{"id":10124,"date":"2020-04-20T04:23:33","date_gmt":"2020-04-20T04:23:33","guid":{"rendered":"https:\/\/amazingproperty.com.ng\/blog\/property-owners-tenants-in-peril-as-coronavirus-hits-rents-income\/"},"modified":"2020-04-21T11:34:35","modified_gmt":"2020-04-21T11:34:35","slug":"property-owners-tenants-in-peril-as-coronavirus-hits-rents-income","status":"publish","type":"post","link":"https:\/\/amazingproperty.com.ng\/blog\/property-owners-tenants-in-peril-as-coronavirus-hits-rents-income\/","title":{"rendered":"Property owners, tenants in peril as coronavirus hits rents, income"},"content":{"rendered":"

 <\/p>\n

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\"Victoria<\/p>\n

Even before coronavirus struck, <\/span>property owners<\/strong> and many of the businesses that leased their space were under strain due to high vacancy rate and rents default.<\/span><\/p>\n<\/div>\n

Their woes seem to multiply now as jobs and the economic effects of the pandemic have hit incomes of thousands of people. Experts predict that property owners<\/strong> could face cash crunches as renters default and many renters will move in with family and friends or relocate to less expensive locations.
\nHousing<\/a> advocates say the coronavirus economy could upend housing in major cities like Abuja, Lagos, Port Harcourt and Kano reducing apartment rents that have risen by 50 per cent. They also blamed the overheated rents for the rise in homelessness.<\/p>\n

For instance, in the outskirts of Lagos, a two-bedroom flat goes between N300, 000 to N350, 000 per annum while a three-bedroom flat is rented between N400, 000 to N500, 000. A self-contained goes between N150, 000 to N250, 000. In the city centre, such as Gbagada and Ikeja, the rents are quite higher.<\/p>\n

They argue that the current situation may do little to alleviate the housing crisis, with more than 20 million housing deficit in the country. The crisis has been pinned to unfavourable housing policies, ineffective mortgage<\/a> system and the Land Use Act. Currently, some people are uncertain of their jobs after the lockdown, and those that depend on daily stipends or income cannot meet their obligations.<\/p>\n

Consequently, tenants whose monthly or yearly rents are due in March and April to have used the lockdown as an excuse not to remit their rents to their landlords or property managers. Renters have called for the government\u2019s intervention and eviction moratorium for residential tenancies.<\/p>\n

There are also calls for homeowners to be given relief from banks like a freeze on mortgage loans<\/a> so that landlords can have extended loan<\/a> periods and suggestions for rent holidays for tenants to cushion the effects of the pandemic.<\/p>\n

Though built professionals defer in their opinions on the issue, they all agree that the government has a part to play to ensure stable rents and reduce evictions in the housing industry.<\/p>\n

They say the gridlocked coronavirus economy would heavily impact on both owners and renters, some landlords may lose a significant portion of income to retain some tenants while others may engage in rent discounting and rent concessions.<\/p>\n

While some estate surveyors and valuers want that state government to protect tenants who due to lack of income caused by covid-19 are not able to pay their rents as and when due from eviction; others are agitating for proper housing data to enable government plan for the industry.<\/p>\n

A past president, International Real Estate<\/a> Federation, (FIABCI) Nigeria, Chief Kola Akomolede, added, \u201cthis protection should not be extended to those tenants who have been habitual rent defaulters before covid-19.\u201d<\/p>\n

According to him, banks can assist landlords by waving mortgage repayments for the period of the pandemic. No one should be sanctioned by non-payment of mortgage during the period either by way of penalties or foreclosure<\/a>.<\/p>\n

\u201cInterest can also be cancelled for the period of the pandemic. In the same way interest on loans should be waived for property developers who are forced to stop work throughout this period. If this is not done, they will be forced to increase house prices, which will lead<\/a> to an increase in rents and cause inflation generally,\u201d Akomolede said.<\/p>\n

He continued: \u201cIt is a good idea if landlords can grant rent holidays but it is going to be difficult to implement. Don\u2019t forget that the same landlords are also affected by the lockdown just like their tenants. They too cannot work or earn income during the period from their normal businesses.<\/p>\n

\u201cAgain, it will depend on the magnanimity of each individual person. I will not advise any legislative or law to this effect but it can be encouraged by appealing to landlords to grant rent holidays to their tenants for the period of the lockdown.\u201d<\/p>\n

For the chairman, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Faculty of Estate Agency and Marketing, Mr. Sam Eboigbe, the call for rent holidays has to be holistic, as it would require the understanding and collaboration of other stakeholders.<\/p>\n

\u201cOur situation is different from other developed countries as they have thriving enabling and friendly environment provided by the government through various policies.<\/p>\n

According to him, most of the commercial landlords have pending mortgage arrangements and will essentially require the inputs of the banks and other stakeholders at renegotiating loan repayment terms and conditions accordingly.<\/p>\n

He said: \u201cIt is generally believed that the government should also be able to intervene by offering tax incentives to these commercial landlords. The government can afterwards firm up the proposals through the enactment of legislation at the parliaments. This would spell out the framework and guidelines in determining the categories of tenants as beneficiaries of this tax holiday.\u201d<\/p>\n

Akomolede does not subscribe to the implementation of rent control. \u201cRent control at any time is a negative way of housing provision. It has never worked anywhere in the world. It will only lead to the black market. House owners will not bring them into the open market for fear of sanctions. It will discourage people from investment in housing, which will eventually lead to a lower supply of housing and results to higher rents.\u201d<\/p>\n

He stressed that rent control can lead to less maintenance of properties by landlords, which can lead to health and other social problems, adding, \u201cinstead of rent control, efforts should be made to increase the supply of housing that is the only antidote for high rents.\u201d<\/p>\n

Eboigbe said, there is a measurable degree of certainty of an impending crisis in the real estate sector triggered by the effects of the lockdown due to the outbreak of covid 19.<\/p>\n

His words: \u201cWith the various levels of interventions in other climes by way of enactment of emergency legislations to save the sector from collapse, it is now also imperative for swift intervention by the appropriate arm of government.\u201d<\/p>\n

He agreed that the state governments should provide eviction moratorium for residential tenancies. \u201cSince the outbreak of the virus, other countries through the appropriate agencies have similarly intervened in making sure no residential tenants are evicted from occupation on account of inability to pay rent to landlords.<\/p>\n

\u201cSome have granted three months and six months accordingly as job losses and delayed payment of remunerations is envisaged during this unavoidable lockdown. This is not aimed at rent cancellation but a specified time frame in favour of the tenants who should no longer be at risk of default judgment.<\/p>\n

In his submission, an urban regeneration expert and founder, Centre for Housing Studies, University of Lagos, Prof. Timothy Nubi, said lack of appropriate data for housing will hinder any government\u2019s initiative.<\/p>\n

Nubi said: \u201cWe\u2019re running a government that has no structure, system or record. But there has been an effort in the last few years, where our streets got named.\u201d<\/p>\n

He stressed that the government must embark on house numbering and inventory to ascertain the occupants in every neighbourhood, if it must embark on any palliative for landlords and tenants.<\/p>\n

\u201cIf we have a proper tenament rating system, it will not be difficult,\u201d Nubi added.<\/p>\n

The CEO of Northcourt Real Estate, Mr. Tayo Odunsi, disclosed that several scenarios will make the tenants not to pay rent due to the COVID-19.<\/p>\n

Firstly, where a blanket provision for such has been made in the tenants\u2019 contract. \u201cA clause advising that should any event stop the tenant from beneficially occupying the property, rent payments will not be made, must be in the tenancy agreement<\/a>.\u201d<\/p>\n

Secondly, the government for \u201coverriding public interests\u2019, may exercise its eminent domain powers to instruct private landlords to suspend rent. In such an instance, the government may find alternative media to alleviate the rent loss on the landlords by way of tax rebates\/deferrals or other compensation<\/a>.<\/p>\n

Another is on compassion grounds from the landlord. \u201cIn a case where a tenant has been a good sitting tenant and has a good relationship with the landlord, s\/he may be granted either a rent deferral or rent holiday for the period of the lockdown freely or upon request,\u201d Odunsi added.<\/p>\n<\/div>\n

Guardian <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

  Even before coronavirus struck, property owners and many of the businesses that leased their space … Property owners, tenants in peril as coronavirus hits rents, income<\/span>Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":10125,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_seo_schema_type":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[3],"tags":[4751,1398,63,12908,543,627,617,344,1442,684,414,604,3058,544,408,120,522,1007,1008,41,3126,70,818,84,857,12,3052,907,3053],"class_list":["post-10124","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property-owner","tag-amazing","tag-developers","tag-for-rent","tag-home","tag-home-buying-guide","tag-homeowners","tag-house","tag-housing","tag-in-housing","tag-lagos","tag-land-use","tag-loans","tag-location","tag-mesothelioma","tag-mortgage","tag-mortgage-loan","tag-nigeria","tag-owners","tag-private-property-owners","tag-property","tag-property-developers","tag-property-owners","tag-real","tag-real-estate","tag-real-estate-sector","tag-surveyor","tag-tenancy","tag-tenant","tag-tenants"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2020\/04\/Victoria-island-Lagos.jpg?fit=1280%2C720&ssl=1","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":6175,"url":"https:\/\/amazingproperty.com.ng\/blog\/why-monthly-rent-payment-will-not-work-by-experts\/","url_meta":{"origin":10124,"position":0},"title":"Why monthly rent payment will not work, by experts","author":"Amazing Property","date":"September 11, 2017","format":false,"excerpt":"An estate in Lagos, recentlyAmid the decision of the National Council on Lands, Housing and Urban Development (NCLHUD) to impose monthly rent payment on Nigerians, experts have urged the governments to tackle the inherent problems inhibiting housing rather than delving into issues expected to heighten problems in the industry.\u00a0\u00a0 \u00a0The\u2026","rel":"","context":"In "Opportunities In New Markets"","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"Lagos-estate.jpg","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/09\/Lagos-estate.jpg?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/09\/Lagos-estate.jpg?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/09\/Lagos-estate.jpg?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/09\/Lagos-estate.jpg?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/09\/Lagos-estate.jpg?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":3756,"url":"https:\/\/amazingproperty.com.ng\/blog\/opic-begins-mortgage-backed-affordable-housing-estate\/","url_meta":{"origin":10124,"position":1},"title":"OPIC begins mortgage-backed affordable housing estate","author":"Amazing Property","date":"April 24, 2017","format":false,"excerpt":"OPIC Managing Director, Mr. Babajide OdusoluPlans to remove barriers hampering aspiring home owners have been kick-started by the Ogun State Property and Investment Corporation (OPIC), with the launch of the first phase of OPIC\u2019s affordable housing units in New Makun City, Ogun State. 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