Lagos Assembly Proposes Law to Slash Agency Fees on Rent, Set Clear Tenancy Guidelines

The Lagos State House of Assembly has introduced a new tenancy bill aimed at reducing the maximum agency or commission fee on annual rent from 10 percent to five percent. This initiative was unveiled during a one-day public hearing held on Wednesday. Representing Speaker Mudashiru Obasa at the event, lawmaker Stephen Ogundipe stated that Section 3(4) of the bill criminalizes the collection of agency fees exceeding five percent of the annual rent.

The proposed law includes strict penalties for non-compliance, ranging from the mandatory refund of any excess amount charged to a fine of ₦1 million or imprisonment for up to two years. Speaker Obasa also expressed concern over Lagos’s escalating housing challenges, revealing that the housing deficit had risen from 2.95 million units in 2016 to 3.4 million units in 2025—an increase of 15 percent. He emphasized that more than 70 percent of Lagos residents live in rented housing, with many allocating between 40 to 60 percent of their income to rent payments.

According to the Speaker, the bill is designed to provide a comprehensive legal framework governing tenancy agreements, rent structures, property maintenance responsibilities, and lawful procedures for recovering premises. Committee Chairman on Housing, Olusegun Ege, further explained that the bill consists of four sections and 45 clauses. These provisions cover landlord-tenant obligations, rent payment timelines, formal dispute resolution mechanisms, and guidelines for proper evictions to prevent arbitrary tenant displacement.

Despite the bill’s protective intentions, some professional associations at the hearing voiced opposition to the five percent cap, arguing that it contradicts prevailing professional service rates in the real estate industry.