meet the objectives of landlords and tenants for the system to work,” Akintunde told The Nation, noting, for instance, that Alpha Mead’s Rent4Less approaches landlords with large units, enabling them pay upfront and fill it up with tenants who want to pay monthly. “Rent-to-Own’ combines our affordable housing solutions and mortgage accessing capabilities to help subscribers on Rent4Less own their homes,” he added.

    Also, with its mandate to provide 500, 000 housing units in five years, while creating over two million jobs in the process, Family Homes Funds (FHF) has been facilitating home ownership for Nigerians through its product, ‘Help-to-Own.’ On the strength of its product, the Funds, The Nation leant, has contributed 40 per cent of the total cost of new homes for low-middle income individuals as loan.

    Interestingly, the product does not require repayment of the loan in the first five years after which monthly payments are made, starting from an interest rate of three (3) per cent, and rising gradually to a maximum of 15 per cent in the 20th year. It is for first time home buyers and for individuals who can provide a minimum deposit of 10 per cent of the purchase price and can take responsibility for any associated fees. The product is also for those who earn between N500, 000 and N1.7 million yearly.

    The Lagos State Government through its Ministry of Housing is also not left out in the renewed push to put affordable and decent shelter on Nigerians. Despite being seen by many home seekers as an exploiter and a major competitor with private developers, the State Government also has a Rent-to-Own housing scheme that targets first time home buyers. This scheme is a response to the concerns raised over the unfriendly conditions attached to home ownership through the Lagos Homes Mortgage Scheme (LagosHOMS).

    LagosHOMS has about 4,355 housing units it inherited from the mortgage scheme. These houses came from 12 housing estates that include Sir Michael Otedola Estate, Odoragunsen, Epe, Odo Onasa, Agbowa, Igbogbo Housing Estate, Ikorodu, Egan -Igando Housing estate, Alimosho, Lateef Jakande Gardens, Igando also in Alimosho.

    Other estates for the scheme are CHOIS City, Agbowa, Olaitan Mustapha Housing Estate, Ojokoro, Iponri Estate, Surulere, Sangotedo Estate, Eti-Osa and Ajara Estate, Badagry. The scheme enables individual subscribers to pay only five per cent of the cost of the housing unit as commitment fee and the balance is spread over a period of 10 years with minimal interest.  According to the State’s Commissioner for Housing, Moruf Akinderu-Fatai, Rent-to-Own, has recorded about 1,230 beneficiaries from inception. Although, at moment, these initiatives are focused on Lagos, the consensus of stakeholders in the real estate sector, including property developers and prospective homeowners is that if sustained and replicated across the country, they could be the much-needed tonic to galvanize ubiquitous home ownership schemes in Nigeria and ultimately close or reduce the country’s huge housing deficit.

  • Fed Govt to charge triple ground rent on unoccupied houses

    Fed Govt to charge triple ground rent on unoccupied houses

    The Federal Government said it would begin charging triple ground rent on estates and houses left unoccupied after three months.

    It said in its bid to rectify the country’s housing deficit, it would be taking stock of all abandoned and unoccupied houses and estates in Abuja, its environs and other states.

    The Minister of Housing and Urban Development, Arc. Ahmed Dangiwa, said the present administration is passionate about completing all abandoned projects at all costs.

    The Minister made this known in Abuja, after a tour of three housing projects in Suleja Dikko prototype Public-Private Partnership (PPP) cooperatives, Gwagwalada NPH PPP and the Guzape Federal Housing Authority (FHA) estates.

    Dangiwa said his Ministry would interface with the owners of the buildings and they would be charging the triple ground rent if they insist on leaving the buildings unoccupied.

    He said the move would force them to either put it out for rent at whatever amount or sell them off because the country cannot keep saying it has housing deficits while it has a lot of empty house that are completed and left unoccupied.

    He said: “This administration is passionate about completing all abandoned projects at all costs, even if it means rescoping the projects and in the aspect of land bank, what we intend to do is use lands that the Ministry have in states, which is why we are tasking all our state controllers of housing to ensure they give us a catalogue of all of the lands.

    “Their are a lot of abandoned estates, especially here in Abuja and its vicinity. I think we also have a few in some other states, now we want to take stock of all those abandoned houses and interface with the owners and ask them, what do you want? Do you want to keep these houses? If you want to keep them unoccupied, the government would start charging you triple ground rent instead of the single ground rent that we charge.

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    That would force them to either put it on rent at whatever amount or sell them off because we cannot keep saying we have housing deficits while we have a lot of empty house that are completed and left unoccupied.

    “We have tasked the department of lands and Urban and regional planning in our ministry to take stock of those estates, to give us the names of the proprietors or owners of the estates, any estate that stayed more than three months unoccupied, then we would start charging them triple ground rent.

    “The three sites we visited have their different peculiarities, the one in Gwagwalada the contractors are ready to work but the Ministry couldn’t provide the funding so we are going to rescope the project. The one in Suleja is abandoned and dilapidated in most parts, we would sell them as they are, we can’t put money in those kind of buildings now because we have people willing to buy them and we would sell them at the price that we constructed them years ago, we don’t intend to increase the price.

    “The site at Guzape shows the power of Public-Private Partnerships (PPP), they were built without government funding, which is what we want to emphasize on to ensure Nigerians are provided with decent and affordable housing.”

    On the aspect of the renewed hope mega cities in the pipeline, the Minister said: “The first phase of the 40,000 housing units across the Federation would commence in the Federal Capital Territory (FCT), right now we are on the supplementary budget and within a couple of weeks, we would commence the ground-breaking of some of the houses we intend to construct, we intend to construct six mega cities, the renewed hope cities around the country, one in each geopolitical zone of the country.

    “We also intend to construct the renewed hope estates, in the remaining 30 states of the Federation, so depending on the outlay, we would commence the construction. We are also engaging Public-Private Partnership (PPP) with some of the developers who would provide funding and then we provide an enabling environment for that to happen. For the FCT, we are thinking of constructing about 10,000 housing units and the off takers are already on ground for the high earned, low and medium income earners.”

  • ‘Rent-to-own way to bridge housing gap’

    ‘Rent-to-own way to bridge housing gap’

    The housing gap in Nigeria keep widening yearly. Operators are looking at rent-to-own agreements to bridge the gap. Assistant Editor OKWY IROEGBU–CHIKEZIE writes that if the National Housing Fund (NHF) and the Federal Mortgage Bank of Nigeria (FMBN) live up to their billings, more Nigerians will become home owners.

    Operators in the housing sector have said the only way to bridge the about 28 million housing gap is rent-to-own. Rent-to-own (RTO) agreements include a standard lease agreement and also an option to buy the property later. They argue that advanced economies adopted this by having a virile mortgage system. 

     The dream of owning a property appears to be fading daily for millions of Nigerians, and this could be attributed to bad policies, high cost of building materials, inflation, lack of accessibility, and alarming interest rates from lenders.

     According to the Central Bank of Nigeria (CBN), home ownership is just about 10 per cent, compared to 72 per cent in the United States and 78 per cent in the United Kingdom. Due to the high cost of construction materials, the rise in land prices, poor infrastructure and the high cost of finance, owning a house has become more difficult for middle- and low-income households.

     The RTO scheme is a contractual agreement between a renter and a property owner. In this scheme, the tenant initially rents a property for a specified period, with the option to purchase upon lease expiration, though some other contracts may mandate purchase. During the rental period, the tenant pays a fixed rent, some of which is applied towards offsetting part of the purchase price of the property, if they decide to exercise their option to buy. The price is usually agreed upon in advance and may be based on the  market value or a predetermined figure.

    The scheme aims to give renters a pathway towards eventual home ownership. Each monthly instalment is shared between the rent and a fixed amount saved as part of the down payment for the house. The tenant/buyer can apply for another financing option – such as a mortgage – to pay the outstanding balance for the house. This is payment at the end of the lease period.

    An RTO agreement allows would-be home buyers to move into a house right away with several years to work on saving for a down payment before trying to get a mortgage.

    The RTO allows prospective buyers to lease a property with an option to buy. Its agreement is a deal in which you commit to renting a property for a specific period; with the option of buying it before the lease runs out as your tenancy is converted into a bulk sum and a greater percentage from the Federal Mortgage Bank of Nigeria (FMBN) if one is a contributor to the National Housing Fund (NHF).

    Contracts also establish the amount of monthly rent plus the extra amount the renter pays monthly. The additional amount is usually credited to the final purchase price, so it reduces the amount the buyer has to come up with when buying the home.The extra rent is non-refundable. It compensates the seller for agreeing not to sell the property to anyone else until the agreement with the renter ends.

    Contracts should also stipulate who is responsible for maintenance during the rental period.

    How does Rent-to-Own work?

    In their contract, the buyer and seller agree on the price to pay for the house. Regardless of the home’s value, the buyer can acquire it for that amount soon. To take into account anticipated gains in home values, RTO home prices frequently exceed market rates. The buyer benefits if the home’s value has increased more quickly than anticipated. The tenant may leave if the house’s value drops.

    Pros and cons of Rent-to-Own for buyers Pros

    Buy with bad credit: Buyers who can’t qualify for a home loan can start buying a house with a rent-to-own agreement. Over time, they can work on rebuilding their credit scores, and may be able to get a loan once it’s finally time to buy the house.

    Lock in a purchase price: In markets with increasing home prices, buyers can get an agreement to buy at a price now with the purchase taking place several years in the future.

    Test drive: Buyers can live in a home before committing to buy the property. They can learn about issues with the house, and any other problems before it’s too late.

    Move less: Buyers who are committed to a home and neighbourhood (but unable to buy) can get into a house they’ll eventually buy. This reduces the cost and inconvenience of moving after a few years.

    Build equity: Technically, renters do not build equity the same way homeowners do. However, payments can accumulate and provide a substantial sum to be put toward the home’s purchase.

     Disadvantages

     Forfeiting money: Something you need to know about rent-to-own agreements is that if you don’t buy the home, you lose the extra money you pay. Sellers may be tempted to make it difficult or unattractive for you to buy so they can pocket your investment.

    Slow progress: You might plan to improve your credit or increase your income so you’ll qualify for a loan when the option ends, but things might not work out as planned – you should know this about rent-to-own agreement before starting out.

    Less control: You don’t yet own the property, so you don’t have total control over it. Your landlord could stop making mortgage payments and lose the property through foreclosure, or you might not be in charge of decisions about major maintenance items. Likewise, your landlord could lose a judgment or quit paying property taxes and end up with liens on the property. The agreement should address these scenarios. The landlord isn’t allowed to sell while you have an option on the property, but legal battles are always a major headache and expense.

    Falling prices: Home prices might fall, and you might not be able to renegotiate a lower purchase price.Then you’re left with the option of forfeiting your option money or buying the house. If your lender won’t approve an oversized loan, you’ll need to bring extra money to closing for a down payment.

    Late payments hurt: Depending on your agreement, if you don’t pay rent on time, you may lose the right to purchase, along with all of your extra payments. In some cases, you keep your option, but your extra payment for the month is not counted, and won’t add to the amount you’ve accumulated for eventual purchase.

    Experts say RTO schemes are a viable option for eventual home ownership without the burden of a sizable lump payment. The scheme is not very well-known; however, it has been in operation for some years.

    Furthermore, the RTO programme comes with flexible and convenient payments that help the tenants plan their finances. It is an easier, long-term option for home ownership and less risky than traditional mortgages, as people are not locked into long-term deals.

    Rent payments also serve dual purpose of contributing towards ownership.

    It is true that majority of Nigerians are living below the $2-a-day poverty line and cannot afford decent housing. As of last November, the National Bureau of Statistics (NBS) reported that about 133 million Nigerians are poor. This accounts for nearly 63 per cent of the  population.

    A further four million Nigerians are purported to have fallen below the poverty line in the first half of 2023 (World Bank Nigeria Overview: March 2023). The poverty figures in Nigeria threaten to increase by 13 million or more Nigerians before 2025 if no interventions occur. The Statistics Bureau’s findings also show that 38.6 million Nigerians experience some level of housing poverty.

    Furthermore, rising interest rates instituted by the CBN affect housing as it hiked the interest rate from 11.5 per cent in April, last year to 18.5 per cent last month.

    The Managing Director of the Federal Mortgage Bank of Nigeria (FMBN), Madu Hamman, discussed how the CBN’s rising monetary policy rates have negatively impacted Nigerians’ access to real estate investments and mortgages.

    The FMBN Director made these remarks at a virtual forum with the theme “Navigating current challenges in the Nigerian mortgage market”. Rising interest rates have a ripple effect on the mortgage market. Mortgage rates are reported to have soared from a 20-24 per cent yearly range to 24-27 per cent. They also influence housing by raising the cost of construction with the climbing prices of raw materials.

    An example is the price of cement, which has risen from N3,500 in January, last year, to N5,400 last month. This makes Nigeria’s housing deficit tenuous, as many struggle to build their houses, hence, the usefulness of the RTO scheme.

    The government aims to provide affordable housing by piloting RTO schemes. This has been in operation and available to civil servants for decades at the federal and state levels. It has birthed the Federal Low-cost Housing Estates, and state Low-Cost Housing Estates, a few of which are situated in most major cities around the country.

     At the state level, an example of the RTO system is the Lagos State’s Home Ownership Mortgage Scheme (HOMS).The Federal Mortgage Bank of Nigeria (FBMN) has also propagated the scheme through the National Housing Fund (NHF).The scheme has also extended to the private sector, as some real estate developers have used it to market otherwise unaffordable homes. Notable real estate companies that have unveiled RTO programmes in the year include Mixta Africa and FirstHome Mortgage Brokers.

    At a recent interactive session with select reporters, a real estate expert and Managing Director, Legrande Properties Development Company Limited, Mr Jide Durojaiye, advised Nigerians to reach the FMBN to assist them to get about 90 per cent mortgage loan charged at a single digit interest to rent and own the housing units being provided by Legrande Properties Development Company Limited, at Ibeju Lekki, Lagos.

     He canvassed the need for the public to embrace the ‘rent-to-own’ housing policy to bridge the housing deficit and have value for themselves, which he said, has the model to meet their shelter needs.

    He lamented that the model was not used in Nigeria, and urged governments to provide an enabling environment to popularise it. He said the scheme was approved last December, adding that the policy makes the person to be the owner as well as an investor in the house.

    He said: “You don’t need to carry bulk money to pay for a place. You will have money for other things and have more years to pay. Rent-to-own is the solution to the housing problem and deficit. It gives you enough time to pay and it is making a tenant a homeowner. You have enough money to take care of your family. You are creating value out of the rent you are paying. Many people can fall for this before they retire. Now that the Naira is depreciating, we need to invest in real estate.’’

    He said the Naira weakness was killing the real estate business as prices of building materials keep going up, especially that of cement.

    The Legrande Properties Development Company Limited boss lamented that people are not aware or don’t have confidence in banks because there are a lot of resistance. He said though the FMBN disburses funds to the primary mortgage institution (PMI), the latter  fails to disburse to the people and that it was for this that the RTO was created to deal with subscribers.

    He said the model was making housing finance and home ownership easier in developed countries and would help to bridge housing gap.

    The realtor said Nigerians were under-utilising opportunities for mortgage finance offered by the FMBN. He said the RTO offered an opportunity for affordable mass housing.

    “As I am talking to you, they (FMBN) have money and people are not using them,” he said.

    He said Lagos State Government was partnering Legrade Properties Company in reconstructing the Jakande Estate, Ajah from two to eight storeys and building 11 estates called Alexandra Courts, Coastal City, Ibeju-Lekki. He urged the public to step out of the old style of building or acquiring houses to embrace the RTO by also falling back on  mortgage.

    He said the model was the most convenient way for people to own homes, with loans from mortgage institutions and pension funds.

    “Now, once you are a contributor to the Federal Mortgage Bank, you are qualified and will be charged one per cent interest, and the only collateral that the bank needs from the person is the deed from the developer. In the case of Alexandra Courts, the subscribers need to pay an initial deposit of 10 per cent which is N4.6 million from the cost of the house at N46 million while the bank pays the rest,” he said.

  • LASPARK, OAAN reach agreement on ground rent

    The Lagos State Parks and Gardens Agency (LASPARK) has reached an agreement with the Outdoor Advertising Association of Nigeria (OAAN) on the payment of ground rent on billboards installed in any of its parks or gardens.

    The agreement was reached at a meeting between officials of the association and LASPARK General Manager Mrs. Bilikiss Adebiyi-Abiola at LASPARK’s head office in Agidingbi, Ikeja.

    The General Manager, who praised the association for its commitment to paying the ground rent, Said the fee was not an additional charge by the state government as claimed by the association.

    “The payment to the Lagos State Signage and Advertising Agency (LASAA) is an advertising permit fee, which is statutory while the charges from LASPARK is purely a fee for placing billboards on the agency’s beautified and landscaped sites,” she explained.

    Responding to some issues raised by the association, Adebiyi-Abiola stated that, over the years, the agency’s management had reduced the ground rent twice, hence, asking for further reduction would not be tenable considering the concession the agency had granted  OAAN. Full enforcement for payment of the fee began yesterday.

    The GM reminded OAAN that the agency had been magnanimous, noting that the issue had been lingering for the more than two years. Adebiyi-Abiola enjoined OAAN to collaborate more with the agency towards making the environment a better place to live.

    The General Secretary of the association, Mr. Femi Ogala, who had earlier sought for justification for the ground rental fee, pleaded with LASPARK to make the fee more affordable for members of the association. Ogala, while thanking the management of LASPARK, promised that the executive would reach out to other members of the association to ensure total compliance with the payment.

    He appealed to the agency to always consult the association on all issues that would impact the already existing relationship between the agency and the association.

  • Developer allegedly flees with prospective tenants’ N150m rent

    Developer allegedly flees with prospective tenants’ N150m rent

    Operatives of the Lagos State Police Command are on the trail of a fleeing estate developer, Tunde Najeemdeen Maleek, after he allegedly defrauded about 150 persons of over N100 million rents for a 12-apartment building.

    The building is located on Bankole Street, Ijeshatedo area of Surulere, Lagos State.

    It was learnt that Maleek had collected the rents from the unsuspecting victims between May and June 2017, when the building was under renovation.

    The unsuspecting victims paid money into his Zenith Bank account – 2007070910– with the name Tunde Najeemdeen Maleek.

    The Nation gathered that Maleek, who posed as the son of the owner of the building, contacted his victims on the phone last week and told them to meet him at the house the following day to collect the key to their apartments.

    On getting there, the prospective tenants discovered they had been duped as the developer bolted while the victims were shocked beyond words.

    The matter was reported to Itire Police Division, while the victims were asked to write statements.

    One of the victims, Favour Ogadinma, said Maleek collected a sum of N490, 000 from her for a two-bedroom apartment.

    She said: “We were looking for an apartment in May 2017 and we were told that there was a vacant apartment at number 1 Bankole Street, Ijesha. We went to check the place, and it was fine by us. We saw Mr. Tunde Najeemdeem Maleek who told us that he was the son of the landlord and that his father (the landlord) is late. He told us that the rent for the two-bedroom flat was N350, 000, while agreement and commission fee was N140,000. We paid the sum of N490,000 into his Zenith Bank account number: 2007070910 with his name: Tunde Najeemdeem Maleek and he gave us receipt for the apartment  on June 13, 2017.

    “ The whole building was under renovation, so we waited for the completion of the renovation work and we were always going to see how the work was progressing. On Monday September 25, Mr. Maleek  told us to come on Friday September  29, to take possession of our apartment. We went there and met over 12 people claiming that they paid for the same apartment we had paid for, the situation was the same in other apartments in the building, while Mr Maleek was nowhere to be found. It was then we realized that the ‘landlord’ had collected rents from over 150 people for a building of 12 flats.

    “ We (the victims) went to Itire Police Station and wrote statements. The police asked us to come back on Tuesday 3rd of October 2017. We went back and we were told that the case had been transferred to the State Criminal Investigation Department (SCID). We went to Panti (SCID) and also wrote statements. We called the said Mr. Maleek’s phone number and a male voice  told us that Mr. Tunde is a developer and that he has been arrested for fraud. We explained ourselves to the man, he told us to come to Special Fraud Unit, Ikoyi. We went there on Wednesday and we confirmed that truly the landlord is in the custody of Special Fraud Unit, Ikoyi. The building is under lock and over 100 million naira has been paid into Maleek’s bank account. “

    Another victim, identified simply as Adewale, said he also paid N490,000 to the developer sometime in June and was given a receipt, adding that he collected a loan from his employer to pay the rent.

    He said: “I paid N490 to Mr.Maleek in June this year for a two-bedroom apartment. The most painful thing  is that I took a loan from my boss and I am still paying back the money as we speak.It was while I went there to collect the key to my apartment that I and other victims discovered that we had been duped.”

    The spokesman of Lagos State Police Command, Olarinde Famous-Cole , said the police were on the trail of the suspect, adding that the matter has been transferred to the State Criminal Investigation Department(SCID).“The matter was reported to our division at Itire, but the Divisional Police Officer (DPO) in charge of the station, because of the sensitive nature of the case, transferred the matter to SCID,Panti, for diligent prosecution.

    The matter was reported to our division at Itire, but the Divisional Police Officer (DPO) in charge of the station, because of the sensitive nature of the case, transferred the matter to SCID, Panti, for diligent investigation and  we are currently looking for the suspect(s).”

  • Alarming rent in Lagos

    SIR: Lagos property owners have gone out of control. They fix rents arbitrarily without any recourse to rules or tenancy laws. Recently, a landlord in Surulere offered me a two bedroom flat for N1million and this for a house built in 1998 even when other houses within the same vicinity is N500, 000. Another says his three bedroom flat close to Lagos University Teaching Hospital (LUTH) is N1.5million when similar apartment in the vicinity goes for N700, 000. He saw nothing wrong, even though the house in question was the old Lagos Executive Development Board (LEDB) built probably in the 1970s. Same goes for a landlord who told his tenants in a block of two bedroom flats to vacate if they are not ready to pay N800, 000 when their neighbours using the same two bedroom flat is paying N500, 000!

    From Surulere, Gbagada, Yaba, Jibowu, Ebutte-Metta all the way to the Island (Victoria Island, Ikoyi, Lekki, particularly in Lekki/Ajah axis), almost 65% built houses have remained un-occupied due to high rents.

    Lagos hinterland like Ikorodu, Ipaja, Alimosho, Ayobo, Oke-Aro, Abesan, Ijaiye-Ojokoro etc. are no better. Property owners remain king and fix rents arbitrarily without recourse to the prevailing dwindling economic situation, control or regulation by the government. Considering that property appreciation is dependent on government’s provision of amenities like good roads, drainages, pipe-borne water, electricity etc., why is the government quiet when the citizenry are being fleeced so brazenly?

    The government has been accused of not doing enough in housing provision especially for the low-income earners. It is common knowledge that the houses being built by the government presently is far beyond the capacity of the majority of citizens, particularly salary earners. Since government is a social service and not for profits, then it behoves on it to look inward for delivery of mass houses with a social template. This will surely mitigate the continued arbitrariness of property owners in Lagos State.

    I call on the governor of Lagos State, AkinwunmiAmbode to resume work on the unfinished housing estates left behind by his predecessor, specifically in Ijora, Surulere, Ilubirin/Osborne, Gbagada, Lekki, Akerele, Imota, Ikorodu etc. Completion of these estates must be with a social intent that will benefit the majority, mostly low-income earners.

    The government owes it a duty to the citizens to protect their interest from inconsiderate property owners who want to exploit them. More than before, the Lagos State government needs to intervene in the control of rents so as to protect the citizens from predators. The government will need to revisit its edicts and tenancy laws, some dating back to the regime of Mobolaji Johnson up until the last attempt by the immediate past government of BabatundeFashola. The laws need to be re-jigged and fine-tuned for optimum performance, implementation and enforcement.

     

    • Badejo Adedeji Nurudeen,

    Surulere, Lagos.

  • ‘Surveyors not responsible for high rent’

    Surveyors and valuers are not responsible for the huge housing deficit and high rent, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos Branch Chairman, Mr. Offiong Ukpong, has said.

    He was reacting to the claim of Works, Power and Housing Minister Mr. Babatunde Fashola that surveyors and valuers should be blamed for those problems.

    Ukpong, who led a delegation to visit Oba Rilwan Akiolu of Lagos, said surveyors and valuers were often accused of being responsible for several anti-tenancy activities, high cost of renting properties; tenants’ inability to pay rent; fixing of high rent and charging high fees.

    According to him, NIESV, which ought to have been a development partner to the government, is not treated as such by the authorities, considering that when major decisions are taken, the body, according to him, is not represented.

    “The cost of land, its preparation, taxes and levies paid are not under our control nor advice. We do not determine accommodation density nor are we involved in the design of the building, yet we shall be managing it when all others exit. We are not involved at the construction stages, neither is our advice sought on areas of cost savings or elimination of dead spaces or unnecessary facilities. Our opinion is not sought on whether the housing provision is for social housing or investment considerations,” Ukpong said.

    He said often estate valuers were called at the completion of a project to do the marketing and management, sometimes, at a predetermined rent. Besides, property owners, most times, shun the advice of valuers, who are easily relieved of the job if they advise anything to the contrary.

    He said in other countries, real estate development attracted 2 to 4 per cent interest rate per annum at a tenor of between 15 to 25 years.

    “Is government giving mortgage? For what duration and at what rate? If rent is high what of Land Use Charge? What is the return to land as a factor of production, and should it not be competitive? Instead of any blame game, we should be thinking of synergies and partnerships rather than the neglect our profession has suffered these past years,” he said.

    Meanwhile, the NIESV delegation also sought the monarch’s influence in swinging patronage for the body. Specifically, they canvassed the partnership of all stakeholders in the drive for urban renewal of Lagos Island and other areas.

    “It is a fact that Lagos Island is the cradle of civilisation in Nigeria. Lagos was and is still the London of most other states in Nigeria. But if you look carefully at Lagos, perhaps with the eye of an estate surveyor and valuer, you will see that those buildings that were outstanding and impressive then have lost their steam and prestige,” he observed.

    Ukpong said there were many areas due for redevelopment, including most parts of Lagos Island, Shitta, Iddo, amongst others. He expressed concern that despite that Lagos is a major town in the world, it is, however, a shame that 30 metres from its major highways, rural characteristics were still prevalent. He admonished that the multiple interests subsisting in tiny units of development or buildings can be identified, harmonised or aggregated and developed into multi-storey buildings with modern conveniences and facilities without losing the original ownership rights or interest.

    On building collapse, the NIESV team noted that the multiple-storey buildings dotting the skyline of Marina and Broad Street had been in existence for many years, while several new developments across the state had collapsed. Most of the old projects were managed by estate surveyors and valuers, and none have collapsed.

    “You will recall the works of Knight Frank and Rutley as he then was called, Fox and Co. and many other indigenous firms that operated then. They were involved in project conception, project management and property management, and we had more organised cities and society. But, suddenly, every other professionals in the built environment thought that what the estate surveyors and valuers know and could do can be done by them and we became known, called and addressed as estate agents and today, the buildings are collapsing, the cities are decaying and the environment is blighted,” he said.

    Ukpong urged the state government to adopt the old method of construction and management, which stipulated that no building above four floors should be approved without the inclusion of a consultant estate surveyor and valuer, who knows what to do and the enormous responsibility of his profession in every project.

    Besides, Ukpong said, the government should consider the establishment of the office of the Valuer-General of the Federation, and by extension, in all the states; appoint an estate surveyor and valuer as a minister and commissioner in Lagos State, and partner the professionals on urban renewal of Lagos Island and other areas of the state requiring regeneration.

    He charged the government to engage members more in policy formulation and positions of responsibility as their competencies were daily getting destroyed and eroded, with the society and the people being the worst for it.

    Said he: “In the Federal Executive Council today, there is no estate surveyor and valuer there. But the estate surveyor and valuer is also a land economist. Who advises the government on land matters?”

  • Widow arraigned for owing rent

    A 70-year-old widow, Mrs Elizabeth Adeoni, was yesterday arraigned in an Osogbo customary court for owing rent arrears for 20 years.

    The landlord, Lateef Adegoke, told the court that Adeoni had not been paying since 1995.

    Adegoke, therefore, prayed the court to assist him recover his money from the septuagenarian.

    The landlord urged the court to order her to pay the rent and vacate the house. He said he needed the money to take care of certain financial obligations.

    In her response, the septuagenarian said life had been  difficult for her since her husband died many years ago, adding that things became worse when she lost her two children.

    Adeoni, who was weeping, pleaded with the court to beg the landlord not to eject her because she had nowhere to go.

    The court’s President, Ladipo Balogun, urged the woman not to lose hope and advised her to find something to do  to enable her pay.

    Balogun adjourned till March 15 for further hearing.