HOW TO PROPERLY INCREASE THE RENT OF A PROPERTY IN NIGERIA

There is no law that spells out when and how to increase rent in Nigeria. What the law frowns at is arbitrary increase in rent. There are however some rules or best practices guiding rent increase.

First is that the rent should not be more than 50% of the current rent. A rent increase more than 50% of the current rent is generally seen as arbitrary while a rent increase less than 50% of the current rent is generally seen as acceptable. So if a rent is 300,000 naira per annum for example, the highest acceptable increase is to 450,000 naira per annum. An increase from 300,000 naira to 500,000 naira will be seen as an excessive increase in rent.

Second is that the rent should be increased every two to three years. Rent should not be increased every year as it will be seen as an excessive increase. Likewise, a rent should not be retained for a long period of time as there are often difficulties to increase the rent from the previous rent to the current market rate of the rent. An increase from 300,000 naira to 350,000 naira after two years, and from 350,000 naira to 400,000 after another two years will be better received by the tenant than from 300,000 to 500,000 after 5 years. Therefore, a periodic gradual increase of rent is advised

Third is that there must be sufficient notice for the increase in rent. The notice for increase in rent should come in at least six (6) months to the end of the current tenancy period to give the tenant sufficient notice of the increase of the rent. Giving the tenant one month notice or a few days notice before the termination of the current tenancy is not a good practice. Sufficient notice is advised to give the tenant enough time to plan to pay the increase in the rent or to look for another property.