Upward Review of Rent in Nigeria: Rights and Limitations
Preem & Partners | 15th April, 2025
It is common practice for landlords of residential and commercial properties to periodically review rents upward. However, disputes often arise when these rent increases are met with resistance from tenants — especially where proper notice is not given, the increase appears abrupt or unjustified, or the tenant believes the new rent does not reflect the actual value of the property. In some instances, such hikes are perceived as deliberate attempts to impose financial hardship or force tenants out.
In recent times, this practice has escalated significantly across Nigeria, with many landlords imposing rent increases ranging from 50% to as much as 100%. This sharp surge has raised concerns among tenants, particularly in commercial cities like Port Harcourt, Lagos, and Abuja where the cost of living is already high and the demand for housing far exceeds supply.
Upward rent reviews often reflect the landlord’s legitimate interests but may be challenged by tenants who seek to protect their rights. In this article, we will examine the rights and limitations of both landlords and tenants in the context of upward rent reviews. We will also discuss the legal procedures governing such reviews, and the relevance and effect of rent review clauses in tenancy agreements.
To reiterate, it is a common and often justifiable practice for landlords or property owners to review rents upwards periodically. Several economic, infrastructural, and environmental factors influence this decision. One of the primary drivers of rent increases is the imbalance between housing demand and supply. In many urban areas such as Lagos, Abuja, and Port Harcourt, the population continues to grow rapidly, while the development of new residential or commercial buildings lags behind. This shortage leads to low vacancy rates and gives landlords leverage to increase rents, knowing that alternative accommodation options are limited.
Another common reason property owners give for rent increment is the location of the property and access to amenities as the value of a property is often tied to its location. Properties situated close to desirable amenities, such as public transportation hubs, business districts, reputable schools, hospitals, and entertainment centers tend to attract higher rents. As infrastructure improves or neighborhoods become more desirable, landlords often adjust rents to reflect the area’s enhanced value and attractiveness.
When landlords invest in property improvements, like installing new fixtures, upgrading bathrooms or kitchens, adding security features, or enhancing shared amenities, they may seek to recover these costs through increased rent. These upgrades typically improve the quality of life for tenants and may justify a higher rental value.
Rising property taxes, utility charges, and maintenance costs are also common reasons for rent hikes. When government levies or inflationary pressures increase the cost of property ownership, landlords may pass a portion of these costs onto tenants to maintain profitability.
While the reasons for an upward review of rent may be justified in principle, legal and practical issues often arise when landlords attempt to implement such increases without following due process. Tenants may be caught off guard by sudden or steep increase in rent, particularly when no formal notice is given, or the timing of the increase contradicts the terms of an existing tenancy agreement. In such situations, tenants may perceive the increment as arbitrary, exploitative, or unlawful. These perceptions can lead to strained landlord-tenant relationships, rent refusal, formal complaints, or court action.
In Nigeria, tenancy laws exist at the state level and regulate the relationship between landlords and tenants. These laws are designed to provide legal structure, foster social and economic stability, and protect both landlord and tenant – shielding tenants from unfair rent practices while also securing landlords’ rights against defaulting or uncooperative tenants. In states like Lagos, for instance, the Tenancy Law of Lagos State, 2011 provides clear procedures that must be adhered to before a rent increase can be deemed valid and enforceable.
One of the legal requirements, although not expressed in tenancy laws of states, is that a landlord must issue written notice of the proposed rent increase, and the length of notice required is generally determined by the type of tenancy – whether monthly, quarterly, or yearly. Usually, and as common practice, where a yearly tenancy is governed by an oral agreement, the tenant is entitled to 3-months’ notice increase before the expiration of the current term, informing them of any proposed rent increase. This is not a hard and fast statutory rule, but is considered reasonable and fair, as it gives the tenant ample time to consider the proposed increase, make alternative arrangements, or negotiate with the landlord. Where the tenancy is governed by a written agreement, the notice period is expected to be stipulated in the agreement. But when not stipulated, a reasonable time suffices.
This requirement has been reiterated in several decisions including in Ayinke Stores Ltd v. Mrs. Mr. S.A. Ola Adebogun where the Supreme Court highlighted that where a tenancy is periodic (like yearly), it is expected that parties respect the cycle of the tenancy and give adequate notice before making any substantial changes, especially those affecting payment obligations.
Another requirement which is not expressed in tenancy laws of states is that any proposed increase must be objectively justifiable in relation to the condition of the property, prevailing market rates, location, and any improvements made. Courts may assess the reasonableness of a rent increase in light of these factors.
It must be added that there is no specific law in Nigeria limiting the amount by which a landlord may increase rent. This is because rent is generally a matter of contract between the parties, either expressly agreed or implied from their conduct. However, Nigerian courts have developed principles through case law that offer guidance on rent increases and their enforceability.
A notable example is the decision of the Court of Appeal in Jovinco Nigeria Ltd & Anor v. Emeka Ibeozimako. In that case, the central issue was whether a landlord could unilaterally increase the rent payable by a tenant without the tenant’s consent. The court held that the landlord-tenant relationship is fundamentally contractual. Therefore, any proposed change to the terms of the agreement, including an increase in rent, amounts only to an offer, which the tenant may accept or reject. If the tenant does not agree to the new rent, the landlord cannot enforce it unilaterally but must either maintain the existing terms or follow legal steps to terminate the tenancy properly.
Failure to comply with these procedures may render the rent increase unenforceable and expose the landlord to legal liability. It also undermines trust, may lead to tenant turnover, damages the landlord’s reputation, and could result in time-consuming and expensive litigation.
The tenant who feels exploited by the landlord’s upward rent reviews may challenge such arbitrary increases. The Tenancy Law of Lagos State 2011, particularly, provides specific procedures for tenants to seek redress where rent increases are deemed unreasonable. Section 37 of the Law empowers tenants to initiate formal legal proceedings if they believe the rent increment imposed is arbitrary or unjust, unless there is a valid agreement stating otherwise.
Specifically, section 37, subsections (1), (2), and (3) state:
“Subject to any agreement to the contrary, an existing tenant may apply as in Form TL 11 to the Court for an Order declaring that the increase in rent payable under a tenancy agreement is unreasonable.
In determining whether an increase in the rent is unreasonable, the Court shall issue hearing notice as in form TL 12 to the Landlord and shall consider the application on the following grounds –
(a) the general level of rents in the locality or a similar locality for comparative analysis;
(b) evidence of witnesses of the parties; and
(c) any special circumstances relating to the premises in question or any other relevant matter.
If satisfied that the increase in the rent is unreasonable, the Court may order as in form TL13 that the increase in the rent be changed to a specific amount.”
Subsection 4 of section 37 of that Law makes it unlawful for a landlord to eject a tenant from the property until after the court’s judgment or ruling has been delivered on the matter.
The fact that parties to an agreement must keep to the terms of the agreement necessitates tenants to thoroughly review the terms of agreement before executing same.
Although, it is the practice of landlords and property owners to either leave out rent review provisions or insert vague rent review clauses [such as :the landlord can incrase the rent of the property at any time and for any reason] with the general purpose of enabling the landlord to obtain from time to time the market value which the property would command if let on the same terms on the open markets at the review dates, however, it is in the best interest of the tenants to ensure that rent review clause is inserted in the agreement and is specific. This is to ensure that landlords do not unliterary increase rent to the detriment of the tenant.
A proper rent review clause should contain the following things –
a) Method of initiating the review. For example, a notice to be given by the landlord to the tenant in writing and the time within which the notice is to be given.
b) The time frame for the review. For example, after 3 years of the tenancy and the date in which the new rent would become payable.
c) The method of calculating the new rent. An example would be, whether a valuation by expert is required before the review.
d) Procedures for resolving any dispute of the new rent, for example, by the use of arbitration or negotiation mechanism.
While landlords have the right to review rent upwards, such increases must be carried out in good faith and in accordance with legal procedures. Tenants are legally protected from sudden or arbitrary increments and, depending on the jurisdiction, may challenge such increases through a formal dispute resolution process. Therefore, any proposed rent adjustment should be reasonable, reflect market realities, and be preceded by fair notice or mutual agreement.
Where a written tenancy agreement exists, its terms are binding. However, in the absence of such documentation, or where it is silent, the relevant tenancy laws or practice step in to regulate the relationship in the event of dispute. Given that tenancy is contractual and rooted in mutual consent, it is essential for landlords and their agents to furnish prospective tenants with a draft copy of the tenancy agreement before demanding payment of rent or lease sums. Oral agreements, especially where a written one is expected, should be avoided. Tenants, for their part, are encouraged to demand the draft agreement early, and to review it carefully, advisedly with the help of a real estate lawyer or firm, before committing to the tenancy. Doing so protects their rights, fosters trust, and can help prevent disputes that often lead to unnecessary stress, costs, and legal battles.
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