Lagos Assembly moves to slash rent agency fees to 5%
Lagos State House of Assembly has proposed a new tenancy law that, if passed, will cut the maximum agency fee or commission on annual rent from the current 10 percent to five percent.
Speaker of the House, Mudashiru Obasa, made the disclosure on Wednesday during a one-day public hearing on the bill. Obasa, who was represented by lawmaker Stephen Ogundipe, said section 3(4) of the proposed legislation makes it an offence for any property agent to charge more than five percent of a year’s rent.
According to him, violators will face strict penalties, including a refund of excess charges, up to two years in prison, or a fine of N1 million.
Obasa also highlighted the growing housing crisis in Lagos, noting that the state’s housing deficit has increased by 15 percent in less than a decade, from 2.95 million units in 2016 to 3.4 million units in 2025. He revealed that over 70 percent of residents live in rented accommodation, with many spending between 40 and 60 percent of their income on rent.
The proposed law, he explained, aims to create a clear framework for tenancy agreements, rent payment structures, property maintenance obligations, and the lawful recovery of premises.
Committee Chairman on Housing, Olusegun Ege, said the draft bill contains four parts and 45 clauses, addressing the rights and responsibilities of landlords and tenants, rent payment rules, and formal dispute resolution processes. He added that the legislation outlines proper eviction procedures to protect tenants from arbitrary displacement, a safeguard he described as essential for household and business stability.
Section 3(4) of the draft bill states: “A commission or agency fee in respect of any tenancy shall be agreed upon by the Agent and the Landlord or Tenant who engaged the agent, and the amount shall not exceed 5% of the amount paid as one year’s rent.”
However, some professional associations at the hearing raised objections, arguing that the proposed five percent cap contradicts existing professional service rates within the real estate sector.
Lagos Assembly moves to slash rent agency fees to 5%
