LANDLORD AND TENANT RELATIONSHIP AS A FACTOR AFFECTING PROPERTY MANAGEMENT

LANDLORD AND TENANT RELATIONSHIP AS A FACTOR AFFECTING PROPERTY MANAGEMENT

ABSTRACT

This study examined the landlord-tenant relationship in residential property management in selected housing estates in Ikeja, Lagos. This was with a view of conducting detailed examination of such relationship and determine if there are disputes and their causes. The approaches that parties in disputes adopt in resolving them and the level of responsiveness of landlord and tenant to their responsibilities in the tenancy agreement were examined. In attaining the aim of the study, data was obtained   from   primary   and   secondary   sources   included   journals,   textbook, unpublished past projects, and internet. The population of residents was based on total number of households in the three selected estates, sample was thereafter randomly selected. Descriptive and Relative Importance Index analysis were used to analyze the questionnaire Furthermore, the relationship between provisions in the tenancy agreement and dispute resolution was determined.  It was recommended that complaints should be dealt with internally or at a local level wherever possible and there should be set procedures for monitoring and reviewing shortcomings in service provision so that landlord-tenant relationship could aid investors in harnessing investments in real estates.

CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

Landlords,   tenants,   and   Estate   Surveyors   and   Valuers   may   be   regarded   as stakeholders in a leasehold system and as a result of dealings amongst them, disputes sometimes occur.  The management contract formalizes the relationship between the property owner and the manager, while the lease sets up the rights and obligations of the landlord (owner/manager) and tenant. Usually, the relationships between the stakeholders are formalized such that specific rights and responsibilities of parties are spelt out. In respect of this, Kyle (2005) opined that the laws regulating leases demonstrate to the landlord and tenant the character of their relationship and as such must be clearly understood by the property managers, especially those covenants that directly affect the jurisdictions in which they operate.

In the opinion of Thorncroft (1976), the legal arrangements that provide frameworks for the landlord – tenant relationships are important and expected to be established properly, although they cannot substitute for dynamic working relationships that have the potential of bringing real prosperity and well-being to both parties. The success of estate management through lease control for that reason depends firstly on the terms of the lease; and secondly, on the way they are implemented. In consonance with Thorncroft (1976), Morgan (2005) stated that although lawyers are responsible for legal and technical details of transactions involving the parties to a lease, property managers are expected to be familiar with the basic provisions of the leases. Making an allowance for disputes, which cannot be entirely avoided and disagreement, which constitute the bulk challenge of managing income- generating properties by the Estate Surveyors and Valuers.

The property manager usually has the responsibility for leasing real estate in accordance to the terms of management contract, but his duties does not stop at that as he cannot avoid inconsistencies in the relationship between the landlord and tenant, which are a common occurrence in the renting process. However, such differences could be avoided if parties become aware of the rights and responsibilities ensued to them under the lease. This coupled with being open and having clear understanding of each other’s objectives for the long and short terms can remove uncertainty, build confidence and trust, and in the main prevent conflict (Aina, 1998).

Alluding further to this, Maxwell (2003) stated that developing and maintaining good working relationships between property owner and tenant is one of the responsibilities and priorities of a property manager, this being crucial to successful achievement of the aspirations and objectives of all parties. Consequently, understanding the relationship between the property owner and tenant is germane to successful management of real estate without which the stakeholders may not derive maximum benefits from their investments.

With this at the background, a study that attempts to examine and identify the issues and relationship that exists between landlords and tenants in the management of residential properties, with a view to attaining peaceable enjoyment of the return on the  investment  in  real  estate  by  the  stakeholders  is  relevant  and  will  afford  the opportunity to determine the challenges and find ways of resolving them. Towards this end, selected purpose-built residential estates in Ikeja, the capital city of Lagos State in Nigeria was used as case study.

1.2       Statement of Research Problem

Shelter is ranked second in the hierarchy of human needs, being the most important after food in order of importance for survival; Nigeria, the most populous country in Africa and the eighth most populous country in the world, is facing serious housing challenge. While  specifically  in  Lagos,  60%  of  residents  are  tenants leaving  housing  demand  to  an  estimated  figure  of  approximately  2.17  million annually. Most of the existing accommodation units are provided by private investors, and  tenants  have  to  pay  rent  as  high  as  50-70%  of  their  monthly  incomes. Furthermore, in the opinion of Landlords and Tenants Rights Initiative (2010)  rented apartment is the first home away from home to many Nigerians, and millions of them either out of choice or necessity live in rented homes all their lives, while other thousands act as landlords, leasing one or more units to renters. However, many unfortunate ones suffer untold hardships in the hands of greedy and wicked landlords who employ different tactics including self-help to eject them when they fail to meet absurd and perverse increments of rent and these tenants needlessly suffer grave hardships for lack of knowledge of the protections which relevant laws confer on them (Moneke, 2009).

The relationship between landlords and tenants is not usually on equal footing, and disparity in power is exposed when there are disputes: landlords have the power to agree to resolve them, while tenants can merely ask; and unfortunately, a lot of landlords often treat their tenants with disdain. They try to run the relationship in many instances (Itoje, 2010).

Consequently, a number of questions have risen as a guide to attaining the aim and objectives of this study; the questions are:

(i)        What kind of relationship exists between the landlords and the tenants in the study area?

(ii)       What  is  the  level  of  responsiveness  of  landlords  and  tenants  to  their responsibilities in the tenancy agreement?

(iii)      Are there disputes between the landlords and tenants, and what are the causes of such disputes?

(iv)      What are the approaches adopted to resolve such disputes?

1.3       Aim and Objectives of Study

The aim of this research is to examine landlord and tenant relationship as a factor affecting property management. This is with a view of identifying and resolving the challenges facing the management of residential properties. Specifically, the objectives of the study are to:

1. Examine the relationship that exists between landlords and tenants in the study area.
2. Examine   the   level   of   responsiveness   of   landlord   and   tenants   to   their responsibilities in the tenancy agreement
3. Determine if there are disputes arising from relationship and causes of such disputes.
4. Discover the approaches that parties in disputes adopt in resolving them.

1.4       Significance of the Study

This   research   seeks   to   examine   a   dimension   of   challenges   encountered   in management of residential properties, especially as it relates to the relationship between property owners and occupiers.

This study essentially will assist the Estate Surveyors in developing constructive and profitable relationship between property owners and tenants in the study area. The findings will assist them deal with disputes, embedding good practice to prevent misunderstanding amongst parties and ensuring that residential property management actually  attains  its  basic  goal  of  giving  value  to  owners,  tenants,  and  ensure sustainable professional practice. The findings will assist Estate Surveyors, landlords, tenants and their respective solicitors in defining relationships amongst them as everyone has a role in successful management of real estate and all would benefit from developing and agreeing precisely what those roles are. This should then move onto responsibilities, setting the boundaries within which individuals have to act.

It will be beneficial to lawyers, especially real estate attorney’s that are fully involved in resolution of landlord-tenant disputes on a regular basis. This is in addition to the roles that statutory agencies can play through regulation, inspection or an ombudsman in directing landlords and tenants to resolve disputes in a manner enunciated in this study. Essentially, these will become a great contribution to the successful management of residential properties and furthermore great contributes to knowledge.

1.5       Scope of the Study

The research is limited to examination of the landlord – tenant relationships in Ikeja, Lagos State, which has experienced ever increasing migration of people in pursuit of greener pastures thus making the quest for securing decent accommodation in cities such as this a herculean task (Moneke, 2009). Attempt is therefore made to focus on the relationship between landlords and tenants with emphasis placed on residential properties in the study area. The reason adduced for this is that although a lease can be on different types of properties such as commercial, industrial, agricultural, etcetera, focus on one type of land use will afford an in-depth and less random study.

According to Oni and Durodola (2010), residents of low income residential properties are more quarrelsome and have high propensity to have misunderstandings unlike high income housing estates where there are less direct contacts amongst residents and lower rates of conflicts. A study on medium income residential housing estates will explore a new dimension of the statement to distinguish whether it is valid in this environment or otherwise. Consequently, a study on disputes between the property owners and tenants has become important as divergent to one between tenants and co- tenants. In doing so, the medium income housing estates were selected for the purpose of the research.

1.6       Limitations of the Study

Centering the study on Ikeja only has introduced geographical limitation while sectorial limitation is introduced by focusing on residential rental property only. Another difficulty that might be faced in the course of administering questionnaires is that tenants and landlords might not be comfortable or exactly truthful with disclosing information on their behavior and conducts towards one another, especially if they are ill-mannered in the true sense.

1.9       Definition of Terms

Landlord: A person or organization that owns property that is rented to tenants

Tenant:  Somebody who rents a building, house, apartment, plot of land, or piece of property for a fixed period of time.

Real Estate:  land including all the property on it that cannot be moved and any attached rights

Property Management: It involves managing landlords-tenant’s relationship

Covenant:  a formal and legally binding agreement or contract such as a lease, or one of the clauses in an agreement of this kind.

Lease:  A Lease is an agreement that creates an estate in land.

Lease Agreement:  It is a legal entitlement or agreement. Tenants and landlords are bound either by an oral or written agreement in a lease.Landlord- Tenant Covenants:  A lease is a form of contract and so will contain a series of undertakings by the parties which are known as covenants because it is by deed.