Residents, especially tenants and those looking for accommodation in choice locations, have accused estate agents of deliberately frustrating the Lagos Tenancy Law, which seeks to regulate the rights and obligations of landlords and their tenants, for their own selfish interests.
Accommodation seekers, who spoke to our correspondent, said they were being made to pay the agents, who act as the link between them and the landlords, two years’ agency fees and commission, whereas the owners of the properties were collecting one year rent as specified by the law.
“When I rented my apartment in River Valley Estate, I paid two years agency fee and commission. I paid N700,000 for a three-bedroom apartment and another N280,000 to the agent as commission,” a resident, who spoke on the condition of anonymity, said.
Section 4 subsection 1 of the Lagos State Tenancy Law, 2011, a copy of which was obtained by our correspondent, states, “It shall be unlawful for a sitting tenant to offer or pay rent in excess of one (1) year for a yearly tenant and six (6) months for a monthly tenant in respect of any premises.”
It adds that any person who receives or pays rent in excess of what is prescribed shall be guilty of an offence and upon conviction, pay a fine of N100,000 or three years’ imprisonment.
Section 4 subsection 4 of the law states, “It shall be unlawful for a new or would be tenant to offer or pay rent in excess of one (1) year in respect of any premises.
This provision of the law does not, however, cover highbrow areas such as Apapa, Ikeja GRA, Ikoyi and Victoria Island, where rent on business and residential premises are subject to the discretion of the landlord.
The law, however, did not adequately cover the issue of agency and what should be paid to the agent as Section 11 only states, “From the commencement of a tenancy, it shall be the duty of the party who engages the services of a professional in respect of the tenancy agreement to pay the fees for such professional services.”
Investigation by The PUNCH revealed that agents in the state were charging at least two years’ commission, which is 20 per cent of the rent, and another 20 per cent as agency fee.
Another resident, Mrs. Jane Ademola, said she had to abandon a property she was interested in at the Magodo area of the state when she was asked to pay two years’ agency and commission.
“When I made the calculation, I found out that I was going to pay more than one third of my rent to the agent,” she said.
According to Ademola, the agency aspect of the law has failed to properly address the problems of tenants in the state.
An agent, Mr. Niyi Olabiyi, said he and his colleagues prefer to charge two-year commission for many reasons.
“Most times you could have more than three agents marketing a house of about N300,000 for instance. How are we expected to share N30,000 among ourselves after several days or weeks of rigorous marketing and also cover the amount we must have expended on telephone calls?” he said.
He added that it was a common practice for agents in the state to collect two years’ commission and agreement fees and that tenants were not complaining.
The Attorney-General and Commissioner for Justice, Lagos State, Mr. Ade Ipaye, was unavailable for comments when contacted, but an official of the ministry said the law did not make provision for agency regulation because it was a business venture.
However, a former President of the Nigerian Institution of Estate Surveyors and Valuers, Mr. Bode Adediji, said only quacks could indulge in such a practice.
“In discussing estate agents in Nigeria, you have to distinguish registered agents from quacks. No registered agent will request a two-year fee when the landlord is taking one year rent,” he said.
Adediji also blamed the situation on the housing crisis in the country adding, “Nigeria’s housing crisis has brought with it painful experiences. What the government should do is to ensure adequate supply of housing so that prices will crash.”
He said the idea of paying more than one year fee to an agent was unacceptable.
The Chairman, Lagos State Chapter of the Estate, Rent and Commission Agents Association of Nigeria, Mr. Godwin Alenkhe, said most agents taking two years agency fee and commission were doing illegal business.
