Prospective home owners who are eager to see solutions to the numerous issues plaguing home ownership in Nigeria, need not look further. This is because a maverick investor, Dr. Chukwuma Rome Iwuanyanwu, founder/CEO of Landlord Tenant Management System, a housing solution company, says the firm is fully dedicated to ensuring that both landlords and tenants are not just availed of bespoke solutions but are also in for good returns on their investments in this interview with vanguard Homes & Property. Excerpts:
How did you conceive the Landlord Tenant Management System idea?
I have always aspired to be an entrepreneur. So, while I was studying for my doctorate programme, I experimented with a lot of business ideas that did not do well. In that process, it dawned on me that where I was missing the point was that I was not meeting any need that people wanted. I was following the bandwagon. However, when I took a course called Entrepreneurship, Innovation and Strategy, my eyes opened and my thought process changed. We read and analysed a book called Capitalism, Socialism and Democracy by Joseph A. Schumpeter, in which he came up with a term called Creative Destruction, the dynamics of innovation, a strategy in which if an organisation does not apply, will either see it going down, or killed by the war of competition.
In the middle of the course, our professor, an Iranian, challenged us to come up with a need or a problem and its solution. He told us that he would not like to produce a paper doctor of business but a practical, problem-solving doctor of business.
He did not limit us by space, he told us that most of us that came from developing countries were swamped by uncountable problems that were begging for solutions. I scratched my head for days and I remembered that one of the troubles hindering housing development in Nigeria was the important relationship between landlords and tenants, rent payments and comfort of the tenants. Innovation, to my own understanding from many books and research I have done, is nothing other than tweaking what is already in existence to produce a new product or service, there is no need to reinvent the wheel. Invention is different from innovation; the former is discovering something entirely new that was not in existence before. That was how Landlord Tenant Management System came about, to restore sanity in real estate industry in Nigeria.
With the advent of Landlord Tenant Management System in Nigeria, which problem would you say you have solved for landlords?
We have been able to solve the problem of returns on investments, ROI. ROI is a recurring factor in all areas of business and investments. Primarily, investments come with returns. If you buy a stock in the stock market, you will expect returns and if there are no good returns after waiting for some years, you will sell off that stock. Traders, who buy goods, sell them off at a profit. The sole motivation for entering into any business endeavour is to make profit. Even those who put money in fixed deposits with banks expect some profits quarterly or yearly at certain percentages. So, it flows naturally that landlords who invested huge sums of money in constructing their houses expect good returns from such investments.
So, how would the Landlord Tenant Management System (LTMS) be helping landlords earn good returns on their investments?
This is simple. Tenants are supposed to pay rents as at when due, at the agreed rate provided for in the tenancy contracts entered into with landlords for the tenants to live in or use the property. But this is not always the case in Nigeria. Some tenants pay the initial rent and move in and at the expiration of those payments, the next rents become a problem. I don’t know what goes in the minds or in the heads of those tenants, but there are cases where landlords have lost their houses to banks due to default in payment of the loans they got from banks for the construction of those houses, owing to failure or refusal of the tenants to meet rent obligations. I have heard a case where tenant stayed in a house for five years without paying rents and the case lingered in the court and at the end, the tenant was pushed out of the house by court eviction. It does appear that landlords are holding the short-end of the stick. The woes are endless. Tenants owing rents and damages to the property they occupy, without much option for the landlord to recover or earn from his/her investments in housing abound in Nigeria.
One of our basic services would be to get such behaviours lodged in the LTMS database so that when such a tenant goes to another place to rent an apartment or house, the new landlord would just search the name of such prospective tenant in the LTMS database to guide him/her to make the right decision. This way, the behaviour of any tenant goes with him/her as it is done in advanced countries. With this, people will be careful that it is no more business as usual. Another benefit for landlords is free listings of their properties for six months in the LTMS database for potential tenants to rent or others to buy.
How will those who pay their rents as at when due be impacted?
When I was teaching in Los Angeles, our principal told us not only to report those bad students to their parents, but we should also send a good letter home for the good students that showed sterling behaviours. It is also the duty of landlords to lodge the good behaviours of good tenants, so that it will all be detailed in the report sheet when landlords subscribe. Those good tenants need to have some incentives for staying loyal to contractual agreements. For instance, a good tenant can earn “more in special” if he/she is leaving the present apartment to a new one or rent reduction after some years, if he/she retains the present apartment. This is because they are not risky tenants; it is at the discretions of the landlords.
Is LTMS only for landlords?
No. We protect the interests of both the landlord and the tenant. Interestingly, LTMS is the only organisation in the world that can hold landlords accountable without going to court. All the advantages the landlords have, tenants also have, and it is a fair game. Tenants have the right to live in a conducive and trouble- free environments. There are also some troublesome landlords and the behaviours of such landlords need to be captured in the LTMS database to forewarn the tenants that subscribe to our services when seeking to rent houses from landlords.
What do you perceive as the expectations of landlords and tenants in Nigeria?
On the LTMS website, https://LTMSystem.com, there is a section called Legal Angle, it is for landlords and tenants to read that section carefully so as to understand the limit of their actions. LTMS does not challenge the laws of the land and we do not enforce the laws. What we primarily do is to capture the behaviours of the landlords and tenants in our database which they input so as to ensure sanity in the rental real estate industry in Nigeria. These services will save many landlords and some tenants from convoluted court cases in Nigeria.
What do you think that a landlord should require from tenants before leasing or renting his or her property out?
We have tried to spell out everything in the frequently asked questions link on the website. Every user is asked to read it and our Terms and Conditions documents before use. However, I want to call out the importance of the use of National Identification Document as the only recommended photo ID landlords should ask from tenants before letting property out. We counsel that the character of the prospective tenant should be placed over the initial rent that landlord stands a chance of earning.
Where do you place tenants who have difficulties with rents because they lost their jobs?
Misfortune can fall on the doorstep of anyone unannounced. In that case, it would have to depend on the past behaviours of the tenant and the cultivated relationship with the landlord. The tenant can negotiate with the landlord for some time until he or she finds his or feet. But this cannot be for an infinite period. I remember in 1996, I lost my job and paying rent was difficult and I had to negotiate with my landlord, a Jew. Again, the saving grace was the government’s unemployment benefit I was getting. My rent then was $575 for one bedroom and I was getting $250 a week and I was struggling when the utility bills, other sundry expenses and food were taken into consideration.
So, I had to do odd jobs to survive. Unfortunately, in Nigeria there is nothing like unemployment benefits. This is why a guy that loses his job in Nigeria would be in a very serious situation. The government that is supposed to provide this short-term life-saving benefits does not do that rather they fritter our money to overseas and squander the rest through stealing and corruption. What should the landlord do? Remember that he or she is not running a charity organisation. So, he or she must make money from his or her investment. Jack Welch, the former General Electric, CEO and Chairman said that businesses were not run on compassionate ground or divine intervention. The tenant must leave and give way to those that can pay the rent, unfortunately, that is how businesses are run to survive.
- How do we see behavioural adjustments in Tenants and landlords relationship?
This is a very good question because it will highlight the essence or the relevance of LTMS. When people start embracing LTMS and subscribe to our services, there will be a paradigm shift in the behaviours of housing stakeholders, the landlords, tenants and even banks and other investors in real estate industry. In the past, before the coming of LTMS, it was nothing short of chaos, impunity and brazenness on the part of mostly tenants. The reason was that there was no system in place to tract the behaviours of people. But now, there is no hiding place for everybody involved, in the sense that your behaviour will follow you to anywhere you go. If you are a tenant and you contravened an eviction notice by the court due to refusal of rent payment or you are a habitual rent defaulter, that history will be attached to such tenant and other landlords will see it if captured in the LTMS database. The same applies to bad landlords. The evolving scenarios will encourage a lot of people to invest and lend money to housing construction because people will now pay rents and they will not have bad status reports of refusing to pay rent as at when due. I have a lot of friends in USA, who said that the last thing they would do in Nigeria is to build houses for rents, because tents do not pay rents in Nigeria. LTMS is a disruptive innovation and many people who like status quo will not like it, but that is what innovation and pervasive technology are all about. We have to embrace it, innovation is a continuous process and organizations that want to survive and be on top of their games make innovation a priority. Joseph A. Schumpeter, the father of Entrepreneurship saw it in 1934 (Creative Destruction) which I pointed out earlier in the beginning of this interview.
What else, do you think that the public should know about LTMS?
It is important for all to know that LTMS is built for all in Nigeria. It is either you are a landlord or you are a tenant, so we are for all at LTMS. There is another important service we offer at LTMS, and that is Building Professionals Listings. Architects, Surveyors, Structural Engineers, Electrical Engineers etc. and artisans like Carpenters, Masons, Plumbers, Borehole Drillers, and Tillers and so on should subscribe to LTMS services for the public to hire them in any locality across the federation. The beauty of this service is that it places the power in the hands of end-users to vet and rate the professionals in stars as a reference for others to use or not to use their services. We also have a segment for entrepreneurs, called “Entrepreneurship Suite” and News/Blog.