By Mimidoo Patrick
Palpable fear, apprehension and tension now enveloped most tenants as
we enter the last quarter of 2020 due to the yearly tenancy/rent
structure renewal system of Nigeria.
The Coronavirus (COVID-19) pandemic is having a far-reaching impact on
all sectors of the global and Nigerian economy and the housing sector
is not left out. The spread has grounded economic activities with most people either losing their jobs or whose salaries have been slashed and are most
likely not able to pay their rents as planned.
Checks by Viewpoint Housing News revealed that Nigeria has one of the
most rigid rent payment systems in Africa as the majority of landlords
require upfront payment on apartments. This is despite the fact that
most tenants receive their income on a monthly basis.
Viewpoint Housing News gathered that over 60 percent of tenants may
not be able to pay their house rents in Nigeria as planned especially
with the recent fuel price hike as transportation fair would have
increased by motorists and the prices of household items increase as
well according to real estate experts.
This, according to the Director of Imani Group of Companies and a Trustees in the Real Estate Developers Association of Nigeria (REDAN), Mallam Suleiman Abubakar means that six out of every 10-renter will default in their rent payment or, at least, they will struggle to pay not necessarily because they don’t want, but because they cannot pay.
Abubakar said, this means that a lot of people cannot afford to rent
by themselves and the problem of upfront annual rent requirement has
also created a product gap that can only be bridged by one that can
split those payments into a monthly denomination.
He said, “At a time like this when coronavirus has almost brought
economic activities to a standstill in Nigeria and the world at large,
some landlords who collect rent on a yearly basis are expected to see
high default rates as some Nigerians have been projected to either
lose their jobs or have their salary slashed by their employers.
Another developer, who gave his name as Adebanjo said it is indeed
a trying time for the property market but the reason is not
far-fetched. “There is little or no economic activity going on
anywhere because of Covid-19 and so, people are not earning income as
much as they should.
“It is very important that renters get in touch with their landlords
as soon as possible if they feel they may not be able to keep up with
their yearly payments and we would encourage all landlords to be
constructive in their conversations with any tenants who are
struggling through no fault of their own during the current crisis.”
When Viewpoint Housing News spoke to some FCT residents on how they
intend to meet up with their yearly rents payment some expressed worry
over what they described as lack of income as they lamented that it
would be difficult to meet up with their tenancy agreement due to the
pandemic.
According to a resident who gave her name as Faith Adewale, 28 year
old said, “I moved to Gwarinpa late last year before the pandemic and
I work with a private company here in Maitama and the landlord didn’t
collect anything less than a year rent of N400, 000 for a Self-contained
apartment. “ But now my salary has to be slashed due to the COVID-19 pandemic and now my rent is due for renewal and am yet to gather the money for the
landlord because what I am paid at the moment cannot take care of my
needs so it will be difficult for me to meet up with the rent she
lamented.
Another FCT resident who newly got employed in the city center said he
has been squatting with his friend since last year when he relocated
from Edo State to Abuja as his rent budget could not cover for a
one-year payment.
Also, a construction worker with Julius Berger who resides in Mararaba
and identified his name as Mall Adamu Shehu said he was laid-off
during the lockdown in the site he was working due to the pandemic and
since then he has not been able to secure another job.
Shehu , who is a father of five said they now rely on what the wife
make from her petty trading for feeding and now that the his rent is
due he has pleaded with the landlord to give him time until he is able
to find another site where he can resume work.
However, some Civil Servants who spoke to Viewpoint Housing News on
the basis of anonymity said although their salaries have been regular
but they were been burdened by relatives who depends on them for
income and other family needs. They said plans to reopen schools across the country by the federal government, rents payment may have to be delayed for the sake of the children that will have to resume schools anytime soon.
For instance, in the outskirts of Abuja, a two-bedroom flat goes
between N350, 000 to N400, 000 per annum while a three-bedroom flat is
rented between N450, 000 to N500, 000. A self-contained goes between
N150, 000 to N250, 000. In the city centre, such as Karu, nyayan and
Kubwa the rents are quite higher.
Currently, some people are uncertain of their jobs and those that
depend on daily stipends or income cannot meet their obligations.
Renters have called for the government’s intervention and eviction
moratorium for residential tenancies.
There are also calls for homeowners to be given relief from banks like
a freeze on mortgage loans so that landlords can have extended loan
periods and suggestions for rent holidays for tenants to cushion the
effects of the pandemic. The experts said the gridlocked coronavirus economy have 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.
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. This is a clear indication that property owners could face cash
crunches as renters default and many renters will move in with family
and friends or relocate to less expensive locations.
