New Tenancy Scheme by LASG
Lagos State government had announced, in December 2021 that all modalities for the commencement of a monthly rent payment scheme will commence in January this year.
Special Adviser to Governor Babajide Sanwo-Olu on Housing, Mrs Toke Benson-Awoyinka disclosed this during a discussion session on Rental Policies at 2nd Lagos Real Estate Market Place Conference and Exhibitions which took place at Eko Hotel and Suites, Victoria Island, Lagos.
According to Awoyinka, the new initiative will greatly ease the burden of yearly payment on residents, assuring that landlords will, however, get their annual payment of house rent upfront, while tenants will no longer have the burden of yearly payment of a huge amount of money.
She said, “Tenants can therefore use the yearly payment for other forms of investments or payment of school fees as the burden of payment of yearly rent is taken away from them completely. So it is a win-win social investment scheme, it is a good one and it is applaudable. Also, tenants interested in the scheme must be able to meet some requirements which include the capacity to make the payments every month, stressing that the scheme will begin with those in the formal sector with monthly income after which the informal sector will be brought on board.
Corroborating her, Lagos State Commissioner for finance, Dr. Rabiou Olowo, said that what made policy important is its impact on society. “We did a rental experience survey and we found out that 88 per cent of Lagosians would rather pay their rent monthly. At that point, we felt that it was an important policy for the Lagos government to conceive and Governor Babajide Sanwo-Olu immediately keyed into it. The solution will create resilience throughout Lagos. It is going to bring a lot of relief for tenants.
“We worked with lots of stakeholders, including landlords, tenants, lawyers, financial institutions. We came up with a fit of purpose structure that would enable us to launch a monthly rental model in Lagos. As part of putting it together, we have gone through a lot of risk analysis and risk evaluation to look at how it would work. We have met with a lot of stakeholders like: Landlords, tenants, lawyers, agents, we have financial institutions and we also have technical advisers that will come up with a purpose structure that will enable us to launch a monthly rental model in Lagos.
Castles Lifestyle reached out to Mrs Toke Benson-Awoyinka for further clarifications on the policy. She disclosed that landlords and house owners have nothing to fear concerning the new monthly rental policy that will kick off in January 2022.
She said, “I can assure you that landlords have their rents guaranteed and are going to be paid their yearly rents as at when due without fear as long as their properties are insured and inhabitable condition.”
This extraordinary policy by the Government will definitely have a massive impact on the market. Obviously tenants will benefit from it as it will help their cash flow but will it have side effect of increasing rents? This is definitely something to watch out for this year.