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Lagos Moves to Slash Agency Fees, Curb Rent Hikes With New Tenancy Bill

Tenancy Bill

Lagos Moves to Slash Agency Fees, Curb Rent Hikes With New Tenancy Bill

The Lagos State Government has unveiled a proposed tenancy law aimed at overhauling the relationship between landlords, tenants and estate agents, with measures designed to curb arbitrary rent increases, excessive agency charges, fraudulent property transactions and prolonged tenancy disputes.

The proposed Lagos State Tenancy and Recovery of Premises Bill, 2025, currently before the Lagos State House of Assembly, seeks to replace the existing tenancy framework with a more comprehensive regime covering rent payments, advance rent, agency fees, eviction, dispute resolution and the conduct of landlords and property agents.

The bill, however, has not yet become law and remains subject to legislative consideration and possible amendments.

One of the most significant provisions in the proposed legislation is the plan to reduce estate agency fees to five per cent of annual rent.

The proposal has attracted considerable attention because tenants in Lagos routinely complain about the financial burden of agency, agreement and other charges demanded when securing accommodation.

The Lagos State House of Assembly had previously stated during deliberations on the bill that the agency commission would be reduced from the existing 10 per cent benchmark to five per cent. An agent who charges above the prescribed rate under the proposed law could face sanctions, including refund of the excess, a fine of up to N1 million or imprisonment for up to two years, or both.

The bill also proposes compulsory registration of estate agents with the Lagos State Real Estate Regulatory Authority, LASRERA.

Under the proposal, operating as an estate agent without the required registration would become an offence. The government says the measure is intended to check the activities of fraudulent and unregistered operators accused of collecting money from unsuspecting members of the public, engaging in multiple transactions on the same property and imposing questionable charges on prospective tenants.

One-year limit on advance rent

Another major proposal is the restriction on advance rent.

The draft legislation seeks to prevent landlords from demanding excessive periods of rent upfront. Under the proposed framework, a new tenant would generally not be required to pay more than one year’s rent in advance, while sitting tenants who ordinarily pay monthly would not be compelled to make excessive advance payments.

The measure is expected to address one of the biggest challenges facing accommodation seekers in Lagos, where prospective tenants often complain of demands for one, two or even more years’ rent before they are allowed to occupy a property.

Landlords may face scrutiny over rent increases

The proposed law also seeks to tackle what it describes as unreasonable increases in rent.

Under the bill, a tenant who considers a rent increase excessive could challenge it, with the court empowered to consider factors including rents charged for comparable properties and evidence presented by both the landlord and tenant.

The proposal is significant in a city where rapid increases in rental values have become a major concern for residents, particularly low- and middle-income earners.

The bill also provides protection for tenants who challenge an allegedly unreasonable increase, including restrictions on eviction while the matter is before the court.

Faster resolution of landlord-tenant disputes

Perhaps one of the most ambitious aspects of the proposed legislation is its attempt to speed up tenancy-related litigation.

The bill provides for tenancy proceedings through originating summons and proposes mechanisms designed to shorten the time between filing a case and hearing it.

It also empowers courts to sit on weekends and public holidays for tenancy matters and provides for virtual hearings.

The proposed framework further provides for mediation as an alternative to prolonged litigation, with the aim of resolving disputes more quickly and reducing the backlog of landlord-tenant cases.

The government has argued that faster dispute resolution would benefit both landlords and tenants by reducing the cost and uncertainty associated with lengthy court proceedings.

Tenants to provide evidence

The Lagos State Commissioner for Housing, Moruf Akinderu-Fatai, said tenants seeking legal action would be required to provide evidence including proof of rent payments and updated utility bills.

Protection against self-help eviction

The proposed framework also strengthens legal protection against arbitrary eviction and other forms of self-help.

The draft bill provides for lawful procedures that landlords must follow when seeking possession of their properties. It seeks to discourage practices such as forcibly ejecting tenants, interfering with access to premises or taking other unilateral measures without following due process.

It also contains provisions relating to abandoned premises, recovery of possession and enforcement of court orders.

Service charges, deposits and professional fees

The bill goes beyond rent and agency commissions to address other financial issues associated with tenancy.

Among the proposed provisions are rules concerning service charges, facility and security deposits, as well as professional fees.

The draft framework seeks greater transparency in the handling of tenants’ money and provides for accountability concerning service charges and refundable deposits. Legal reviews of the bill indicate that security deposits would generally be refundable, subject to documented deductions for damage or other legitimate claims.

LASRERA intensifies enforcement

The proposed reforms come against the backdrop of increased enforcement by LASRERA against fraudulent operators in Lagos’ property market.

The Commissioner for Housing disclosed that the regulatory agency recovered more than N270 million from fraudulent estate agents between 2025 and 2026.

The government says the enforcement campaign, combined with the proposed legislation, is intended to restore confidence in the state’s real estate sector and protect residents from exploitation.

Stakeholders raise concerns

While the proposed reduction in agency fees has been welcomed by tenant advocates, housing stakeholders have also raised concerns about possible loopholes.

Spaces for Change, which participated in the 2025 public hearing on the bill, warned that agents could attempt to circumvent a five per cent cap by introducing additional charges under different descriptions.

The organisation recommended that the prescribed five per cent ceiling should cover other related charges in order to prevent agents from simply shifting costs from “agency fee” to documentation, inspection or other charges.

There have also been calls for the bill to provide clearer safeguards around the collection, storage and use of tenants’ personal information, given the large amount of sensitive data prospective tenants routinely submit to landlords and estate agents.

Bill still awaiting passage

Despite the publicity surrounding the proposed reforms, tenants and landlords have been urged not to assume that the new provisions are already enforceable.

The Lagos State Tenancy and Recovery of Premises Bill remains a proposal before the Lagos State House of Assembly. Until it is passed by the Assembly and receives the necessary assent, the existing tenancy law remains the applicable legal framework.

If eventually enacted, however, the proposed law could represent one of the most far-reaching changes to landlord-tenant relations in Lagos in years, particularly through its proposed five per cent agency-fee cap, restrictions on advance rent, compulsory registration of agents, stronger protections against arbitrary rent increases and faster mechanisms for resolving tenancy disputes.

For millions of Lagos residents struggling with rising accommodation costs, the central question will now be whether the proposed reforms can move from the pages of the bill to effective enforcement across the state’s notoriously expensive and complex rental market.