The Lagos State House of Assembly has proposed a new tenancy law that seeks to reduce the maximum agency fee on annual rent from 10 percent to five percent.
The bill, which underwent a public hearing on Wednesday, aims to ease the financial burden on tenants while imposing strict penalties on violators.
Speaker Mudashiru Obasa, represented by lawmaker Stephen Ogundipe, disclosed that Section 3(4) of the draft legislation makes it illegal for property agents to charge more than five percent of a year’s rent as commission.
Offenders risk refunding excess fees, facing a N1 million fine, or serving up to two years in prison. Obasa emphasised that the bill is part of broader efforts to address Lagos’ worsening housing crisis, where the deficit has risen by 15 percent since 2016, reaching 3.4 million units in 2025.
With over 70 per cent of residents living in rented homes—many spending nearly half their income on rent—the proposed law seeks to establish clear guidelines for tenancy agreements, rent payments, property upkeep, and eviction procedures.
Committee Chairman on Housing, Olusegun Ege, explained that the bill’s 45 clauses outline the rights and obligations of landlords and tenants, structured rent payment plans, and formal dispute resolution mechanisms. It also includes safeguards against arbitrary evictions, which Ege described as critical for housing and business stability.
However, the bill faced opposition from real estate professionals at the hearing, who argued that the five percent cap conflicts with industry standards.
Despite these concerns, lawmakers maintain that the reform is necessary to make housing more affordable in Nigeria’s most populous city, where rising costs have pushed many into substandard living conditions. If passed, the law could significantly alter rental practices while testing the balance between consumer protection and professional fees in Lagos’ booming property market.
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