Lagos moves to ban the 20% "agent fee"—But there’s a catch

• Lagos introduces a new tenancy bill to legally cap outrageous agency and agreement fees at a strict 5%.

• Unregistered house agents face up to 2 years in prison and ₦1 million fines for defrauding tenants or withholding rent.

• Landlords will be strictly banned from demanding more than one year's rent in advance from new tenants.

• This highly anticipated rent relief bill is still in parliament and has not yet been officially passed into law.

We’ve all been there: you find a ₦2 million Lagos apartment, but you somehow need ₦3.5 million to actually move in. 

Between agency fees, legal fees, and caution deposits, the extra charges can easily wipe out your savings before you even pack a single box.

To tackle this nightmare, the state government recently unveiled a massive legislative overhaul: the Lagos State Tenancy and Recovery of Premises Bill.

The proposed law takes a direct swipe at the unregulated fees bleeding tenants dry.

However, before you go celebrating, there is a major catch you need to know: this bill has not actually been passed into law yet.

It is currently moving through the committee stages at the Lagos State House of Assembly.

Until the Governor signs it, the old 2011 rules apply, meaning agents can continue to demand high fees.

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But if this new bill does pass, here is exactly how it plans to change the Lagos rental market forever:

• The death of the 10% + 10% hustle: The unwritten rule of paying 10% for "Agency" and 10% for "Legal" will become illegal. The new bill strictly caps agent commissions at 5% of the annual rent.

But we’ve heard this story before. This isn't the first time Lagos has tried to slash agent cuts. Previous regulations, including laws passed in 2015 and 2022, attempted to cap fees at 5%.

Agents simply ignored those rules, banking on the city's housing shortage to force desperate tenants into under-the-table cash agreements. 

• Mandated licence for all agents: Anyone practising real estate must formally register with the Lagos State Real Estate Regulatory Authority (LASRERA). Operating without a license will become a criminal offence.

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• Jail time for bad behaviour: Agents who sit on tenant money or disappear will face heavy penalties, including fines up to ₦1 million, a prison term of up to two years, or both.

• Banning "two years upfront": Landlords will be strictly prohibited from demanding more than one year’s rent upfront from new tenants. For existing tenants, advance rent will be capped at three months.

• The push for monthly and quarterly rent: While the law doesn't legally mandate monthly payments for new leases (as doing so might anger property investors who rely on annual sums to build and maintain houses), the Lagos State Government is trying to shift the culture.

The Ministry of Housing is actively collaborating with the Estate, Rent and Commission Agents Association of Nigeria (ERCAN) to voluntarily promote instalment structures. The goal is to align rent cycles with the monthly salary structures of regular workers.

• A shield against crazy rent hikes: If your landlord slaps you with an outrageous rent increase, Section 33 of the bill gives you the legal right to challenge it in court.

For now, the government is using these announcements to warn exploitative agents and landlords that a massive clampdown is on the horizon. 

Until it officially passes, the power still belongs to the landlords, but the state has signalled that the clock is ticking on the Lagos rental bottleneck.

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