BUDGET & PROCESS TO RENT
Corporate must be aware that this is a high budget destination – there are numerous additional expenses entailed in renting and process to rent is very country specific :
• Advance payment of rent is usually obligatory and is often between 1-2 years paid upfront
• Additional Tenant / Corporate costs on top of rent add up considerably :
• Service charge 10 % of TOTAL rent paid upfront
• Real estate agent fee 10 % of TOTAL rent paid upfront
• Legal fees paid to Landlord ’ s solicitor 5 % of TOTAL rent paid upfront
• If the choice is to have a legal review , also tenants legal fees 5 % TOTAL rent paid upfront
• Withholding Tax ( where the contract specifically states rental fee is ‘ exclusive of Withholding Tax ’) presently 5 % annualrent on residential property ( has been up to 10 % in some areas )
• Registration Fee ( Banana Island ) approx . 85 USD
• An early termination or break clause is not standard in lease agreements , however Landlords are sometimes negotiable to include and a sublet clause can always be included
• Service charge for apartments usually includes electricity / water / common area lighting and maintenance and diesel for backup power - beware that this can be adjusted increase annually if diesel prices etc . change and a surcharge is levied annually when this is the case
• Be aware that whilst rent is to be paid up front for 2 years , service charges are annual and must be budgeted for ( on a top level executive apartment , service charge can be in the region of $ 12 , 000 PA )
• More and more rentals are advertised in Nigerian Naira since the devaluation of the Naira against the dollar . Banana Island prices however continue to be advertised in USD but however must be paid in Naira
• A local legal entity is required to pay Naira as it cannot be paid into the country from abroad – an option is to pay a landlords offshore or in cases where there is no local legal entity an option is to pay the Landlord into an offshore or domiciled account in USD
• The Legal rental contract will be in Naira – Landlord typically dictates the exchange rate if payment is to be made in USD ( and don ’ t expect it to be tenant-favourable !)
• Landlords have no loyalty to verbal / written offers . Whoever pays the money first gets the property !
• Order is : payment first , sign lease contract thereafter – the contract is basically receipt of monies paid
• Corporate leases preferred but is Personal leases acceptable
• Due to fall in oil price and fewer expats in the country , there is a lower demand and it is now ( 2017 ) a renter ' s market , landlords are open to some negotiation but are not prepared to drop drastically from already lowered asking prices ( in 2011 a 4 bed apartment in Ikoyi would fetch up to $ 250 , 000 PA ; the same property in 2017 commands approximately $ 150 , 000 )
SPECIAL NOTE : We strongly recommend that eases are not signed until the CERPAC ( Combined Expatriate Residency and Aliens Card ) has been issued .