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Published On: Thu, Mar 13th, 2014

Kaduna Revenue Court pegs tenancy rate at 5%

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TenancyAgreementFrom Muhammad Ibrahim, Kaduna,

The Kaduna State Revenue Court sitting at Daura road Kaduna has ruled that the Kaduna South Local Government Council has the right to increase the tenant rate entitle to it from 1% to 5%.

The court gave this ruling while delivering a preliminary objection brought before it by the defendant/applicants.

The defendant/Applicants C-Way Company and 13 others were dragged before the revenue court by the Kaduna South Local Government in a suit number Kds/rc/739/2013 stating that the Applicants are supposed to pay 5% of their rent.

However, the Defendant/Applicants in a preliminary objection stated that the 5% tenant charge demanded by the plaintiff outrageous, saying the charge rate of rent collected by any landlord is 1% and the defendant/Applicants as commercial entity are excluded.

In the ruling, the Judge stated that the Kaduna State House of Assembly passed a law known as ‘A’ law to provide for the Local Government Councils published as law No. 16 Annual volume of the law of Kaduna State of Nigeria 2003. The law empowered all local governments in the State to collect tenant rate from landlord or property owners within their jurisdiction.

“Under this law of 2003, part VIII specifically section 89 appoints the local government to serve as rating authorities while section 97 empowered the local government to make bye laws.

“I am satisfied based on the reasons aforementioned that tenants rate is chargeable on commercial properties/ industries and tenant rate is not restricted to residential properties. Therefore commercial buildings are liable to pay any rate given by the local government.

“Secondly, it is mine candid opinion and I so hold that local government within Kaduna have the power and competence to make bye laws with respect to tenants’ rate including power to review the rate when necessary because Kaduna State House of Assembly law No. 16 of 2013.

“Thirdly, the Kaduna South Local Government, the plaintiff in this action has been empowered by the Kaduna State House of Assembly through its delegated authority has power to review and if necessary create the percentage of the rate to be charged on tenant rate.

Accordingly, the plaintiff respondent has the right in increasing the tenant rate from 1% to 5%.

“I hereby hold that the proper rate to be paid for commercial building/industry in Kaduna South Local Government area is 5% of the current value of the property situated within the local government area. I equally hold that for the reason aforementioned the plaintiff/respondent has the competent or lucus standy to initiate this action against the defendant/applicant. This action as filed before this court is indeed proper. The preliminary objection did not succeed and is accordingly strucked out.”

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