The Lagos State Government, through the Lagos State Real Estate Regulatory Authority (LASRERA), has recently reiterated its commitment to the enforcement of the Ten percent (10%) statutory cap on agency fees chargeable in tenancy transactions.
This development comes amidst growing concerns from residents over inflated fees charged by estate agents and legal practitioners during the negotiation and execution of tenancy agreements.
Legal Basis for the 10% Cap
The Lagos State Tenancy Law, 2011 (“the Law”) provides the primary legal framework regulating landlord-tenant relationships in Lagos State.
Notably, Section 4 of the Law addresses the issue of agency and legal fees, stipulating as follows:
Section 4(3) – “Where an agreement is prepared by a legal practitioner, the total fees payable shall not exceed 10% of the total rent.”
Section 4(4) – “The agency fee payable to an agent by a landlord or a tenant for services in respect of a letting shall not exceed 10% of the total rent.”
These provisions are clear and unequivocal. They impose a statutory ceiling of 10% each on legal and agency fees, with a combined cap of 20% of the total rent payable in any tenancy arrangement. The intention of the law is to curb exploitative practices and ensure fairness and affordability in housing transactions, especially in a densely populated and economically diverse state like Lagos.
LASRERA’s Enforcement Strategy
In line with the above legal provisions, LASRERA has embarked on a state-wide compliance drive aimed at sanitizing the real estate sector.
The Authority has advised tenants and landlords alike to engage only registered estate agents and legal practitioners who are conversant with the Tenancy Law and committed to ethical practice.
The Special Adviser to the Governor on Housing, Hon. Barakat Odunuga-Bakare, has emphasized that the law is binding on all parties and any agent found violating the 10% limit risks regulatory sanctions, including delisting from LASRERA’s register, fines, and possible prosecution for unfair trade practices.
Implications for Tenants and Practitioners
The statutory cap has several legal and practical implications:
- Tenants are protected from arbitrary and excessive They are encouraged to request itemized invoices and report any instance where agency or legal fees exceed the statutory limits.
- Landlords and agents must adhere strictly to the 10% cap or risk facing legal consequences, including restitution to aggrieved
- Legal practitioners preparing tenancy agreements are also subject to the 10% fee limit and must not collude with landlords or agents to charge above the
- Unregistered agents or firms operating outside the purview of LASRERA may be considered illegal operators, and their contracts or agency arrangements could be challenged as contrary to public policy.
Recommendations and Conclusion
To further strengthen compliance, the Lagos State Government should:
- Intensify public awareness campaigns on tenant rights;
- Prosecute defaulters to serve as a deterrent;
- Encourage digital reporting mechanisms for overcharging;
- Regularly update the LASRERA register for public
The 10% cap on agency and legal fees is not merely a guideline—it is law. The insistence on its enforcement is a welcome step toward ensuring that real estate transactions in Lagos are fair, transparent, and accessible. As legal professionals and stakeholders, adherence to the provisions of the Lagos State Tenancy Law is both a legal obligation and a civic duty.
