Land Use Act: Tenancy rate to skyrocket, ERCAAN warns Lagosians

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By Adewumi Ojo

The body responsible for the regulation and tenancy rate charge in Nigeria, Estate Rent and Commission Agents Association of Nigeria (ERCAAN) has thrown a bombshell towards the newly repealed 2001 Land Use Act Charge admitting the law will see an increase in tenancy rate in the state.

According to the law which a repeal of 2001 Land Use Act is metamorphosing it into 2018 Land Use Act charge is to consolidate all property and land based rates and charges in Lagos state.

It further indicates that owners and occupiers holding a lease to a property for 10 years or more are now liable to pay the annual Land Use Charge invoice charged on any such property.

It also means that market value of each property will be required to be reviewed every five years by the state commissioner for finance which will be based on information provided by professional property valuers certified by the state government.

Furthermore the law also stipulates that defaulters who fail to pay the charge between 45 to 75 calendar days will pay 25 percent, 50 per cent for defaulters of 75 to 105 days and 100 percent for defaulters of 105 to 135 days.

Where the Land Use Charge demand is not settled within 135 days of the tax payer’s receipt of the Demand Notice, the state government is authourized to appoint a temporary receiver to administer the property until all outstanding taxes, penalties and administrative charges are paid.

With this position of the new law, outrage has followed the development from civil organizations and professional bodies as they call for its reversal with some of them also describing it as anti-human law aimed at frustrating the people.

Speaking with Nigerian NewsDirect, the chairman of Estate Rent and Commission Agents Association of Nigeria (ERCAAN) Lagos State chapter Hon Godwin Alenkhe, argued that the state government took the review of the law into place without proper consultation with relevant stakeholders that will help in bringing ideals that would have made the law viable.

He disclosed to Nigerian NewsDirect that the new law would put pressure on rental property owners which will force Property owners to increase tenancy fee in the state.

Hon. Godwin further posited that  current socio-economic situation of the country makes the timing of the passage of the law wrong, admitting that it should have been done gradually with application and consideration of the difficulties of people in accessing homes.

He said the situation will further compound the woes of the effect of housing deficit which still currently stands above 17 million.

He called for the suspension of the law and immediate involvement of relevant bodies that would help drive in an acceptable Land Use charge that would benefit both state government, professional bodies and the populace.

“There’s going to be increase in the tenancy fee, because house owners after paying such land Use Charge will definitely put more price on house rent in order to meet up with the demand of the government. Paying more for the government will pump pressure on rental property to take a stiff decision that will make tenancy rate skyrocket.

“Though the argument of government is that there are accumulated arrears and when the summation is done that is what brings about the 400 percent, but people are saying they cannot have this.

”So this is supposed to be a gradual process. The mistake of the government is because they are calculating for years by saying because one settlement has not been done for certain years. This should have been a gradual thing.

“With this development, many people will be driven out of Lagos, we are going to see a lot of people sleeping under the bridges, with the LUC, and I’m beginning to see close to a million naira house rent for a house that ordinarily will only take N200,000 to N300 thousand for just a year rent.”

However, the state government has disclosed that it’s ready to dialogue with relevant authorities in order to reach a compromise on the heated issue.

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