Lagos Assembly Moves to Slash Agency Fees in New Tenancy Bill

The Lagos State House of Assembly has introduced a proposed tenancy law that would reduce the maximum agency fee or commission on annual rent from 10 percent to five percent.

Speaker Mudashiru Obasa, represented by lawmaker Stephen Ogundipe, disclosed the plan on Wednesday during a public hearing on the bill. He noted that Section 3(4) of the draft law makes it an offence for property agents to charge above five percent of a year’s rent, with penalties including refund of excess fees, up to two years’ imprisonment, or a fine of N1 million.

Obasa also highlighted Lagos’s worsening housing crisis, revealing that the state’s housing deficit has grown by 15 percent in under a decade — from 2.95 million units in 2016 to 3.4 million in 2025. More than 70 percent of residents live in rented homes, spending between 40 and 60 percent of their income on rent.

The proposed legislation seeks to establish clearer tenancy agreements, define rent payment structures, outline property maintenance duties, and formalise lawful eviction and dispute resolution processes.

Committee Chairman on Housing, Olusegun Ege, explained that the bill contains four parts and 45 clauses covering landlord-tenant rights, rent regulations, and eviction safeguards to prevent arbitrary displacement.

However, some professional associations objected to the five percent cap, arguing it conflicts with existing service rates in the real estate industry.