Tenancy is an agreement between a premises owner and an interested person (a tenant) for an agreed sum for a certain term which could be weekly, monthly, quarterly, or yearly.
In other words, in every tenancy agreement between a landlord and a tenant, there must be a contract. And a contract by definition includes an offer by the landlord and acceptance by the tenant with respect to the rent/payment and period of tenancy. Thus, rent is a matter of agreement between the landlord and the tenant which agreement may be express or implied, and can also be verbal, or in writing.
Like every contract, there must be a consideration and an intention to enter into a legal relationship. The relationship between a landlord and tenant is contractual and based on the agreement between the parties which may be express or implied. Consequently, the terms of the relationship between a landlord and tenant, including the rent payable by a tenant, cannot be altered by either party without the consent of the other.
In Cobra Ltd. v. Omole Estates Inv. Ltd. (2000) 5 NWLR (Pt 655)1 at 15 paras. D – E, the Court of Appeal, per Galadima, J.C.A (as he then was, but later J.S.C) held;
“The issue of rent between the landlord and tenant is a matter of agreement. The Agreement may be express or implied. The relationship between them too is a contractual one. And being a matter of contract its term cannot be altered by either party without the agreement of the other. See Udih v. Izedonmwem (supra). Unless the landlord and the tenant are ad idem a landlord’s unilateral decision to increase the amount of rent payable will be ineffective. A unilateral increase of rent is an offer or a proposal made by the landlord.”
Where a landlord increases the rent to be paid by the tenant without notice, it amounts to a unilateral increase which is now nonconsensual and requires consent or agreement of the tenant. In other words, a unilateral increase of rent by a landlord is an offer in law to the tenant.
Being a contractual agreement, a landlord’s unilateral decision to increase the amount of rent payable under the tenancy agreement will be ineffective unless there is an agreement to that effect between the landlord and the tenant. Thus, there must be an acceptance which will make it bilateral.
A unilateral increase of rent can, at best, be an offer or proposal, and where, the tenant refuses to pay the landlord’s proposed rent, it is for the landlord who stands to gain where the new rent is accepted by the tenant, to take necessary steps as required by law to terminate the tenancy.
Tenancy is in the nature of a contract. Once the landlord and the tenant have previously agreed on a fixed rate as rent, the landlord cannot unilaterally increase that rate as that would amount to a breach of contract. See, Yahaya v. Chukwura (2002) 3 NWLR (Pt. 753) 20 at 46 para. A.
It is hornbook law that parties have the liberty to contract and are bound by the terms and conditions of their agreement; they must be held to their bargain. This is encapsulated in the Latin maxim “pacta sunt servanda” which literally means “Agreements must be kept.”
In BABA v N.C.A.T. C (1991) 5 NWLR (Pt 192) 388 at 413 paras. A-B, the Supreme Court, per NNAEMEKA-AGU J.S.C opined thus;
“That parties enjoy their freedom of contract carries with it the inevitable implication of sanctifying their contracts. This means that if any question should arise with respect to the contract, the terms in any documents which constitute the contract are, invariably, the guide to its interpretation.”
It is worthy of note that, tenants have rights and protections under the law when it comes to rent increases. If a landlord increases rent without providing formal notice, the tenant has several options to address this situation: Check the Tenancy Agreement, discuss with the Landlord, request a Formal Notice, negotiate a fair increase, file a complaint (Court or Tribunal with appropriate jurisdiction), withhold rent with caution, and prepare to move out. However, where a tenant decides to lodge a complaint, he must be ready to pay the already agreed sum into court fore collection by the Landlord. Also, the tenant may wish to settle the old rend and leave the increase for determination by the court.
LEGAL TIPS is anchored by Ms CIA Ofoegbunam, an Abuja-based lawyer who is passionate about legal practice. LEGAL TIPS offers quick hints on substantive law, as well as rules of practice and procedure, and serves as a handy reference guide to lawyers, especially in court. Published on a weekly basis, the LEGAL TIPS Series is CIA’s modest contribution to legal development in Nigeria.
