Introduction

Price control is usually a form of limit imposed by government on how high a price that

can be charged on a good and service that are essential to the well being of citizens can go. It is

imposed in that a ceiling is placed on the amount that can be charged and usually at a figure

below the open market price, which is a price at which a willing and able seller and a willing and

able purchaser of such good or service will exchange money and the good or service without any

compulsion on the parties as to sell or to buy. The same principle is applied to rent on property,

in which government usually imposes a limit to which rent, in this instance, on residential

accommodation could rise. The limit represents the maximum rent which is usually below the

open market value of such accommodation units.

Rent control is standard ceiling placed on the rent that a landlord can charge. It also

allows a landlord to set rent free ly when letting to a new tenant but subject to the tenant's right

not to accept and preventing the landlord from rai sing the rent or ejecting the tenant

(Basum and Emerson, 2003). Ccompared with other government-mandated price controls, it is

the law placing maximum price on what landlords may charge tenants and usually set below that

which would have otherwise ptevailed (Block and Olsen, 1981). Rent control is also a collection

of laws regulating how much a landlord can rai se or to how much must the rent be reduced,

limiting the reasons for eviction and working together with eviction protections so that the

landlord does not get around a rent limit by evicting the tenant

(Carlson, 2006).

Rent control sometimes functions as price ceiling. This is exemplified in the United

States of America where there are laws or ordinances that set price controls on the renting of

residential housing. It was first adopted in the U.S.A. in response to World War II-era shortages,
and remained in effect in some cities with large tenant populations. Such large cities are New

York, Washington, D.C. , San Francisco, and smaller communities like Santa Monica, Berkeley,

West Hollywood California, and a number of small towns in New Jersey, apart from cities like

Boston and Cambridge, and Massachusettes where it was stopped by state ballot (Wikipedia,

2007).

Rent control is usually an intervention through measures put in place by government on

the pretext of protecting the urban dwellers from being pushed off the open market in the course

of securing accommodations by putting a ceiling on the maximum rent payable on all classes of

residential properties. Such measures include legislation on to check incessant and arbitrary

increases in rent brought about through the interplay of demand (which rises at geometric rate)

and supply (which rises at arithmetic rate} of residential accommodation thereby causing

galloping increase in rent from year to year.

HISTORICAL BACKGROUND OF EKITI STATE

Ekiti State is in Southwest region of Nigeria, declared a state on 1 October 1996

alongside five other states in the country by the then military government under head of state,

General Sani Abacha. As one of the newest states of the Nigerian federation, it was carved out of

the territory of old Ondo State, and covers the former 12 local government areas that made up the

Ekiti Zone of old Ondo State. On creation, it had 16 Local Government Areas (LGAs), having

had an additional four carved out of the old ones. Ekiti State is one of the 36 states (inc. Federal

Capital Territory (Nigeria)) that constitute Nigeria and is reputed to have produced the highest

number of professors in the country. With a single town in Ekiti State, Okemesi, reputed to have

over 30 professors, several pioneer academics also hail from the state, including Adegoke

Olubummo (one of the first Nigerian professors in the field of mathematics) and Ekundayo

Adeyinka Adeyemi (first professor of architecture in Africa, south of the Sahara). Other

professors from the state include J. F. Ade Ajayi, Niyi Osundare, Sam Aluko and Prof A. A.

Agboola.

Ekiti is a state in the south-western region of Nigeria. Its name came about as a result of

the large number of hills it possesses, around which much of its population resides. It is also

notable for its achievement of producing the highest number of professors in Nigeria. It has a

number of major rivers and is naturally endowed with mineral deposits and agricultural

resources. The state is also home to some tourist sites, such as the Ikogosi Warm Springs and the

Ipole-Iloro Water Falls.

EKITI STATE MAP
Rent control and Recovery Possession laws

Prior to the advent of the rent control in Ekiti State, the Ekiti urban poor and low income

earners were at the mercy of shylock landlords who often resorted to taking court order through

the back door without serving the tenants proper notices so as to force out the tenant without due

process of law. This is called jankara judgment (in Ekiti parlance).

Many of the landlords increased rent on an annual basis and at high rates, demanding advance

rent of up to two years, even from a sitting tenant, not minding the unsanitary conditions of such

accommodation units.

Consequently, in 1997, the then military administrator of Ekiti State signed into law a,

which is cited as the Rent Control and Recovery of Residential Premises Law No. 6 of 1997

(also called Rent Law) with effect from the 21st day of March 1997. The most striking provision

of the law is the involvement of Estate Surveyors and Valuers in determining the standard rent

payable on residential accommodation in each of the zones into which Ekiti State has been

delineated and stipulated in relations to size of room, number of rooms, facilities provided, and

locations. . ·

The aim of this paper is to examine the provisions of the Ekiti State Rent Control and

Recovery of Residential Premises Law No. 6 of 1997 and values of residential properties. The

objectives are to highlight the relevant provisions of the Law, and determine if the rent control

has effects on the open market values of residential properties in Ekiti state.
Challenges

In Ekiti State, Edict No. 3 (1984) established the Rent Control. In almost all the States of the

Federation the Rent Control Laws and the Recovery of Premises Laws have been merged and

called Rent Control and Recovery Premises Law.

The Rent Control aspect of the law has been ineffectively operated, because what subsists is the

Recovery of Premises. In order to regulate the relationship between the landlords and tenants,

eradicate illegal ejection of tenants prevent arbitrary inflation of rents and unlawful holding over

of the demised premises by the tenants, the Rent Control and Recovery of Premises Laws have to

be updated from time to time14. In Landlord and Tenants relationship the tenant is in a much

weak position and exploitative landlords capitalize on this hence the need for this law. In Oduye

vs. Nigerian Airways Ltd, Oputa JSC summed up the social policy behind Rent Acts thus: …the

general principle of the Rent Act has always been to guard against the social and economic evils

generated by shortage of housing, agreed and rapacity of some landlords who increase rents and

try to evict tenants who refuse or are unable to pay higher rent demanded15.

Even though this law exists, it can be likened to a theory on paper because the reality is that the

law respects our freedom to enter into contract agreements and will usually not intervene in a bad

bargain in favour of the landlord. Who is a landlord? In the feudal system, a lord so called,

would own a land and his tenants became his vassals. The feudal lord had dominion over the

land and the produce together with the vassals living on that land. The vassals were then required

to swear to an oath of allegiance to the lord, as if a monarch. The landlord could eject his tenant

as and whenever he wishes, he could change and alter the rent at will; and could impose any

terms on the tenant.

The purpose of rent control is to ensure that a city has a certain amount of affordable housing for

lower and middle class residents. In fact, the primary advantage of rent control occurs for

tenants. Besides paying an affordable rent, they can predict what rent will cost in future and

budget accordingly without the fear of a sudden increase that may make living in an apartment

unaffordable. The rent control system creates artificial scarcity by encouraging tenants to remain

in their apartment it also creates incentive for illegal rental practices such as unauthorized

subleases that tenants use to make a profit by renting their apartments to new tenants for more

than they already paid the landlord under rent control.The striking thing about Landlord/Tenant

relationship is that the tenant is always at the receiving end. Some landlords make amorous

overtures to the wives of tenants, if the tenants protect they are given quit notices. In some cases,

children of landlord/landladies continually try to have home affairs with the wives/children of

tenants, if the problem comes to lime light the resultant effect would be quit. Even quarrels

between tenant’s wife and landlord wife have the tendency of leading to the tenant been

brandished with quit notice. Governments (State and Federal) have promulgated various laws to

curtail, the excesses of these landlords. These laws include the Recovery of Premises laws, the

Rent Control and Recovery of Premises Laws, etc. One of the latest of these laws have been

enacted by Rivers State and Plateau State.16 The control and regulation of the increase of rent is

one main purpose of the Rent Control of Recovery of Premises Laws in Nigeria. This control is

usually with respect to the residential premises. The restriction makes it harder for the landlord to

be at liberty to demand and receive rents of any amount at any time he chooses.

In as much as there is variation in rent charges depending on the quality of accommodation,

nature of landlord and area of the place of the house, the Rent Control and Recovery of Premises

Laws have intervened to restrict the right of the landlord in the areas of the maximum rent he can
receive as rent for his premises, how much of the rent he can collect in advance, and how and

when he can increase his rent. In fact the statutes applicable to various states of the federation

have made express provisions regarding the control and regulation of rent and with the necessary

sanctions against a landlord who violates the provisions.17 The statutory restrictions begin with

the fixing by law of what is called “the standard rent” for certain areas or types of

accommodation as classified by the law with powers vested in the Governors of a State to vary

this.18 The Rent Tribunals also have powers on the application of the landlord or the tenant, to

determine, the standard rent payable for the particular premises taking all necessary factors into

consideration.

Prospect

With this, a landlord is statutorily restricted from deciding what rent to charge, except he charges

a rent lower than the standard rent fixed by law or has an order of the court increasing the rent

payable for his premises19. A landlord is equally restricted by law as to how much of the

standard rent, or the less of it, he can demand or collect in advance. In most of these laws, the

landlord can only receive rent in advance of three months in the case of individual tenants, and

twelve months in the case of the commercial or institutional tenants. It is unlawful and an

offence for any landlord to demand rent in advance beyond the limits prescribed by law such a

landlord will on summary conviction be liable to a term of imprisonment or fine or both. It is

also an offence punishable on summary conviction with a term of imprisonment or fine or both

for a tenant to pay rent in advance, in excess of that prescribed by the landlord20. In some states

the legal interest in the premises of a landlord who violates the provisions of the law, with

regards to his premises, may be acquired compulsorily by the government on payment to him of
a sum being the value of the premises at the time21. In Sule vs. Nigerian Cocoa Board22 Oputa

JSC then observed;

The whole scheme of the Rent Edict 1976 (Ekti) particularly Ss. 15 and 18 are to give security of

tenure and protection to tenant and to restrict the recovery of premises from the tenant unless the

landlord complied with the necessary formalities of notices... followed by issuance of writ.

Unless a tenant voluntarily delivers up possession he has to be ordered to do so by the judgment

of a tribunal.

Conclusion

From the afore-going submissions on nature of rent, free market economy, economic rent

and rent control, it is obvious that Nigeria operates a free market economy. A free market

economy allows market mechanisms to determine the prices of goods and services offered to the

public. Suppliers of goods and services offer their items at the prices arrived at based on cost of

production, level of demand, rate of taxation, cost of capital and other prevailing economic
ingredients in the environment/society. It is equally important to note that so far, the demand

outweighs the supply of any given service, its price must stringently be determined by the

producers/suppliers more so in a free market economy. Also since government does not

subsidize the supply of housing and allied materials for such purpose the urge to implement the

rent control enactments becomes less functional. With the increasing need for profitability and

privatization in Ekiti as presently envisioned it is not likely that rent control can exist through

statute implementation. The dearth of successful cases on rent control in Nigeria has given

credence to the fact that rent control cannot smoothly exist in a free market economy. Therefore,

the submission of this paper is that rent control cannot exist in a free market economy.