Different Strokes For Different Tenancy Situations

Some tenancy situations by nature are different either by the use, to which the accommodation is put, or physical differences (for example, renting a bare site) and lastly social differences (especially the social complications that arise when the landlord and tenants live together).

Commercial Users
Offices and Shops
The same applications in the entirety of this book apply to premises used for trading purpose. The following peculiarities however arise and should be handled from an educated point of view by the tenant:

An office may be let open-planned without partitioning. Do clarify who will put in the partitions and what happens at the expiration of your tenancy. It will be preferable if the owners pre-agree to pay for the partitions as you leave because they may not be best fitted for your next office.

Sometimes offices and shops have bulk-metering and many co-tenants share the same bill. The most common approach is to try and estimate by counting the light points, air conditioners and other equipment among tenants and using this to estimate each person’s consumption. It is usually complicated and considered not equitable. Therefore a more agreeable way of determining electricity bills should be sought. Best of all, each tenant should have his own meter. In some high rise buildings, however, from the way the wiring system was done, estimates by light points and installed equipment are still the closed to fair estimates.

Every tenant should take an interest in the Service Charge account and how deductions are arrived at for services and utilities. Some commercial tenants are charged for electricity based on space occupied, that is, the number of square meters/ which may not be appropriate. Question the rationale. Consider an architect with ten fully qualified draughtsmen occupying 240 square meters with central air-conditioning and only one computer and one photocopier in the office and their next neighbour, a business centre, occupying only 80 square meters but crammed with four photocopiers, six computers, several printers and other gadgets required in their trade.

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Certainly these have to be reflected in the billing system or else sharing by space is not equitable.
The following are common issues of tenancy in offices and shops whether small or major:
Security guard expenses (shared)
Water supply source/tanker (shared)
Mains billing (shared)
Borehole or well (usually owners provision)
Electricity – mains (shared billing)
-generator (installed by landlord or tenant but shared maintenance).
Clearing/gardening expenses – common areas (shared)
Refuse collection (shared)
Light maintenance (shared)
Sporting/other facilities maintenance (shared)
Replacement of bulbs for common areas, etc. (shared)
Telephone expenses (individual billing).

Note: Expenses as above can only be shared in situations of multi-tenancy where several tenants share the same premises but where they are single tenants, the tenant bears these expenses alone.
When well organized and recorded, there may be annual charges estimated apart from rent for the tenant to pay which is meant to cover the above expenses. This is called the service charge. When administered by a professional firm of Estate Surveyors and Valuers or facility managers, the amount is collected annually along with the rent and utilized to run the above itemized services throughout the tenancy year as they occur. A final account is rendered to each tenant at the end of the period the payment covers. If more money has been spent than contributed then there is an additional or supplementary service charge. If less has been spent the balance is brought forward as a credit in the next period.

Inevitably even where service charge administration is not as organized as above, the tenants still pay but it may be monthly or payable on demand. Consider the small plazas, shopping complexes, conershops and so on which because of their size, need just little monthly contributions from each tenant. It is still a service charge and can be properly organized with a little more practical approach into quarterly, six monthly or annual expenses.

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A Tenant on Bare land
Distinguish yourself – are you a squatter, license or tenant? All three are commonly applicable to bare sites. A squatter has no contractual agreement to be on the land and is not there by permission of the owners. He just found suitable land and maybe erected a temporary shed for use of his trade, example, battery charger or roadside hawker of carpets or gsm kiosks.
A license has the land owner’s permission but is not asked to pay and can be told to move anytime.
Many individual land owners permit others to occupy their land temporarily until they are set to develop or build. Government (either state or federal or parastatal) also grants what is called a Temporary occupation License (TOL). These may be approved with a token charge as ground rent. Lastly there are proper tenants on bare sites who have a lease or some form of agreement and pay what is termed ground rent annually. This is usually from year to year or for fairly short terms of say five to ten years. This relationship is contractual with rights and obligations of a tenancy.
The nature of these forms of land occupation is usually applicable to bukateria, artisan’s workshop, kiosks, car dealers, churches, and mechanics.

Two things are clearly peculiar about these forms of tenancy:

Whatever is built on the land is usually a temporary structure and has been erected by the tenant upon a site which he knows is not his own.
Such lease of bare sites is usually for vocational or trade purposes and a measure of goodwill is being developed and attached to the site with these small businesses.
As a result of 1 & 2 above, it is necessary for the temporary arrangement to have clearly spelt terms of surrender. That is, how much time can I have to prepare to move or vacate, should the owner suddenly require its use back?
Paradoxically, everybody in Nigeria presently, at best, has a 99 year lease on land going by the Land Use Act of 1978. The only marked difference is the length of time and where a short lease is a development lease and can be renewed periodically then development of a more permanent nature can also be done on the site just as operates with a C of O (Certificate of Occupancy).
However, sites that are likely to be required back at short notice by the owners should be cautiously developed. Erect structures that would not cost too much to remove and replace elsewhere. Also make sure that at the minimum you are entitled by the “Agreement” between you and the owners to at least six months notice before the landowner can repossess. Indeed, one year is better since you would need to remove the temporary structure on the site and equally take time to transfer the goodwill you have built over time in that location by your trade and not lose all your customers.
Aside from the above mentioned peculiarities of these tenancies, apply all the preceding principles earlier detailed in previous chapters for all tenancies.

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