Lagos lawmakers propose cutting annual rent agency fees to ease tenants’ financial burden significantly.
The draft bill also sets penalties for agents who exceed the new five percent limit.
The Lagos State House of Assembly has introduced a draft tenancy law that seeks to reduce the maximum agency or commission fee on annual rent from the current 10 percent to five percent.
Speaker Mudashiru Obasa, represented by lawmaker Stephen Ogundipe, disclosed the proposal on Wednesday during a one-day public hearing. Section 3(4) of the bill makes it an offence for property agents to charge above the five percent limit, with penalties including a refund of excess charges, fines of up to ₦1 million, or a prison term of up to two years.
Obasa said the measure is part of efforts to address Lagos’ worsening housing crisis. The state’s housing deficit has risen by 15 percent over the past decade, from 2.95 million units in 2016 to 3.4 million in 2025. He noted that over 70 percent of residents live in rented homes, with many spending between 40 and 60 percent of their income on rent.
The bill aims to establish a clear legal framework for tenancy agreements, rent structures, property maintenance duties, and lawful eviction procedures. It also seeks to protect tenants from arbitrary displacement and promote fair dealings between landlords, tenants, and agents.
Chairman of the House Committee on Housing, Olusegun Ege, explained that the draft contains four parts and 45 clauses, covering the rights and obligations of all parties, rent payment regulations, and dispute resolution mechanisms.
However, some professional associations voiced opposition, arguing that the proposed five percent cap conflicts with existing service rates in the real estate sector and could undermine agents’ earnings.
If passed, the law will significantly lower rental transaction costs for tenants in a city where housing affordability remains a pressing challenge.
