Unprofessional practices by estate agents in major cities are significantly influencing the spike in rent and worsening the housing crisis across the country. Experts blame the lack of oversight and call for reforms such as agent licensing, standardised fees and tenant protection measures to curb the growing illegal charges, VICTOR GBONEGUN reports.
As the cost of living continues to rise across Nigeria, a growing number of tenants in urban areas such as Lagos, Port Harcourt, Kano, and Abuja are pointing fingers at estate agents for the sudden and often unjustified spike in rent.
The Guardian investigations revealed that unprofessional conduct among real estate intermediaries plays a key role in distorting the rental market and pushing affordable housing further out of reach for many Nigerians.
In Lagos, tenants in various areas such as Lekki, Surulere, and Yaba accuse agents of deliberately quoting rents above market value, creating artificial competition among prospective renters. The situation is not different in Port Harcourt, where oil industry influence has driven rent upwards in places like GRA and Trans-Amadi. Estate agents often exploit the presence of expatriates and oil workers to push landlords into charging exorbitant rates.
In Kano, the lack of formal regulation for estate agents has led to widespread exploitation. Many renters complain about hidden fees, lack of receipts, and arbitrary evictions, while in Abuja, the country’s political capital, agents frequently label regular apartments as ‘luxury’ to justify inflated prices, particularly in high-brow areas like Maitama, Asokoro, and Wuse.
The Guardian learnt that the situation is worsened by the absence of regulatory oversight and indiscriminate charges such as the inspection fee, which ranges from 15,000 to N20,000, inflated charges on agreements, caution fees, commissions, finders’ fees, and service charges, in most cases by 100 per cent.
For instance, some of the perpetrators charge as high as 20 per cent and above for agency fees as against the 10 per centprofessional fee approved by law. In some cases, a two-bedroom flat rent of N2.5m may come with N500,000 commission, N500,000 agreement, N400 caution fee and N350,000 as a service charge.
Regrettably, many of these charges are unknown to the practice of estate agency and stakeholders have expressed concerns that the profession has now been taken over by quacks who take undue advantage of the high demand for residential accommodation to rip off Nigerians.
The Guardian gathered that the price of a two-bedroom flat in Port Harcourt; Rivers State ranges from N1.5 million to N3 million yearly. The costs vary by location, size and features. One-bedroom ranges from N500,000 to N1.5 million, and above depending on location, while a three-bedroom could be as high as N3.2 million, N5 million and above.
In Abuja, the cost of two-bedroom ranges from N2.5 million to N5 million and above depending on location and features. A standard three-bedroom in a highbrow location ranges from N4 million, N12 million and above depending also on features and locations.
In Lagos, a recent evaluation of the cost of two-bedroom standard apartments across 12 locations shows that – Iyana Ipaja, Ikeja, Ikorodu, Surulere, Ilasa, Gbagada, Yaba, Lekki, Ajah, Epe, Magodo Phase 1, and Ikoyi, a two-bedroom flat in Ojodu Berger Axis Lagos, which used to be N600, 000 about one year ago now cost between N1.6 million and N1.8/N2 million besides agreement fee, caution fee, inspection, legal fee and other sundry charges.
In the highbrow area, yearly rent for a two-bedroom can be as high as N2.5m. This still comes with additional fees such as N400,000 for agency, N400,000 for legal, and N250,000 for caution, as well as other levies for security and waste.
The Guardian gathered that most of the so-called estate agents sometimes demand two years rent, encourage landlords to hike rents arbitrarily, double the caution fee, increase agreement from 10 per cent to 20 per cent and introduce new charges.
These charges inflate the general cost of tents paid by prospective tenants. Some agents also allegedly coerce renters to pay a two-year rent ‘agent fee’ when the landlord who spent fortunes to build the house demands only a year’s rent.
Despite the existence of the Lagos State Estate Agency Regulatory Law, 2022 which mandates the compulsory registration with the government by everyone involved in real estate transactions, many of these operators are yet to register.
The Lagos State Real Estate Regulatory Authority (LASRERA) has been pivotal in registering practitioners and enforcing compliance within the sector. However, it has been difficult to eliminate touts and unprofessional practices among stakeholders in the real estate business.
Many residents have taken to the streets recently to protest the undue pressure forced on their income by the operations of unprofessional estate agents. With the prevalent of such practices particularly in Lagos, the Commissioner for Housing, Moruf Akinderu-Fatai, had in a statement jointly signed with the
Special Adviser to the Governor on Housing Mr Barakat Odunuga-Bakare, advised professionals and trade groups within the real estate sector to address public concerns regarding the persistent and alarming increases in rent, as well as the imposition of unwarranted fees.
The government said these practices were currently being carried out in violation of the Lagos State Real Estate Transaction Law, which had led to a rise in rent defaults. The Lagos government advised the Association of Estate Agents in Nigeria (AEAN), an affiliate of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) and the Estate, Rent & Commission Agents Association of Nigeria (ERCAAN) to intervene on the matter.
However, housing advocates are calling for swift regulatory reforms, including a licensing body for estate agents, standardised agency fees, and a tenant grievance mechanism. Without intervention, experts warn that Nigeria’s urban housing crisis may deepen, especially for low- and middle-income earners.
Past chairman, Faculty of Estate Agency and Marketing Professional Group, a division of NIESV, Mr Sam Eboigbe, said those engaging in exorbitant charges on tenants are not members of the institution, as professional members can’t be found engaging in such unprofessional conduct.
“I hear people talk about inspection fees, that you must pay for inspection but that is strange to our practice. You also hear finders’ fees and some charging 20 per cent agency fee. To my knowledge, we haven’t increased our fee beyond the normal 10 per cent approved. Those charging 20 per cent inspection fees are not estate surveyors and valuers,” he stressed.
He emphasised that the professional fee according to the Scale of Professional Practice states that the fee is 10 per centand advised the public to engage professionals because they won’t cut corners or engage in unprofessional path.
On complaints about the caution fee, he explained that the fee doesn’t belong to the agent nor the landlord but the tenant. According to him, the caution is a bid to militate against reckless use and destruction of property by tenants. He added that if the tenant is leaving the property and the facilities are still in good shape the money is refunded.
Eboigbe said, “If the government is saying that such fees should stop, practitioners are law-abiding citizens who will genuinely obey. It is also designed to protect the property owner, and it is a ‘win-win’ situation at the end day to have a smooth handover of property. The public has to be aware that there are professionals who have been trained and have the knowledge and experience to engage in the business. In all professions, we have quacks and people who will love to profit from where they haven’t sowed.”
The Vice Chairman, Association of Estate Agents in Nigeria (AEAN), Mr Gbenga Ismail, said the present arbitrary charges on rents by some agents don’t apply to the AEAN, alleging that it is the commission agents creating ridiculous situations and raising commissions arbitrarily.
He expressed worries that they don’t charge percentages as regulated, adding that some of them don’t operate where rent is around N2 million or N20 million. “They operate at the lower strata, where the people are vulnerable. The problem is not with NIESV, nor our Association Estate Agents in Nigeria. With AEAN, it shouldn’t happen, but one or two members may still be operating like that.
“The ceiling of our charge is 10 per cent just like NIESV. There is nothing like an inspection fee. What those people are doing is that by the time you say you want to go and inspect, you go and come back; those are costs. Imagine by the time you do 20 inspections and nothing happens. They are doing self-help,” he said.
He recommended constant communication and advocacy by the government, especially its agencies in charge of housing on what the law says so that everyone is aware, as well as providing phone numbers, which the public can report any infractions. Ismail said professional institutions also have a role to play by consistently informing the public on approved fees.
A past Public Relations Officer of Estate, Rent & Commission Agents Association of Nigeria (ERCAAN), Mr Ademola Makanjuola, told The Guardian, “In ERCAAN, there is discipline among us. Most of the agents that increase all those charges are not our members. There are splinter associations that gather themselves, working as agents. The association has been working hard to stop the operations of the quack agents for over five years through advocacy and other programmes.”
Makanjuola said it has become difficult to stop quacks in estate agencies because they have a larger pool of members than those who belong to the registered associations. However, he said only the government can halt their operations, and advised all state governments to emulate Lagos State by setting up agencies like LASRERA.
“Although there is the existence of LASRERA in Lagos, many of the agents or operators don’t register with the agency. Ultimately, the public should stop patronising those that are not registered with the association or the government,’’ he added. (Guardian)
