There are strong indications that landlords in Lagos may lose more rental income as the Lagos State government reviews its existing Tenant Protection Law to further empower tenants across the state.
Lagos rental market remains one of the most demanding in the country, with exorbitant rent charges and unjustified rent hikes spiralling far beyond affordability.
In Lagos, Abuja, Port Harcourt, and other major cities, housing costs now consume more than 50 per cent of residents’ monthly income, a figure that far exceeds the United Nations’ recommended benchmark of 30 per cent.
The Lagos State Tenancy Law of 2011 was the government’s first major attempt to regulate landlord-tenant relationships. However, with the state’s population now exceeding 22 million and growing at 3.4 per cent annually, coupled with weak enforcement and persistent inflation, there has been mounting pressure for reform.
In July 2025, the Lagos State House of Assembly introduced the Tenancy and Recovery of Premises Bill, designed to repeal and replace the 2011 law.
The new bill seeks to tighten rules on rent advances, streamline eviction processes, regulate agent commissions, and introduce digital dispute resolution mechanisms. Predictably, reactions have been mixed: tenants see a possible lifeline, while landlords and developers fear the bill could erode investment returns.
Estate agents, on their part, worry about shrinking margins and tighter regulation.
A major highlight of the proposed legislation is its protection of tenants from exploitative practices by agents charging between 10 and 15 per cent commission, often with hidden charges and ‘development levies.’
However, critics warn that unregistered informal agents may simply sidestep the law, creating a parallel unregulated market.
Under the new bill, anyone engaged as an agent, whether by landlord or tenant, must be duly registered under the Lagos State Real Estate Regulatory Authority (LASRERA) Law 2021 (Section 3(1)).
The bill further caps agent commissions at five per cent of one year’s rent (Section 3(4)) and criminalises dual collection, overcharging, or failure to remit funds, with penalties of up to N1 million in fines or two years’ imprisonment (Section 3(5)).
Stakeholders say the proposed reforms tackle one of Lagos’ most persistent housing problems, multi-year rent advances, where tenants are forced to pay lump sums upfront, often with hidden charges.
While some tenants have welcomed the move, others fear that monthly payments could embolden landlords to raise rents arbitrarily. Conversely, many salary earners argue that annual payments align better with their income cycles.
Speaking on the development, the Lagos State Commissioner for Housing, Moruf Akinderu-Fatai said introducing monthly or quarterly rent payment options will give residents more breathing space and reduce the stress of sourcing large lump sums for rent payments.
He disclosed that the government is engaging landlords, developers, and other stakeholders to address enforcement and payment system challenges before implementation.
Akinderu-Fatai added that the initiative is part of broader efforts to sanitise the real estate sector, curb fraudulent practices, and protect residents from unregistered agents and developers.
He further emphasised that all real estate practitioners, including agents, brokers, developers, and facility managers, must register with LASRERA or face legal consequences.
He also urged estate agents and associations such as the Estate Rent Commission Agents of Nigeria (ERCAN) to take a firm stand against quackery and arbitrary rent increases, while supporting the promotion of flexible rent payment models.
In his contribution, Principal Partner at Ismail & Partners, Gbenga Ismail, cautioned that while the proposed monthly and quarterly rent payment system may ease tenants’ burdens, it could also affect property availability across Lagos.
He warned that supply shortages could emerge, impacting the growth and stability of the rental market.
According to him, the government must complement the tenancy reforms with broader housing policies, including improving access to affordable land, promoting local building materials, and supporting housing finance schemes.
Citing the Advance Rent Section of the proposed law, 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 in respect of any premises; and it shall be unlawful for a sitting tenant to offer or pay rent in excess of three months in respect of any premises.”
Brief summary of the key proposed changes in the latest tenancy-law review in Lagos State:
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Landlords and tenants would work under a newly-drafted bill titled “A Bill for a Law to Regulate the Relationship between Landlords and Tenants in Lagos State” — already passed second reading.
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The bill would prescribe clearer frameworks for rent payment terms (monthly vs yearly), advance rent limits, and eviction notice periods to reduce uncertainty for tenants.
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It aims to define the roles and conduct of landlords, tenants and agents, including registration requirements for agents and transparent remittance/receipting of rents.
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The bill also seeks to regulate eviction procedures, mandating set notice periods (e.g., six months for annual tenants) and prioritising mediation or virtual hearings for quicker dispute resolution.
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Penalties are proposed for breaches: landlords or agents demanding excessive advance rent or abusing process may face fines and imprisonment under the draft legislation.
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Important caveat: Although widely reported, the law has not yet been officially passed into force — the current Tenancy Law (Cap T1 of 2015) still applies until the new bill is enacted.
