Landlords across Lagos may soon face fresh challenges to their rental income as the Lagos State government moves to review its existing tenancy legislation.
The proposed Tenancy and Recovery of Premises Bill 2025, currently before the Lagos State House of Assembly, seeks to repeal and replace the 2011 Tenancy Law, a move expected to significantly alter landlord-tenant relations in Nigeria’s most populous city.
Lagos, with an estimated population exceeding 22 million and an annual growth rate of 3.4 per cent, has one of the country’s most competitive and expensive rental markets. Housing costs now consume over 50 per cent of most residents’ monthly income, far surpassing the United Nations’ affordability benchmark of 30 per cent.
The new bill aims to address long-standing complaints of rent exploitation, weak regulation, and arbitrary charges by landlords and estate agents. It introduces measures to curb multi-year rent advances, streamline eviction procedures, and regulate agent commissions, while encouraging monthly or quarterly rent payments to ease tenants’ financial pressure.
Stricter Rules for Estate Agents
A key provision of the bill targets unregistered agents and excessive commission charges. Under Section 3(1), any person acting as an estate agent—whether for a landlord or tenant—must be registered with the Lagos State Real Estate Regulatory Authority (LASRERA) under the LASRERA Law 2021.
The bill further caps agent commissions at five per cent of one year’s rent and criminalises dual collection or overcharging. Offenders risk fines of up to ₦1 million or imprisonment for up to two years.
These reforms are expected to curb exploitative practices, including hidden “development levies” and inflated service fees that have become commonplace in Lagos’ rental transactions.
However, critics warn that unregistered informal agents may continue to operate outside the regulatory framework, potentially creating a parallel unregulated market.
Monthly Rent Payments: Relief or Risk?
Lagos State Commissioner for Housing, Moruf Akinderu-Fatai, defended the government’s push for flexible rent payment options, saying the initiative would “give residents breathing space and reduce the stress of sourcing large lump sums.”
He disclosed that the government is consulting with landlords, developers, and agents to address enforcement and payment system challenges before implementation.
“This reform is part of broader efforts to sanitise the real estate sector, curb fraudulent practices, and protect residents from unregistered agents and developers,” Akinderu-Fatai said.
He also reaffirmed that all real estate practitioners, including brokers and facility managers, must register with LASRERA or face legal sanctions.
Concerns Over Supply Shortages
Industry stakeholders, however, are cautious. Gbenga Ismail, principal partner at Ismail & Partners, warned that the proposed monthly and quarterly rent structures could reduce housing supply and discourage investment.
“While the new system may ease tenants’ burdens, it could affect property availability across Lagos,” Ismail said. He urged the government to complement the reforms with broader housing policies, such as affordable land access, promotion of local building materials, and enhanced housing finance schemes.
Citing the bill’s Advance Rent Section, Ismail noted: “It shall be unlawful for a landlord or his agent to demand or receive from a sitting tenant rent in excess of three months; and it shall be unlawful for a sitting tenant to offer or pay rent in excess of three months in respect of any premises.”
He added that the government’s approach “appears more protective of tenants than of property owners”, warning that without structural reforms, affordability and investment sustainability will remain elusive.
Legal Protection and Abuse of the System
Property lawyer Lawrence Ndukwe also weighed in, highlighting the growing misuse of tenancy protection laws by a minority of “professional tenants”.
According to Ndukwe, these tenants exploit legal loopholes to delay or avoid eviction, using the courts to stall proceedings indefinitely.
“The law states that no tenant can be evicted without a court order, but some have turned this protection into a weapon against landlords,” he said.
He explained that while illegal evictions now carry heavy fines and possible jail terms, prolonged legal battles leave landlords, especially small-scale ones, financially stranded.
“Landlords who depend on rent for survival are the hardest hit,” he noted. “Some lose months of income because defaulting tenants refuse to leave even after their rent expires.”
Balancing Protection and Profitability
Analysts argue that the new tenancy framework represents a critical balancing act between social protection and economic viability. While tenants may gain more security and flexibility, landlords could face reduced returns and longer vacancy periods.
For the Lagos government, the challenge lies in enforcing compliance, curbing abuse, and ensuring that both tenants and landlords operate within a transparent, sustainable rental ecosystem.
As the Tenancy and Recovery of Premises Bill 2025 moves closer to passage, its ultimate impact on Lagos’ housing market will depend on how effectively the government can blend reform with reality by protecting tenants without stifling property investment.
