By Pat Onukwuli
The Enugu State Landlord and Tenant Bill 2025 is a proposed piece of legislation now in its initial reading in the Enugu State House of Assembly. It aims to amend Enugu State’s Landlord and Tenant Law to address issues surrounding tenancy disputes, rent control, and legal fees. However, beneath this populist approach lies the potential for severe economic repercussions that could stifle investment in Enugu’s real estate sector.
At first glance, the Bill seems like a much-needed solution to the problems tenants face, particularly those burdened by exorbitant rents and unfair treatment from landlords. Housing is a critical issue for many Nigerians, so any attempt to balance power between landlords and tenants resonates with the public. However, the underlying economic implications are far from straightforward.
The Bill proposes to regulate estate agency practices, impose restrictions on agency fees, and limit caution deposits. While these measures safeguard tenant interests, they risk discouraging investment in the state’s property market. Much like a house built on weak foundations, the Bill’s surface-level attractiveness hides deep flaws that could cause it to crumble under the weight of economic reality.
One of the primary issues with the proposed Bill is its conflict with federal law. The Estate Surveyors and Valuers (Registration, etc.) Act of 1975 governs the practice of estate surveying and valuation across Nigeria, and it establishes the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON) as the body responsible for regulating estate agents. The Enugu State Bill’s attempts to impose limits on agency fees and control the practice of estate surveying directly contradict this federal law, which could result in the proposed state law being nullified if challenged in court.
This creates a conundrum for the state government, as it risks passing legislation that, while well-intentioned, is ultimately incompatible with the larger regulatory framework. Like trying to plant a garden in soil too shallow to sustain roots, such missteps could destroy the regulatory integrity of Enugu’s property market.
Perhaps the most concerning aspect of the Bill is its potential to deter investment. Local and international investors are unlikely to risk capital in a market where excessive government interference undermines profitability. By imposing market restrictions, the Bill fosters an environment of uncertainty that could result in a decline in local and foreign investments. A state seeking to grow its economy and attract businesses cannot afford restrictive legislation curtailing private sector freedom.
Moreover, Enugu, which has made strides under Governor Peter Mba to cultivate an investor-friendly environment, risks reversing this progress with populist policies that could stifle vital growth in the housing sector. Investors thrive in environments where they have control over their assets and can be assured that the rules governing them are transparent and fair.
Another troubling aspect of the proposed Bill is the plan to empower the Enugu State Housing Corporation to regulate estate agency practices. Given its vested interest in the housing market, particularly in high-end developments, the Housing Corporation raises significant concerns about potential conflicts of interest.
The Corporation, which tends to focus more on luxury properties than affordable housing, should not have the authority to regulate estate agencies. Its involvement could lead to biased practices favouring its developments over those of the private sector, undermining the principle of fair competition.
Furthermore, the Housing Corporation’s track record in Enugu is far from exemplary. It has been involved in several controversial projects, including the distortion of master plans prioritising high-end developments over affordable housing. In many cases, it has also engaged in land sales rather than actual development. Hence, its ability to act as an impartial regulator is highly questionable. The Corporation should concentrate on fulfilling its primary responsibility of providing social housing for the state’s low-income residents rather than regulating professional practices in the private sector.
Therefore, the regulation of estate agencies should remain with ESVARBON, a neutral and independent body already well-equipped to manage such matters, as there is no need for duplication of efforts.
Another contentious provision in the Bill is the proposed prohibition of caution deposits. This provision aims to protect tenants from unfair deductions by landlords, but the practical implications of removing this safeguard could have unintended consequences for landlords. Caution deposits are a financial buffer for landlords to protect their investments from tenant-induced damage or unpaid rent. Without such protections, landlords may be less inclined to maintain or rent out properties, ultimately driving up the cost of housing in Enugu.
Rather than eliminating caution deposits, the government should explore ways to ensure fairness for tenants and landlords. A more balanced approach could provide the necessary protections for tenants while allowing landlords to secure their investments, promoting a healthy rental market.
At this critical juncture, ESVARBON must urgently engage with the Enugu State Government to provide direction and guidance on the potential pitfalls of enacting this Bill, particularly from a regulatory standpoint. As the apex body regulating estate surveying and valuation practices throughout Nigeria, ESVARBON must ensure that the proposed legislation complies with federal law.
The Board must deliver professional advice to the Enugu State Government and House of Assembly, especially concerning provisions that conflict with national regulations. Enugu risks passing a law that undermines local real estate practices and national regulatory standards without this intervention.
Although the Bill may seem like a progressive move to protect tenants, its potential to stifle investment, create legal conflicts, and empower self-interested regulatory bodies suggests that it is poorly conceived. It presents a series of risks that could undermine the state’s long-term economic health. Equally, the Enugu State Housing Corporation’s involvement in regulating estate agencies is particularly concerning given its history of prioritising high-end developments and its vested interests in the market. The Corporation should not be placed where it can influence regulations that impact its business.
In the grand scheme of things, the Enugu State’s attempt to initiate this Bill is akin to a farmer who, to protect the crops, puts up a fence that cuts off the sun and rain. The result may be well-meaning but ultimately destructive. Enugu must carefully reconsider the proposed Bill and seek a more balanced, sustainable approach that promotes tenant protection and investment in the real estate sector.
Instead of stifling the property market’s growth, the state should create policies encouraging investment and economic development. Therefore, for Enugu to continue its growth and attract investment, the state must focus on policies that promote transparency, fairness, and market freedom. Onukwuli PhD, wrote from Bolton, UK. He can be reached via: patonukwuli2003@yahoo.co.uk
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