Once upon a time, before the advent of modern legislation regulating Landlord and Tenant relations, Tenants were at the mercy of their Landlords who wielded and exercised excessive powers over them. Then, the Landlord had the power to unilaterally increase rent and the Tenant was not in a position to question the increment however arbitrary, unconscionable and unjustified the increment was. The Landlord also had the power to evict the tenant without advancing any reason for doing so. He was under no obligation to give to the Tenant notice of his intention to terminate the tenancy or of his intention to evict him. If the Landlord wanted to evict a Tenant from his house, he was entitled to use force or to resort to self-help to do so. Indeed, the power of the Landlord in those days over the Tenant knew no bounds.
And so it was that the Tenant stood weak, powerless and vulnerable in the face of the enormous powers of his Landlord. His ability to bargain effectively with his Landlord was eclipsed and indeed extinguished by the excessive, arbitrary and autocratic powers of the Landlord over him.
This state of affairs gave rise to the imbalance and inequality that have come to characterize the relationship between Landlord and Tenant today. At that time, the relationship of Landlord and Tenant was a contractual one involving two unequal parties, with the Landlord as the powerful party and the Tenant, the weaker party. The terms and conditions of a tenancy or lease agreement were offered to the Tenant on a take-it-or-leave-it basis. The Tenant had no say as to his rights, interests, obligations and duties under the agreement. It was thus the need to correct the injustices, abuse, oppression and exploitation that Tenants suffered at the hands of their landlords that necessitated the intervention of government regulations in contracts involving landlords and their tenants. These regulations take the form of legislative enactments popularly referred to as Tenancy Laws, Landlord and Tenant Laws or Rent Control and Recovery of Premises Laws. In Nigeria, several laws have been enacted to protect tenants from the excesses of Landlords.
The Federal Government of Nigeria as well as the various states has made several laws on the subject. Legislation on Landlord and Tenant relations currently in Nigeria include:
1. The Recovery of Premises Act, 1990 which is the law regulating Landlord and Tenant relations in Abuja
2. The Rent Control and Recovery of Premises laws of various states in Nigeria.
3. The Tenancy Law of Lagos State, 2011.
Note that these laws are similar in provision and effect, with only minor differences. The goals of these laws are twofold:
(1) To afford tenants the greatest possible protection against exploitation and oppression by landlords by preventing arbitrary increment of rent and the unlawful eviction of tenants.
(2) To balance, unify and harmonize the interests and rights of the landlord with those of the tenant and thereby prevent inequitable and unfair bargains where one party gains at the expense of the other party.
Regrettably however, these laws have failed to effect or achieve the much needed balance and equity in the rights, interests and obligations of Landlords and Tenants. Rather than correcting or curing the inequity, imbalance and inequality in the balance of bargaining powers and positions of the Landlord viz-a-viz the tenant, what these laws have achieved is a near complete reversal of the balance of bargaining power in favour of the Tenant. These laws have turned the bargaining table against the Landlord and tilted the balance of bargaining power in favour of the Tenant.
Contrary to popular opinion that the tenant is the weaker party in Landlord-Tenant relationship, the Landlord who was previously the stronger and dominating party in the Landlord-Tenant relationship is now the weak party. This is because the law has empowered the Tenant to bargain effectively and sometimes ruthlessly, at the expense of his landlord. Indeed, the law has striped the landlord of his power to bargain effectively with the tenant. The desire of the legislature to afford Tenants protection from the excesses of Landlords is responsible for this sorry state of affairs. The decision of the legislature to secure and guarantee the tenure of tenants by imposing restrictions on the power of the Landlord to recover possession of his premises from Tenants is at the root of the Landlord’s present woes and misfortune.
This is why it is often said that it is easier for a camel to pass through the eye of a needle than for it is for a Landlord in Nigeria to recover possession of his premises from his tenant. The difficulty experienced by landlords in recovering possession from tenants is as a result of statutory protections entrenched in Nigerian law by which tenants are sought to be protected by guaranteeing and securing their tenure. To secure and guarantee a Tenants’ tenure and to prevent unlawful or forceful evictions, Nigerian law provides that where a landlord wants to repossess his premises from a tenant, he must apply to court for an order to recover possession, unless the tenant voluntarily relinquishes possession of the premises. As we shall soon see, by depriving the landlord of his power to repossess his premises and investing same in the courts, the tenant is thereby promoted and elevated to a position where he stands over and above his landlord. Apart from the rule requiring landlords to sue in court to recover possession of their premises, there are several other impediments imposed by law on the right of a landlord to recover possession of his premises. The cumbersome and time wasting requirement of serving the tenant notices of landlord’s termination of the tenancy on a specified date as well as of landlord’s intention to apply to court to recover possession is chief among such impediments.
Even more offensive and destructive of the right of the landlord to repossession of his premises in Nigeria is the concept of statutory tenancy. What this concept means is that a tenant whose term has expired (and who ought to have moved out of the premises) enjoys the full protection and backing of the law to remain on the premises and cannot be ejected from the premises unless a court orders him to vacate the premises. Such a defaulting tenant is entitled to service of statutory notices like any other kind of tenant. The Supreme Court in the case of African Petroleum Ltd. V. Owodunni went as far as holding that a statutory tenant(i.e. is one whose term has expired but who has refused to move out) can sue the landlord for trespass to land. According to the Apex court, such a tenant stands in the same position as a tenant whose tenancy still subsists. One wonders if the law encourages tenants to be bad tenants who violate or dishonour their covenants with landlords.
That the landlord now stands in a precarious position where he risks losing his investment in his property is therefore rather obvious. To some people, the assertion that the landlord is the weaker party and that he suffers serious hardship at the instance of his tenants sounds preposterous and untrue. However, we only need to remind ourselves of the fact that possession (albeit, exclusive possession) is the very foundation upon which landlord and tenant relationships are founded to appreciate the truth and veracity of that assertion. It is a notorious fact that the impediments and restrictions imposed by law on landlords’ right to repossess his premises unnecessarily and unjustly delays, frustrates, suspends and postpones the right of the landlord to possession of his premises.The emasculation of the landlord’s power to repossess his premises has left him at the mercy of the tyranny and fraud of his tenants. It is common knowledge that tenants now use the law as an instrument to perpetuate fraud on their landlords. Emboldened with knowledge of the protection accorded and afforded them by law, tenants now recklessly (and sometimes deliberately) violate and dishonour their covenants with their landlord. It is common to see tenants who are in arrears of rent for several years refuse to move out of the premises. This is because they know that they can use the courts to delay and frustrate the landlord’s right to possession.
The inefficiency of the judicial system and the long delays experienced in our courts is a great tool of war and resistance in the hands of many a tenant. It takes an average period of 24 months in court for landlord to recover possession of his premises. If the tenant is equipped with the power to delay and frustrate the right of the landlord to repossess his premises through the legal and court system and by so doing to elongate his term, then he is indeed the master of the bargaining table. As they say, he who has gold makes the rules. In the context of our discussion, he who is in possession and decides when and how to relinquish possession makes the rules. That person is the tenant.
This favoritism and one-sided affection of the law towards tenants at the detriment/expense of their landlords is a cause of concern in the real estate and construction industries in Nigeria. The ugly phenomenon of tenants’ refusal to give up possession after the expiry of their terms has caused and continues to cause untold hardship on landlords and real estate investors.
According to Oni, “… the rate of default in rent payments amongst tenants in Lagos metropolis is high. In a survey of 120 estate surveyors,12 (representing 10%) stated that tenants usually fall into arrears for up to six months,86 (about 72%) stated that default is between seven and twelve months and twenty two ( about 18 %) were of the opinion that rents are owed for more than twelve months. In other words, the study revealed that 90% of the respondents had experienced default in rent for more than seven months… “
Thus, landlords and investors lose billions to tenants who default in payment of rent. The pain of losing rental income due to default by tenants to pay rent and to honour other obligations under the tenancy agreement is aggravated by the difficulty of repossessing the premises from bad tenants. The law forbids resort to extra-judicial means to repossess premises. It prohibits the use of force or any other means of self-help to evict tenants. A landlord who intends to repossess his premises from his tenant must seek his remedy from the court and the judicial system where he faces uncertainty as to the outcome or duration of the process. Even when judgment is eventually entered in his favour, the landlord would have spent an inordinate amount of time before judgment is given and may spent more time in executing the judgment.
The effect of this state of affairs is that it discourages investment in the real estate and construction sectors of the Nigerian economy. The lack of investor confidence in these sectors means that fewer homes will be built and this is not good for the housing sector in Nigeria. The legal and regulatory bottlenecks and challenges preventing easy and quick of recovering of premises from tenants is obviously a serious investment risk.
Nigeria is a nation with a population of 170 million people most of whom are in dire need of decent, affordable housing. According to the World Bank Report, Nigeria currently has a housing deficit of 17 million houses. A whooping sum of N59.5 trillion is needed to bridge this gap in housing needs. With the present state of our laws and the judicial system with its bias for unscrupulous, irresponsible tenants, there is no way that this housing deficit can be bridged.
To say that Nigerian legislation on landlord and tenant relations has failed to balance or harmonize the interests and rights of the landlord with those of the tenant is to state the obvious. For this reason, these laws have failed to address the very problem for which they were enacted. Rather, these laws have created new problems.
We agree with the argument of one American writer who says that “… as long as government control is the only substitute for market control, the results will be arbitrary and unfair. By giving the parties to the landlord-tenant agreement more voice and tenants an equal voice, the government would have lifted itself off the backs of the people and yet be a better enforcer of tenants’ rights… “
We agree with submission of this writer that the solution to the problem of inequality of bargaining power between landlord and tenant lies neither in more government regulation nor in a free market system where there is no regulation at all. Rather, “the solution is to let the parties, not the government, set the terms of the rental agreement while the government sets the outside limits.”
We therefore need to effect a complete overhaul of the current legal and regulatory regime in Nigeria and replace it with a system that balances the interests and rights of the landlord with those of the tenant.