In a move aimed at easing the burden on tenants, the Lagos State House of Assembly is proposing a new Tenancy Law that will slash property agency fees from 10% to a maximum of 5% of annual rent.
The proposal, highlighted in Section 3(4) of the draft bill, was presented during a public hearing on Thursday. It mandates that agreements between landlords, tenants, and agents must not exceed a 5% commission on one year’s rent. Violations of this provision could attract a fine of ₦1 million, up to two years imprisonment, or both, along with a compulsory refund of the excess amount.
Speaker of the House, Rt. Hon. Mudashiru Obasa ably represented, said the bill was necessary to protect tenants from what he called “unfair and arbitrary charges by estate agents.”
“The average Lagos resident is already struggling with rent that consumes nearly half of their monthly income. Reducing agency fees is a practical step to relieve that pressure,” Obasa stated.
He added that the housing deficit in the state had worsened in recent years, rising from 2.95 million units in 2016 to over 3.4 million in 2025, with no signs of slowing down. According to him, more than 70% of Lagos residents currently live in rented accommodation, and many are exploited under the guise of agent commissions and legal fees.
Chairman of the House Committee on Housing, Hon. Ege Olusegun Adebisi, also emphasized the importance of the bill, saying it seeks to bring “transparency, fairness, and accountability” to tenancy agreements.
“This law is not just about reducing fees. It also sets clear rules for landlord-tenant relationships, outlines legal processes for eviction, and ensures that tenants are not thrown out without due process,” Ege said.
The bill has received mixed reactions from stakeholders in the real estate sector, with some agents arguing that a 5% cap could affect their income and service quality. However, many tenants and civil society groups have expressed strong support, calling it a long-overdue reform.
The Assembly has invited further public contributions before the bill moves to the next1 legislative stage.