Many today have suffered the consequences because they are not aware of what they need to do before entering into a tenancy or lease agreement with the other parties.
What is tenancy
A tenancy is the possession of land or property for a specific period of time.
For example someone rents or leases a dwelling (such as a house) from a landlord for two years, such one is regarded as a tenant.
What is a lease
A lease is a contract outlining the terms under which one party agrees to rent property owned by another party. It guarantees the lessee, also known as the tenant, use of an asset and guarantees the lessor, the property owner or landlord, regular payments for a specified period in exchange. Both the lessee and the lessor face consequences if they fail to uphold the terms of the contract.
In this article, I will be discussing important factors you need to consider or bear in mind before entering into a tenancy or lease agreement
The tenancy/lease agreement must be in writing
A Tenancy Agreement is a contract between a Landlord and the Tenant which sets out the rights and obligations of both the Landlord and the Tenant when renting a property in Nigeria.
Before entering into any agreement, it is best to have a written and duly executed agreement. This would simply protect the interest of both parties especially in cases where disputes might arise during the course of the tenancy or lease.
This agreement is very important because it provides further protection for both the Landlord and Tenant, and it expands on the implied rights.
If you are a Landlord about to rent out your property, or if you are Tenant about to rent a property, it is advisable that you insist that there is a Tenancy Agreement.
Who creates the Tenancy Agreement?
In most cases, a tenancy agreement is created by the Landlord or their lawyer. As the Landlord is the owner of the property, they set the terms and conditions on which they want to rent their property and present this to the Tenant.
Rights of the tenants
As the Tenancy Agreement is a contract between two parties – the Landlord and the Tenant, the Tenant has the right to review the terms of the Tenancy Agreement to determine whether or not the Agreement protects his/her interests. Most Tenancy Agreements are straightforward and easy to understand; however, it is advisable where possible to get a lawyer to review the terms and advise on how they affect the Tenant’s current and future rights
it’s important this should be defined at the point of agreement to know if it’s a yearly tenancy, monthly tenancy or it’s a lease.
What a tenancy agreement should include
As a Landlord or a Tenant, you need to ensure that your Tenancy Agreement includes the following terms and information at a minimum:
This agreement must include important information such as names of parties entering into the tenancy/lease agreement, address of the property, commencement and expiration dates, amount to be paid as rent, rent review clause, rent renewal clause, mode of payment of rent, dispute resolution clause, obligation on who will pay taxes, utilities and other applicable amounts including legal fees, agency fees, security deposits, service charges/fees, etc as applicable, the obligations of both the Landlord and the Tenant, and an outline of bills the Tenant is responsible for.
As a landlord, be sure to state expressly in the agreement who will pay bills such as electricity bills, water bills, security bills, waste bill, and other levies, and as a tenant be sure not to take up unreasonable or excessive responsibilities
For example land use charge, who pays the land use charge (LUC). For yearly tenancy, landlord and tenant must reach an agreement on this as there is no writing law that expressly states who bears the cost. For leases of 10 years and above, the law provides that the leasee will pay the land use charge.it is advisable for tenant and land to reach a considerable agreement on the modalities of the payments.
A tenant should endeavor to find out if there is an encumbrance on the property. For example, is the property subject of ongoing litigation? Are there unpaid bills on the property like electricity bills, LAWMA bills, water bills that may be passed on to you? if yes, make sure to agree with the landlord on how those bills will be settled.
It’s important to ask questions to avoid surprises and future conflicts In order to be sure if there are no other charges which the landlord may have not disclosed during the period of the agreement which may later become a burden on you
When you come across a well-drafted tenancy agreement, you will come across more terms and conditions such an agreement must contain. So before a property is rented, it is important that a well-drafted Tenancy Agreement is signed by both parties as it is the most important document in the tenancy relationship.