In the past few months, due to COVID-19, the lives of many people have been markedly altered in ways that could not have envisaged in earlier times. Business conferences and staff meetings have migrated to virtual mediums due to the spate of closed offices and work-from-home mandates. These alterations have extended in a most injurious way to the nation's economy, evidenced in the sharp drop in global crude oil prices, naira inflation, job loss, and GDP contraction.

Many individuals have had to endure considerable salary slashes and many more have totally lost their means of living. The outfall of this is quite pronounced in the landlord-tenant sphere, with many tenants defaulting on rent, landlords growing increasingly impatient, and conditions suggesting that many tenants are doomed to keep on defaulting into the foreseeable future.

Both asset owners and tenants have endured drastically reduced operating income. Following the lockdown initiation in the country, many rental properties have seen high default rates. In a country where about 70% of her citizens live on about $2 a day, this isn't hard to imagine.

The economic downturn as experienced by landlords and tenants have been made worse by the ineffectiveness of the stimulus programs, and lack thereof, initiated by the Federal Government. While it has in the previous months been suggested that state governments should provide eviction moratorium for residential tenancies, as has been demonstrated by governments of many other nations, the lack of adequate housing data would have impeded any governmental initiative in that regard.

There have been friction between a number of landlords and their tenants, especially those whose rent elapsed during the nationwide lockdown. People on monthly tenancy are mainly individuals who depend on daily means of livelihood. This set of people have been the most hit as their income was completely disrupted by the lockdown. Therefore, the demographic that have defaulted on rental payment in the past months include people on monthly tenancy, and those on yearly tenancy who lost their jobs due to the downsizing that followed the economic downturn instigated by COVID-19.

The foregoing, however, might only be representative of outlier cases, considering that unlike what obtains in climes like the U.K., the United States and other parts of Africa where rents are renewed on a monthly or quarterly basis, the nature of tenancy in Nigeria often requires a one- or two-year rent advance. Yearly rent cycles in Nigeria, while the norm, is not legal in some regions. Example, Lagos Tenancy Law 2011 states that it is illegal for a landlord or his agent to demand or receive rent in excess of six months for a monthly tenant, or one year from a yearly tenant.

Going by the above, it would be fairly accurate to state that a large percentage of Nigerian tenants have not had to default on rental payment as a result of COVID-19. This does not imply that Nigerians on long-term leases who, incidentally, had made rental payments before the pandemic, would not be affected in any measure. It is projected that the effect of the pandemic and the ensuing lockdown on this set of tenants would begin to fully materialise at a future date, possibly by the fourth quarter of the year.

Tenants of commercial spaces who have had to close down businesses, even though they might have made rental payment prior to the lockdown, are almost certain to encounter difficulties in the renewal of their lease due to the loss of business revenue as occasioned by the pandemic.

The implication of this is that property owners are likely to suffer monetary crunches as renters default on payment, and with many renters, both of residential and commercial properties, projected to relocate to areas with relatively cheaper real estate.

In this same period, a number of tenants have faced painful threats of eviction due to protracted rental default. However, these tenants are most likely regular rent defaulters who had on account of to this lost the sympathies of their respective landlords.

A number of tenants with overdue rents, particularly those who share a cordial relationship with their landlords, have been able to reach an agreement with their landlords and have been granted rent holidays. But in the case of non-defaulting tenants who have been served a notice, the obvious cause might have stemmed from the landlords' desire to meet certain needs stemming from how the economic crunch of COVID-19 has personally affected them.

Another factor that has affected landlords is the lack of far-reaching governmental intervention as regards extension of mortgage loans for property owners. This therefore makes it difficult for a number of landlords to grant rent holidays to tenants.

Also, even before COVID-19, after developers have put out properties for lease, there is often the five- or six-month interlude before the houses get rented or leased. With the general economic effects of the pandemic, this wait is likely to extend to 12 months, and possibly more.

The final consequence is that investments in property purchase and construction are projected to significantly reduce in the months to come, particularly from mid- and low-income earners. Also, housing advocates have projected a disruption in major cities like Abuja, Lagos, Port Harcourt and Kano which is expected to force a sizeable reduction of apartment rents.

Last word:

Economic challenges affecting tenants due to COVID-19 have generated popular empathy due to wide publicity granted the issue from various quarters. Landlords, on the other hand, feel as much pressure but their own issues have neither been as vastly under-reported nor have any palliative measures been offered them by federal or state governments.

While landlords appear to have fewer options than tenants at this time, there are a number of strategies that landlords can employ. One option is to mediate with tenants to arrive a compromise that is mutually beneficial to both landlord and tenant.

Another option that would work with less cooperative tenants is for landlords to prepare for potential future litigation with tenants. While landlords may not be able to evict defaulting tenants, their rights can only be deferred, not denied.

In that connection, landlords should document in writing all interactions with tenants in attempts to remedy defaults. Once landlords can establish without reasonable doubt their valiant attempts to negotiate reasonable terms with a tenant while the tenant has not made any concessions to the landlord, this will result in the landlord getting everything they seek in a future legal action.