Need for tenancy bureaux In real estate practice

As credit bureau is to financial institutions (with regards to credit transaction/facility), so is tenancy bureau to real estate firms (with regards to real estate rental market/tenancy administration).

The main deliverables of the tenancy bureau include a tenancy report on every prospective tenant as well as sitting/subsisting tenant. This comprises of demographic information of the tenants: like names, address, gender, state of origin, place of work/type, business/line of trade, means of identification, registration numbers (for business entities), relevant rental history information such as rent paid, rent term and duration, why and how the tenancy was determined, tax payment, lawsuits/litigation, criminal records, late payments, no payment, issuance of non-sufficient funds (NSF) cheques, nonpayment of utility & statutory bills, property damages, unauthorized usage or conversion of use, among others.

The bureau would also ensure a tenant portfolio monitoring report, which will include information on tenants’ disposition and behavior both internally and in connection with external tenancy arrangements over time to aid the estate management firm makes strategic tenant management decisions. It will involve evaluating and monitoring tenants’ activities within a given estate management firm and outside the firm to obtain trends over a given period. It is an integrated and proactive approach to identifying early indicators of defaulting tenants. It entails reviewing to developing sustainable strategies for the enhancement of the real estate market.

While the tenancy performance score/rating will entail placing a high-risk tenant list such as non-performing tenants, doubtful tenancy, and default tenants.

The bureau will include will amongst other functions ensure stimulation of supply of rental accommodation which will consequently boost estate management practice as a critical sector of our economy; aiding the provision of information needed in estate surveying and valuation practice in connection with advice on property values and other related services as contained in CAP E. 13 LFN 2007.

It will as well sanitize unhealthy activities of recalcitrant tenants/ rent defaulters among others by sharing relevant rental history/information with other real estate firms as well as Landlords and other stakeholders to create a perfect warning system for everyone interested.

Other expected benefits include boosting the effectiveness and efficiency in tenancy creation by avoiding tenants on a high-risk list to attract more investors in the real estate rental market; equip real estate firms/Landlords with necessary tools for processing and managing tenancy issues; Facilitating tenancy creation, since the prospective tenant’s details can be obtained by a tap of a button on the tenancy bureau platforms unlike the current practice of moving around to verify the information furnished on the prospective tenant form.

Furthermore, by sharing information of tenants among stakeholders, transparency is being promoted, paucity of information and imperfections that characterised the property market wilL be mitigated, among others. While a dispute resolution structure is also an integral scope of tenancy bureaus. As soon as this is done, the outcome will be updated and credible information accessible to stakeholders. This will no doubt restore investors’ confidence.

To achieve the above, the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON) being the regulatory body of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) (as the key professional in real estate practice) must encourage, support, and canvas for the creation of Tenancy Bureau as well as mandate the members of NIESV (especially registered firms with NIESV) to register with them when and if created just as the Central Bank of Nigeria (CBN) did for all financial institutions under her supervision. And while the advocacy on the creation of Tenancy bureaus is ongoing, a pragmatic step toward enhancing the real estate practice with specific reference to the estate rental market will be, mandating registered Estate Surveying and valuation firm to register on any of the existing and licensed credit bureaus.

Esv. Oleka writes from AbujaJasper Oleka