A Landlord's Guide to Tenancy and Recovery of Premises in Lagos

A Landlord's Guide to Tenancy and Recovery of Premises in Lagos

Most landlord losses in Lagos are procedural rather than substantive. The landlord is right about the rent, right about the breach and right about wanting the property back, and still loses eighteen months because the notice was wrong.

Recovery of premises is a technical area. The court is looking at whether the correct notice was served, on the correct person, for the correct period, in the correct form. A defect at that stage sends the landlord back to the beginning regardless of the merits.

## First establish which law applies

This is the step landlords and agents most often get wrong, and it changes everything that follows.

The Tenancy Law of Lagos State 2011 applies to premises across Lagos State, both residential and business, with specific exclusions. Four areas are expressly exempted from its application: Apapa, Ikeja GRA, Ikoyi and Victoria Island. The Governor may exempt further areas by order published in the State Gazette.

Property in those four areas is not ungoverned. A different regime applies, and practitioners generally treat the earlier rent control and recovery of residential premises legislation as continuing to govern them, since it was never expressly repealed. The interaction between the two regimes has attracted commentary and is not free from argument.

The practical consequence for a landlord is direct. A property in Lekki and a property in Ikoyi may require different approaches to the same problem. Establish which regime governs the property before you draft a single notice.

The Tenancy Law also does not apply to certain categories of premises regardless of location, including residential premises owned or operated by an educational institution for its staff and students, premises provided as emergency shelter, and premises in care, hospice, hospital or mental health facilities provided in the course of rehabilitative or therapeutic treatment.

## Limits on rent in advance

Under the Tenancy Law, it is unlawful for a landlord or an agent to demand or receive rent in excess of one year in respect of any premises from a new or prospective tenant. For sitting tenants, the limits are six months for a monthly tenant and one year for a yearly tenant. The prohibition operates on the tenant as well, so a tenant who offers or pays in excess of the limit is also caught.

Because the four exempted areas sit outside the Tenancy Law, these limits do not bite there in the same way, which is why multi-year advance rent remains common in the high value areas.

Lagos State has also issued directives concerning agency fees and the collection of rent beyond permitted periods. Landlords using agents should confirm the current position, as enforcement posture and stated caps have been the subject of recent government statements.

## Notice periods

Where the tenancy agreement specifies a notice period, the agreement generally governs. Where it does not, the statutory periods apply. Under the Tenancy Law the default positions are:

- Weekly tenancy: one week's notice
- Monthly tenancy: one month's notice
- Quarterly tenancy: three months' notice
- Half-yearly tenancy: three months' notice
- Yearly tenancy: six months' notice

Following determination of the tenancy, a seven day notice of the owner's intention to apply to court to recover possession is served before proceedings are commenced.

Two points cause repeated difficulty. The first is characterisation of the tenancy. Whether a tenancy is monthly or yearly is determined by the substance of the arrangement rather than by what the parties call it, and getting this wrong invalidates the notice. The second is the treatment of a tenant who holds over after expiry. The status of a tenant remaining in possession after the term has ended has been considered by the courts and the position should be checked against current authority before proceeding.

## Self-help is not available

A landlord who takes matters into their own hands converts a strong case into a weak one.

Under the Tenancy Law, a landlord who attempts to eject a tenant by demolishing or altering the building without court approval, or by threatening, molesting or forcibly removing the tenant, commits an offence carrying a fine or imprisonment. Locking out a tenant, removing a roof, disconnecting utilities or sending people to the property to apply pressure all fall into this territory.

Beyond the criminal exposure, the practical effect is that the landlord loses the moral high ground in front of the court and hands the tenant a counterclaim. Recovery takes longer, not less time.

## Documentation that prevents disputes

**A written tenancy agreement.** The tenant is entitled to request one. Draft it properly. Specify the term, the rent, the notice period, the permitted use, responsibility for repairs, the service charge basis and the consequences of breach.

**Receipts.** The law requires landlords to issue rent receipts. Beyond compliance, a clean payment record is the evidence you will rely on in any arrears claim.

**An inventory and condition schedule.** Photographed and signed at the start of the tenancy. Almost every dilapidations dispute turns on what condition the premises were in when the tenant took possession, and almost no landlord records it.

**Service charge accounting.** Where a service charge is collected, keep it accounted for separately and be able to show what was spent. Service charge disputes are increasingly common in Lagos estates and buildings, and landlords who cannot account lose them.

**Written communications.** Notices, demands and correspondence in writing, with proof of service. Verbal notice is worth very little when the matter reaches court.

## Registration obligations

Real estate practitioners in Lagos are required to be licensed by the state regulator, and tenancy transactions are subject to registration requirements. Landlords engaging agents should confirm the agent's registration status, and landlords managing a portfolio should take advice on their own registration position and on the registration of tenancy agreements, since requirements and enforcement have developed over recent years.

## A practical sequence for recovery

1. Establish which legal regime governs the property.
2. Establish the true nature of the tenancy and the applicable notice period.
3. Serve a valid notice to quit, correctly addressed and correctly served, and retain proof.
4. On expiry, serve the seven day notice of intention to apply to court.
5. Commence proceedings in the appropriate court.
6. Continue to document everything and take no step towards self-help.

Where arrears are the issue, consider whether a negotiated exit is commercially superior to a contested recovery. A vacant property recovered in three months by agreement is usually worth more than a judgment obtained in two years.

## The underlying point

Landlords lose recovery matters on procedure far more often than on merits. The investment that pays is made at the start of the tenancy, in the agreement and the records, not at the end when the relationship has already broken down.

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