Legal Articles Uncategorized

STUDENTS V. LANDLORDS: A LEGAL ASSESSMENT OF THE COVID-19 CRISIS IN RELATION TO EXPIRATION OF RENTS – AKINKUNMI ABOLADE

Introduction

There seems to be a consensus among legal minds that the current global pandemic (Corona Virus or Covid-19) would most likely operate, in appropriate situations, as either a contractual frustration or force majeure. Truckloads of legal articles on this subject matter have been written. This article does not seek to controvert either positions but seeks to rely on both arguments to explain the legal effect of the covid-19 crisis on the expiration of house rents of students that live within the township locations of their respective Nigerian Universities.

This treatise argues that the number of months for which the house/apartment was unoccupied as a result of the pandemic should not count in the determination of the term/expiration of rent. The basis of this argument is that the doctrine of frustration would operate to exclude the duration of the pandemic. It concludes by recommending that university managements and student bodies take steps to negotiate with landlords to make partial, if not total concessions as it relates to rent payments.

The Doctrine of Frustration

To start with, it is important to shed light on the concept of contractual frustration. Frustration refers to a situation that arises which renders the fulfilment of a contractual obligation impossible without the default of either party to the contract. This definition has been given judicial backing in the case of OKEREKE & ANOR v. ABA NORTH LGA (2014) LPELR-CA/PH/179/2004 where the court further stated that the doctrine of frustration refers to a condition where the terms of the agreement cannot be honoured as a result of a fundamental change in circumstances or the occurrence of an intervening event. There are quite a number of instances that would amount to the operation of the doctrine of frustration. In the case of MALIK v. KADURA FURNITURE & CARPETS CO. LTD (2016) LPELR-CA/K/409/2014, the court per Abiru JCA listed some of those instances as thus:

  • Subsequent legal changes or statutory impossibility;
  • outbreak of war;
  • destruction of the subject matter of the contract or literal impossibility;
  • Government requisition of the subject matter of the contract; and
  • cancellation by an unexpected event

In the instances listed above, it would be impossible to honour the terms of the contract. As an illustration, if Mr. A enters a contract with Mr. B to deliver a particular drug on a certain date, but a new legislation makes the sale of such drug illegal before the date of delivery, that would amount to frustration which would relieve Mr. A of his obligation to deliver the drug and Mr. A is bound to refund the money if payment has been made. In legal parlance, it is said that the contract has been discharged or determined by frustration.

Even though the effects are very similar, there is a difference between frustration and force majeure. Unlike frustration which operates without the anticipation of either party, force majeure is a clause contained in a contract putting into prospect, the occurrence of events that may render the performance of the contract impossible. The clause stipulates what is to happen in such situations.

While the doctrine of frustration operates to terminate the contract, force majeure does not necessarily terminate a contract. The contract subsists with each party proceeding with what is stipulated. In the case of Bunge SA (Appellant) v Nidera BV (formerly known as Nidera Handelscompagnie BV) (Respondent) [2015] UKSC 43, the United Kingdom Supreme Court identified a particular clause as a force majeure which applies to cases where the execution of a contract or any unfulfilled portion thereof is prevented by specified categories of event.

From the foregoing, the difference between frustration and force majeure can be stated as thus: frustration is a doctrine that applies to terminate a contract as a result of the occurrence of unforeseen circumstances. Whereas, force majeure is clause in a contract which puts into prospect the occurrence of some events which might hinder fulfilment of the contract and stipulates what is to happen.

Applicability of the Doctrine of Frustration to Rent and Lease Agreements

Would the doctrine of frustration apply to a lease agreement? It is submitted in the positive, that frustration would apply to lease agreements. This was the position of the Court in the case of EMMANUEL OSELOKA ARAKA v. MONIER CONSTRUCTION CO (NIG) LTD (1978) LPELR-SC.314/1976. The Court rejected the age-old principle that the doctrine of frustration does not apply to lease agreements. In this case, a house was left unoccupied because the engineers for whom the Defendant Company rented the apartments had to flee the State due to the Biafran war. The Court held that the landlord was prevented from recovering the rents due from the defendant company for the period for which the house was left unoccupied due to the Biafran war.

It is submitted that this position of the law is appropriate for our legal system and should be subsequently upheld by the court whenever such matter comes up before it.

Students and Landlords in Focus

The previous section has argued that the doctrine of frustration would apply in lease agreements where it is impossible for a tenant to take benefit of the lease. This section seeks to examine the peculiarities of student accommodation and how the doctrine of frustration applies.

It should be noted that most off-campus accommodation spaces and private hostels do not charge rent payment on a university calendar sessional basis. Rather, rents are collected annually from students without regard to the university calendar.

On the 23rd of March, 2020, the federal government and the National University Commission issued a circular that all universities nationwide should be closed as a response measure to containing the outbreak of covid-19. The federal government found legal refuge in the Quarantine Act, and the Infectious Disease Act. As at the time of writing this article, it has been 2 months since students have left their hostels unoccupied with no resumption date yet in sight. Many students had paid their rents before the outbreak of the pandemic.

One of the instances where the doctrine of frustration would apply as highlighted in the case of MALIK v. KADURA FURNITURE & CARPETS CO. LTD (supra) is that there is a change in law or statutory impossibility. It is submitted that the order of the federal government done in accordance with relevant laws that all universities be closed fits into this circumstance. It is submitted that the operation of those particular legislations which had remained dormant for ages is a change in law and would operate as frustration since it denied students the benefit of the rent they paid for.

Also, one of the instances where the doctrine of frustration would apply is cancellation by unforeseen circumstances or unexpected events. It is not in doubt that the outbreak of the pandemic is an unforeseen circumstance which nobody saw coming. Hence, it is submitted that this pandemic fits into this circumstance too.

In the case of EMMANUEL OSELOKA ARAKA V MONIER CONSTRUCTION CO (NIG) LTD (supra), the Court held that the landlord could not recover rents payment from the tenants regardless of the fact that the furniture of the defendant was still in the house and keys still in the possession of the defendant as that does not prevent the doctrine of frustration from applying to a case of lease. Hence, the fact that the furniture of students remains in the house and the keys still in the possession of the students does not prevent the doctrine of frustration from applying.

A likely argument that can be raised by landlords is that the customary terms of the rent agreement is that the students would still pay even if they don’t occupy the house. Vacation periods when students are not on campus and the rents still count could be alluded to as evidence of this custom. However, this argument is bound to fail. This is because vacation periods do not amount to frustration on lease agreements. It should be recalled that one of the elements of frustration is that the intervening situation was unforeseen at the time of the agreement. It is not in doubt that holidays and vacations are situations that are not only foreseeable but expected to happen as they are even contained in the academic calendar. Hence, this situation and the vacation periods are radically different and alluding to such would not avail landlords.

From the foregoing, it is submitted that students have legal grounds to refuse to pay for the duration that their hostels are left unoccupied as a result of the pandemic.

Conclusion

This treatise has argued that a student has legal grounds to demand the exclusion of the duration of the pandemic in determining the expiration of rent. In practice however, these arguments might not benefit students despite being desirous of putting them to use. This is because no student is likely to sue their landlord. Such student might be sent packing. In view of the multitude of students desperate to take possession of the same house/apartment even at a higher fee, a feasible way to resolving issues in this regard is straightforward; students and university managements should collaborate to negotiate with landlords to reach concessions in this regard.

ABOUT THE AUTHOR

Akinkunmi Abolade

Abolade Akinkunmi is a final year student of Law at the Obafemi Awolowo University. He is passionate about human rights law and dispute resolution practice. He believes everyone should be treated with utmost respect without discrimination and the law should be instrumental in this regard. He continuously writes on human rights law and its intersection with other areas of law.

Akinkunmi Abolade

Featured Image Source : https://www.butlins.com/

7 comments

  1. A brilliant submission! However, the question before the court would be;
    1. Whether or not the victim of the said frustration are as of his relationship with the landlord a student or a tenant.
    2. What was the frustration n the circumstances of the case, COVID 19 or the FG and NUC circular for closure of schools.
    3. If no 2 above is answered in the affirmative for Covid, was the said pandemic such that prevented tenant from executing the tenancy?
    4. If no 2 above is answered in the affirmative for the FG and NUC circular, does the said circular affecting academic sessions prevent the tenant from executing the tenancy?
    5. Should the frustration in a student-university agreement affect a totally different agreement between a tenant and his landlord?

    The answers to these would do justice to the case.

    2.
    Whether or not the FG and NUC circular for closure of schools prevents the said tenan

    Like

  2. Tijani, thanks for the comment and analysis. However, I believe my answers to this questions/issues before the court are contained in the article. However, let me restate some of my opinions here. The pandemic and the order of the federal government both constitute the frustration. Several parts of the series of events constitute the frustration. A change in law which happened here would amount to frustration. Also, an unforseen event which happened here would amount to frustration. (Refer to relevant parts of the article in this regard.) So, whatever the cause of the frustration, I strongly believe there is frustration.

    Thank you so much for reading through and taking time to deliberate on it.

    Like

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