RENT COLLECTION IN THE FACE OF ECONOMIC DOWNTURN

The Issue
In Nigeria, most sector of the economy has been gravely affected as a result of the impact of covid-19, as such many business organizations have not been able to generate income as anticipated in their revenue projections. This made some companies to lay off their workers, some engaged in pay cut while some had no choice than to keep owing salaries for up to three months.
Also, the inflation rate rose by 13.6% from 14.23% in November, 2020 to 16.47% in January 2021, this is traceable to the pandemic, lingering boarder closure, decrease in the supply of dollar, corruption, political instability, insecurities among others. These have made many Nigerians to struggle to meet basic human needs; housing, feeding, clothing, security, etc.
Just like other sectors, the property sector felt the heat of the economic downturn as many tenants couldn’t fulfill their obligations as signed in the tenancy agreement made with their landlords, on another hand, some landlords as well as some property agents increased the rent passing on their properties, also, there is an increase in construction cost which made property prices to be on a high side. This astronomical increase in the price of properties and rent passing on them without a corresponding increase in the income of business organizations and households has made it very difficult for landlords and their agents to collect rent on both commercial and residential properties.
The way forward
In times like these when property owners and their agents strive to demand for rent and tenants struggle to pay, there is a need to find common grounds between the parties involved to ensure that landlord-tenant relationship is not strained; landlords not being owed and tenants fulfilling their rent obligation as and when due. Landlords and tenants should be willing to shift grounds and accommodate new arrangements in rent collection and payment. Dolapo Omidire, a real estate researcher and director of Estate Intel once noted that Lagos property market is predominantly a landlord market whereby landlords have total say on their properties without tenants objecting them.
In Nigeria, rent collection is on a yearly basis, landlords and their agents must be willing to collect rent on short term basis; daily, weekly and monthly. Although some property owners have started considering this option especially in cities like Lagos, Porthacourt, and Abuja, yet, it is still relatively low. Considering short term rent payments may be a game changer as it will help landlords to get their rent on time and help tenants to reduce the burden of yearly lump sum rent.
Also, people especially young professionals can start contributing funds together to pay for house rent so as to reduce the rent payable by an individual, for example let’s say the rent of a 2-bedroom apartment is N500,000, two young professionals can secure the apartment by contributing N250,000 each, by that rent burden, they will be able to pay for subsequent rents.
Property agents should start investing on digital platforms that can help them to monitor performance of property portfolios, fast-track payment methods, maintain landlord-tenant relationship, and increase their level of productivity.
Conclusively, every party involved in the payment, collection, and remittance of rent should understand themselves, the economic situation, and must be committed to fulfilling their part of the tenancy agreement with upmost sincerity and should always settle issues amicably.

Ibukunolwa Adepoju