Tenants in Lagos continue to grapple with rising costs in the rental market, as agency and legal fees frequently exceed the legally prescribed limits.
For many, the total cost of securing accommodation now rivals or even surpasses the annual rent itself, reflecting a growing disparity between regulation and reality.
Yet, the Lagos State Tenancy Law, 2011, stipulates that agency and legal fees must not exceed 10% of the annual rent each.
In 2025, the Lagos State Real Estate Regulatory Authority (LASRERA) reiterated this position through a series of public directives warning that any charge above the 10% threshold violates state regulations.
Despite these provisions, widespread violations persist across the state’s rental market. Many tenants still pay significantly above the legal limit, especially in areas dominated by informal agents.
This raises concerns about weak enforcement, unregulated practices, and the growing affordability crisis facing renters in Nigeria’s most populous city.
Tenants bear the burden of non-compliance
For Stainless Precious, a tenant in Erunwen, Ikorodu, the reality of renting proved far more expensive than anticipated. With an annual rent of N400,000 for a one-bedroom apartment, he eventually paid an additional N400,000 in charges, effectively doubling the cost of moving in.
“For N400,000 basic rent, I paid N150,000 as agency fee and another N150,000 for legal fees, each equal to 37.5% of the rent,” Precious told Nairametrics.
He also paid a refundable N100,000 as a damages deposit, representing 25% of the rent, alongside N15,000 in viewing fees to the agent before securing the apartment. His agent, however, was not registered with the Nigerian Institution of Estate Surveyors and Valuers (NIESV), allowing him to operate outside professional standards and regulatory oversight.
A similar situation played out for Daniel Iwuoha, a resident of Maya, Ikorodu. The basic rent for his one-bedroom apartment was N150,000, but the total cost, including agency and legal fees, rose to N240,000.
Like Precious, Iwuoha dealt with an informal agent unaffiliated with any recognized professional body, highlighting a pattern common in many parts of Lagos where informal intermediaries dominate property transactions.
These accounts underline how the 10% rule has become more of a guideline than an enforceable standard in many neighbourhoods, especially within the city’s expanding suburbs and informal settlements.
Where compliance exists: High-end markets and accredited agents
While widespread violations persist across Lagos’ rental market, a few areas demonstrate closer adherence to the 10% cap. These are typically upscale neighbourhoods where transactions are handled by licensed estate surveyors and registered legal practitioners operating under professional standards.
Bukola Ekunola, an accredited estate surveyor and valuer with the Nigerian Institution of Estate Surveyors and Valuers (NIESV), told Nairametrics that his firm strictly applies the 10% agency fee, while legal fees for tenancy agreements are also capped at 10% of the annual rent.
“Our firm keeps strictly to the 10% ceiling as required by law,” Ekunola said.
“Transactions in premium locations are generally more structured because professionals are directly involved and subject to regulatory oversight.”
- For example, a three-bedroom apartment on Victoria Island rented at N16 million annually attracts N1.6 million each for agency and legal fees. Similarly, a four-bedroom unit in Lekki leased for N8 million per year carries N800,000 for each category of fee.
- Temple Ugwu, Lead Partner at Bluemeen Partners, also confirmed adherence to the statutory limits. He explained that his firm charges a 10% agency fee and a reduced 5% legal fee since it retains an in-house legal team.
“We believe 10% for agency is fair, and whenever rent increases, what accrues to the firm rises proportionally,” Ugwu said.
Such compliance, however, remains concentrated within formal property markets where professionals are bound by regulatory bodies like NIESV and the Estate Surveyors and Valuers Registration Board of Nigeria (ESVABON). Outside these controlled environments, unregistered agents continue to set arbitrary rates with little or no accountability.
Enforcement challenges and market pressure
Experts attributed the persistent violations of Lagos’ 10% fee regulation to weak enforcement, limited housing supply, and the dominance of informal agents in the property market.
Olabisi Odusanya, a real estate analyst, explained that while the 10% ceiling is well-intentioned, its implementation has been undermined by structural market challenges.
“Enforcement of the 10% regulation remains difficult in a city where housing demand far exceeds supply,” Odusanya told Nairametrics.
“Tenants often agree to pay more just to secure available units, and informal intermediaries have become a fixture in transactions that rarely come under government oversight.”
She added that the government’s directives alone cannot correct market imbalances without broader reforms to expand housing availability and strengthen professional regulation.
“Fee caps will continue to be ineffective unless the supply side improves and agency practices are better formalized,” she said.
Similarly, Temple Ugwu, Lead Partner at Bluemeen Partners, noted that while professional bodies such as the Estate Surveyors and Valuers Registration Board of Nigeria (ESVABON) and the Nigerian Institution of Estate Surveyors and Valuers (NIESV) enforce compliance within their membership, their authority does not extend to the growing number of unregistered agents who operate independently.
“The challenge is not with licensed professionals but with individuals who present themselves as agents without any certification,” Ugwu said.
“They operate outside the regulatory framework, making it difficult for the law to be uniformly applied.”
These perspectives reflect a broader consensus among housing experts that the gap between Lagos’ tenancy regulations and real-world practice stems from both weak enforcement and the informal nature of the city’s property market.
Government action and policy framework
The Lagos State Tenancy Law of 2011 stipulates that agency and legal fees must not exceed 10% of the annual rent each, creating a combined ceiling of 20% for tenancy-related charges. The provision was meant to curb arbitrary pricing, enhance transparency, and protect renters from exploitation.
- Nairametrics had earlier reported that the Lagos State Government reaffirmed this rule through new policy directives in 2025, following growing complaints from tenants about excessive fees.
- The government also mandated that all real estate agents and property consultants must register under the Lagos State Real Estate Regulatory Authority (LASRERA).
- The enforcement framework, which took effect in June 2025, made it illegal to operate without LASRERA accreditation. The initiative sought to formalize agency activities, curb fraudulent practices, and promote accountability.
LASRERA has since partnered with professional bodies such as the Nigerian Institution of Estate Surveyors and Valuers (NIESV) to monitor compliance.
