Unpaid Ground Rent: The ticking time bomb for government estate
By ESV OLUFOKUNBI, Olabisi Esther – HND, Bsc, ANIVS, RSV (Oyo State Housing Corporation)
Consequent upon the promulgation of Land Use act of 1978, there are no land owners but land holders, because all lands belong to government including lands in villages, communities and inherited/ancestral lands. All lands in Nigeria are vested on the governors of states in Nigeria and the Governors hold the lands in trust for the benefit of all Nigerians. As a result of this, all lands allocated by government or the ones with registered title are subject to payment of ground rent as every land owner has become a lessee. Ground Rent is a tax charged and collected by a State Government on land (both developed and undeveloped) that was granted by the state government or rent paid under the terms of a lease by the owner of a building to the owner of the land on which it is built. Section 13 of the Land Use Act 1978 states that:
(1) The Governor may, in accordance with the provisions of this Act, require the payment of ground rent for any land held under a customary right of occupancy or a statutory right of occupancy
(2) The amount of ground rent shall be determined by the Governor and shall be payable annually in respect of each parcel of land.”According to Section 15 of the Land Use Act 1978, the consequences of not paying ground rent are:”
(1) If the ground rent is not paid in accordance with the provisions of this Act, the Governor may serve a notice on the holder of the right of occupancy requiring him to pay the ground rent within a specified period.
(2) If the holder of the right of occupancy fails to comply with the notice served under subsection
(1) of this section, the Governor may revoke the right of occupancy
(3) Where a right of occupancy is revoked under subsection
(2) of this section, the land shall be forfeited to the State and the Governor may grant a new right of occupancy over the land to another person.”When ground rent is unpaid, the implications to the part government may include:
1. Revenue Loss: Unpaid ground rent can lead to decreased revenue for governments that rely on these payments for funding services and infrastructure
2. Legal Actions: Governments may need to initiate legal proceedings to recover unpaid ground rent, which can be time-consuming and costly.
4. Administrative Burden: Tracking unpaid ground rent and managing collections places an additional administrative burden on local government resources
5. Community Relations: Persistent issues with ground rent payments can lead to tensions between residents and government authorities, potentially impacting community relations
6. Policy Revisions: Governments may need to reassess their policies regarding ground rent to encourage timely payments.Overall, while ground rent is a relatively small aspect of property management, its non-payment can lead to broader economic and administrative challenges for government entities.
