Impact of COVID-19 Pandemic on Tenancy Agreement: The Lesson from an Emerging Rental Housing Market in Nigeria

Abstract

The study aimed at evaluating the contents of tenancy agreement entered into between lessors and lessees in Osogbo, Owode-Ede and Ede Metropolis in Osun State (Nigeria) from 2011 to 2020 in order to determine its adequacy in the face of the Post-COVID-19 pandemic in Nigeria. A questionnaire survey approach was adopted to achieve aim of the study. Findings of the study revealed steady dwindling of rental market transactions with deteriorating landlord/tenant relationship caused by disagreement on tenancy agreement related issues leading to default in rent payment, rent review period and renewal. Findings also indicated a low ebb experience in the rental market due to the economic downturn resulting from, among other factors, the lockdown policy, which impoverished Nigerians to the extent of struggling to make ends meet. The study further found that 86.3 % of the tenancy agreements were inadequate in content and execution as basic tenants’ remedial provisos were not included in most of the agreements. The study provided pertinent information that could be used as baseline information for tenancy agreement preparation, enhancing landlord (lessor) and tenant (lessee) relationship, and guiding rental real estate investment decisions in Nigeria.

Analysing the Implications of Work-From-Home Covid-19 Restriction Measure on Residential Property Management: Evidence From Lagos Rental Housing Market

“…This cons tutes a major gap in local literature and remains the primary focus of this study. For instance, Ankeli, et al (2021) work tries to know the trends of ac vi es in the housing rental market in the post-Covid-19 era. The study surveyed the opinions of the prac sing estate surveyors and valuers in the Osogbo property market and discovered that default and difficul es of property inspec ons as the prominent challenges characterised by the real estate market in the postpandemic period.…”

“…According to a report by Economic Commission for Africa (ECA, 2020), African countries are expected to experience many significant effects of the Covid-19 pandemic in revenue decline, job loss and decrease in produc vity. In Nigeria, Andam, et al (2020) discovered that for 8week of lockdown (March-June, 2020), the country's agro-food sector recorded a decline of 11% and a 9% increase in the na on's poverty level In the Nigerian real estate sector, a few local studies have inves gated the impact of the Covid-19 economic hardship on the Nigerian property market at different capaci es (Fateye et al, 2021;Ankeli, et al, 2021;Oyedeji, 2020;Olanrele & Thon eh, 2020). Some authors examine the impact of the Covid-19 lockdown on specific areas of the property market.…”

“…Some authors examine the impact of the Covid-19 lockdown on specific areas of the property market. For instance, Oyedeji (2020) examined real estate market transac on (agency) in Lagos, Ankeli, et al, (2021) focused on Osogbo rental property market while Fateye et al, (2021) used shared office space in Abuja as a case study. Olanrele & Thon eh (2020) and Keke et al (2020) assessed the effect of the pandemic on the general Nigerian real estate sector.…”

Does the COVID-19 affect tenants’ adherence to lease obligations in rental market? Property managers’ perspective

“…Between late 2019 and December 2021, the coronavirus disease 2019 (COVID-19) wreaks much havoc in Nigeria, resulting in tenants lagging in sustaining tenancy obligations (Oyedeji, 2020; Ankeli et al , 2021). It also creates a gap in the housing sector and its management policies in Nigeria.…”

“…In Nigeria, typically, renters are obliged by the terms of their leases, such as the requirement to pay on time and to keep or not to keep animals/pets, and the obligation not to create any structure or alter the property (Gbadegesin et al , 2016). Within 2020 till date, when the COVID-19 broke out and spread, the study by Ankeli et al (2021) drew attention to tenancy breaches, unusual rental defaults in the property market and other unspecified rental market crises in the developing market. This supports the assertion that commercial real estate investment and tenant management practices experience disruptions caused by the pandemic's restrictions on the market (Mattarocci and Roberti, 2020).…”