Lagos opts for monthly rent collection in 2022

The Lagos State Government has been proposing monthly rent payment and as the debate rages the authorities have revealed that it committed N5 billion into the monthly house rent scheme to ease the burden of yearly payment on residents.

The Commissioner for Finance, Dr. Rabiu Olowo, disclosed this at the closing ceremony of the second edition of Lagos Real Estate Market Place Conference and Exhibition which held at the Expo Hall, Eko Hotel and Suites, Victoria Island, Lagos State, with the theme: Lagos: 21st Century Real Estate Investment Hub.

According to the Commissioner for Finance, the initiative is part of the resilience policy of the current administration, which was agreed after a rental survey that found out that 88 per cent of tenants would rather pay their rent monthly.

“We had to pursue this by working with different relevant stakeholders and we now have a model that will work and enable Lagosians to pay their rent monthly. Landlords have nothing to lose because they will continue to receive their rent yearly and their default risk is zero,” Olowo assured.

He announced that the scheme will commence in January 2022 with the formal sector to enable them to minimise risk. He pointed out that the government was already looking into the informal sector to involve them into this programme but had to first begin with the formal sector to enable them to mimimise the risk level.

He explained that it is easier for the government to verify how much those in the formal sector earn and for them to know what they will get and how they will get it.

When we succeed on this, he said, “We will move to the informal sector. There is an insurance pack that helps us manage all of the risk. We have a data plan that helps us fish out defaulters.”

He noted that the government is working with stakeholders, especially financial institutions, adding that the platform is a social investment for the benefit of Lagos citizens and residents, and not a money making investment.

The Special Adviser to the Governor on Housing, Mrs. Toke Benson-Awoyinka, averred that the scheme will benefit landlords as they have their rent guaranteed and assurance of payment upfront, while tenants will also no longer have that burden of yearly payment of a huge amount of money.

Benson-Awoyinka, however, revealed that to come on board, tenants must meet the qualifications, which includes ensuring that they have the capacity to make the payments on a monthly basis.

She added that the scheme has come to stay and will be sustainable as several government policies have stood the test of time and are still working, adding that this would not be an exemption.

“With this initiative, we are able to enable tenants to pay monthly rent beyond properties built by the state government as we have in the rent-a-home scheme.

“We know we cannot enforce monthly rent collection on landlords but we have created a platform that will make monthly rent payment possible for tenants, when the system begins and runs fine, many more landlords will come on board.”

The Chairman, Lagos State House of Assembly Committee on Housing, Rasheed Makinde, assured that the legislators would not relent in enacting enabling laws to grow the sector.

Makinde said: “With what we are doing, every landlord will get his or her rent yearly and tenants at the same will have the capacity to pay their rent on a monthly basis. This platform will be demand driven because of the convenience of payment. People will be able to log into the platform to search for houses.”

The law maker highlighted that the initiative would also sanitise pricing of houses in terms of tenancy rate, stressing that this will be possible as the platform tells similar properties in similar areas within Lagos State that can either go for the same price or lower prices and people can shop for rent easily on the platform as well as rentals will be highly subsidised.

He described the initiative as a robust system that takes care of everyone as well as an intervention platform that will also fish out defaulters.

On her part, Managing Partner, Charlse Anthony LLP, Charlse Adeosun-Phillips, said it is a social welfare programme and it’s a win-win for government, financial institutions and all stakeholders.