By Ali Elias
The Lagos State House of Assembly has proposed a new tenancy law that could significantly ease the financial burden on tenants by reducing the agency fee or commission on annual rent from 10 percent to five percent.
The Speaker of the House, Mudashiru Obasa, made the disclosure on Wednesday during a one-day public hearing on the proposed bill. He was represented at the session by Stephen Ogundipe, a lawmaker.
According to Obasa, Section 3(4) of the draft law makes it an offence for any agent to collect more than five percent of annual rent. Violators, he said, would be liable to a refund, two years’ imprisonment, or a fine of up to ₦1 million.
The Speaker emphasized the urgency of reforms in the housing sector, noting that Lagos’ housing deficit has worsened in recent years. “The housing deficit in Lagos has risen by 15 percent, from 2.95 million units in 2016 to 3.4 million units in 2025,” he said. “Over 70 percent of Lagos residents are tenants, with many spending 40 to 60 percent of their income on rent.”
Obasa said the proposed bill would provide a comprehensive framework for tenancy agreements, rent payments, property maintenance, and the process for recovery of premises.
Olusegun Ege, Chairman of the House Committee on Housing, said the bill contains four parts and 45 clauses, covering the rights and obligations of parties, tenancy agreements, rent payment, and dispute resolution procedures.
Ege added that the legislation introduces clear eviction guidelines to prevent arbitrary removal of tenants, a provision he described as crucial to protecting families and small businesses from instability.
Quoting directly from Section 3(4), the committee chairman said: “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, professional bodies present at the public hearing expressed reservations about the proposed cap, arguing that the five percent ceiling conflicts with established professional charges and could undermine industry standards.
The bill, if passed into law, would mark a major shift in the Lagos housing market, balancing the interests of landlords, tenants, and agents, while attempting to address the city’s growing housing crisis.