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EVALUATING THE PROBLEM OF RENT COLLECTION AS AN ASPECT OF RESIDENTIAL PROPERTY COLLECTION
ABSTRACT
Rent
is a periodic payment made to an owner of a property for the use of such
property. This payment is on the increase n modern times due to several factors
which includes increase in the price of goods, inflation and greed on the part
of landlords. Similarly, the collection of rent is limited by a lot of problems
which often results to rifts between landlords and tenants. However, these
problems of rent collection can be solved successfully, thereby promoting a
cordial landlord –tenant relationship. This study therefore seeks to achieve
this by identifying the problems of rent collection in residential properties
in Enugu, and make recommendations on how to solve these problems.
The
government overtime have put up measures to help ensure that the process of
rent collection is less cumbersome. These measures have come in form of rent
control edicts and recovery of premises edicts, as well as the setting up of
rent tribunals. These laws have been adopted by various states of the
federation, and modified to address the problems of rent collection peculiar to
their state. States such as Cross-River, Kwara, Anambra and Lagos State have
done this. These laws will be reviewed in this study, in order to arrive at a
better understanding of how these laws canbe used to address the problems of
rent collection in residential properties in Enugu metropolis.
Three
neighbourhoods have been selected for this study. They include: new Haven,
Obiagu and Achara Layout all in Enugu metropolis.
CHAPTER
ONE
1.0
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
Housing is one of the most basic needs of man second to food and followed by
clothing. As man continues to undergone changes from one stage to another, the
need for decent housing keeps arising. Increasing human population and
advancing technology have increased the need for housing. This need overtime
have been addressed through the provision of residential property by developers
who in turn collect rent from the tenants. Increasing demand for housing which
keeps rising above the available supply has given rise to hike in rental
price of housing, especially residential housing.
Housing as a basic need is being provided by the public and the private sector.
The private sector which is a major provider of housing do so at exorbitant
prices and employs various methods in collecting rents. However, the process of
rent collection in residential properties is marked by problems which often
lead landlords to take extreme measures to ensure that rent is collected.
Sometimes too, landlords and tenants do engage in long legal battles which
often times linger on over a long period of time.
Measures to address the problems of rent collection have been adopted by the
public and private developers. The government have enacted rent control edicts
and rent tribunals to help to ensure that rent collection issues are properly
handled with minimal disagreements.
Rent collection is a method of residential property management for both the
public and private providers of housing. It involves the collection of an
agreed sum of money after a specified period of time which could be monthly,
annually or bie-annually as the case may be. Rents collected on residential
property are used to manage the property and rehabilitate the property if
necessary. This helps to increase the life span of the property. Rent to be
collected on a property is usually subject to increment after an agreed period
of time in order to accommodate inflation.
Rent collection in Nigeria as well as in Enugu metropolis is the principal duty
of the provider of the housing. However, this duty most times is delegated to
other parties who collect rent on behalf of the owner. Such delegation is
usually made to Estate Agents, caretakers or any other representative who
engage in contractual agreements on behalf of the landlord both for rent
collection and admittance of new tenants. Estate Agents when acting on behalf
of landlords charge monthly or yearly fees for their services. These fees are
added tot eh rent payable by the tenant, further increasing it.
The government as a provider of housing have made several attempts to address
the issue of rent collection in Nigeria. Laws such as the rent control and
recovery of premises edict and other similar laws found in various states are
some of the measures taken by the government. The rent control edict has been
adopted by various states of the federation to reflect their peculiarities.
These laws cover areas such as fixing of rent, mode of collection and
increment.
Rent collection on government owned residential property has lesser problems
than that of private individuals. This is often the case because tenants
perceive the government as having the power and right to eject them from their
houses more than private individuals. Therefore, they easily comply with the
payment of rent without delay whether the price is high or not. The mode of
collecting rent from tenants by the government which is usually through
government agencies also help to reduce the problems of rent collection
on government owned residential property.
1.2
STATEMENT OF RESEARCH PROBLEM
The process of rent collection on residential property has a lot of challenges.
One of such challenges is delay in the payment of rent. Some tenants fail to
meet u ewitht he agreed dealine for payment. This could be asa result of delay
in the payment of wages by their employers, increase in rental price, the
effects of inflation, among other factors. Delay in the payment of rent often
results to the tenant being penalized by paying extra on the agreed rent. It
could also lead to legal battles between the landlord and the tenant, which may
lead to the forceful eviction of the tenant.
Another challenge of rent collection is in the area of regular increment. This
condition may arise when the interval for rent increment is not specified in
the ‘Tenancy Agreement’. This leaves the tenants at the mercy of shylock
landlords who increase rent at will. Similarly, when property owners delegate
their rights as landlords to agents who act on their behalf, these agents
charge service fees which are added to the rent price. This is usually
perceived as rent increment by tenants. In addition, most landlords do not give
enough time or even formal notice of increment to tenants. These problems
leads to delay in payment or even refusal to pay.
A third challenge is the absence of any signed document of agreement between
landlords and tenants. Such a document which should contain details on the
amount to be paid, when to pay, and whom to pay to, when absent can result to
problem when rent collection is due. The absence of a ‘Tenancy Agreement’ may
bring disagreements between the landlord and the tenants on whether rent should
be paid annually or monthly as the case may be.
Rent collection becomes problematic when the property in question belongs
to a family and the members are having disputes as to who rent should be
paid to. In addition, when the landlord and the tenant are engaged in legal
battle, the tenant may likely decline from paying rent until the matter is
determined. To achieve this, the tenant may device a means of making the case
to linger, during which rent is forfeited.
Other problems of rent collection arise from continuous inflation and increase
in the cost of raw materials which in turn increases the cost of rent.
1.3
AIM AND OBJECTIVES OF THE STUDY
The aim of this study is “To evaluate the problems of Rent collection as an
aspect of residential property management in Enugu”, with a view to making
recommendations on how to address these problems;
The following objectives will help in achieving the aim of the study:
1) To determine the methods of rent
collection by residential property owners in Enugu metropolis.
2) To determine the contribution of the
government in rent collection.
3) To identify the problems of rent
collection in residential properties in Enugu metropolis.
4) To make recommendations on possible
ways to solve the identified problems of rent collection in Enugu metropolis.
1.4
RESEARCH QUESTIONS
The following research questions will be answered during the study:
1. What are the methods of rent collection
in residential properties in Enugu?
2. In what way has the government
contributed to rend collection in Enugu?
3. What are the problems of residential
property rent collection in Enugu?
4. How can the problems of residential
property rent collection in Enugu be solved?
1.5
SIGNIFICANCE OF THE STUDY
This study on the evaluation of the problems of rent collection in Enugu
metropolis is especially significant considering the rising wave of tenancy
cases in law courts. This study will help to reduce tenancy cases by
identifying the problems of rent collection and proffering solutions to address
these problems. By reducing the number of rent-related suits in court, the
burden on the courts will be reduced and enough time devoted to other more
important cases.
The significance of this study can also be found in the area of reduction in
forceful eviction of tenants. This will result from a better understanding
between landlords and tenants. Furthermore, since rent collection is an
important aspect of property management, this study will enable property owners
to assess the best possible way of collecting rent. This will help to save time
spent on litigations and as well save resources which are scarce.
1.6
SCOPE OF THE STUDY
The scope of this study covers the problems of rent collection as an aspect of
property management in Enugu. However, emphasis will be placed on residential
properties in Enugu metropolis alone. This is because rent collection covers a
wide range of property types, and delving into these will make the study too
broad. Also, the study will cover the methods of rent collection in residential
properties in Enugu. Doing so will help in identifying the problems inherent in
them.
Furthermore, this study covers the contribution of the government to rent
collection in form of the various edicts, bye-laws and acts. Attempts will be
made to figure out areas where these contributions by the government to rent
collection can be employed to solve the problems of rent collection in Enugu
metropolis. Finally, recommendations on how to solve the problems of rent collection
in Enugu metropolis will be made based on the findings of the study.
1.8
OVERVIEW OF THE STUDY
This study deals with an evaluation of the probes of rent collection as an
aspect of residential property management in Enugu metropolis. In other words,
attempts will be made to identify the problems of rent collection as it
affects residential property. During the study, the methods employed by
landlords in the collection of rent for residential property will be aanlysed
with a view to determining the effectiveness of thee method. To achieve this,
the researcher will interview selected landlords, tenants and agents.
Furthermore, this study will evaluate the contribution of the government
to rent collection by looking at the various rent control edicts and
other laws on rent control. The main aim of the study is to evaluate the
problems of rent collection as an aspect of property management in Enugu
metropolis. Objectives such as; determining the methods of rent collection in
residential property, determining the contribution of the government to rent
collection, identifying the problems of rent collection were drafted to help in
achieving the aim.
Finally, this study is presented in five chapters. Chapter one contains the background
of the study, chapter two has the literature review and chapter three
contains research methodology. Chapter four deals with data presentation and
analysis, while chapter five covers the recommendations and conclusion.
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