The Lagos State House of Assembly has unveiled a proposed tenancy law seeking to cut the maximum agency fee or commission on annual rent from 10 percent to five percent.

Speaker of the House, Mudashiru Obasa, made the announcement on Wednesday during a one-day public hearing on the bill. Represented by lawmaker Stephen Ogundipe, Obasa said Section 3(4) of the proposed law makes it illegal for any property agent to charge more than five percent of a year’s rent as commission.

Under the bill, offenders could be compelled to refund excess charges, face up to two years’ imprisonment, or pay a fine of ₦1 million.

Highlighting the urgency of the measure, Obasa pointed to Lagos’s growing housing crisis, noting that the state’s housing deficit has risen by 15 percent in less than a decade from 2.95 million units in 2016 to a projected 3.4 million units by 2025.

He added that more than 70 percent of residents live in rented accommodation, with many spending between 40 and 60 percent of their income on rent.

The Speaker explained that the bill aims to create a clear framework for tenancy agreements, rent payment structures, property maintenance obligations, and legal processes for recovering premises.

Committee Chairman on Housing, Olusegun Ege, said the draft bill contains four sections and 45 clauses, covering landlord and tenant rights, rent payment regulations, and formal dispute resolution processes.

He stressed that the legislation includes defined eviction procedures to protect tenants from unlawful displacement, which he described as crucial for household and business stability.

Section 3(4) of the draft stipulates that any commission or agency fee must be agreed upon by the agent and the party landlord or tenant who engaged them, but the fee cannot exceed five percent of one year’s rent.

However, several professional associations at the hearing opposed the cap, arguing that it conflicts with existing professional service rates in the real estate sector.