Property Renters, Consumer Right Groups Fume Over Hike In Agency Fees

Property renters and consumer rights advocates are leading a call for the government to enforce stringent regulations on real estate agents who create hurdles for tenants to secure decent housing at fair price.

They equally called for stricter policy and legislative efforts to curb the mounting affordability crisis in rental and lease homes.

Residents and occupants in commercial cities of Lagos, Delta, Port Harcourt and Abuja have complained bitterly about arbitrary rent increases, excessive agency, service charge and legal fees that make securing accommodation increasingly difficult.

In Nigeria’s major cities, particularly Lagos, Abuja, and Port Harcourt, real estate agents act as intermediaries between landlords and prospective tenants. While their role is meant to facilitate transactions, many have turned it into an opportunity for exploitation.

More importantly, real estate agents have been found culpable of high extortion rates, dubious listings, high commission, legal fees, service charges,  amongst other sundry charges from prospective clients and tenants seeking apartments and decent housing.

In many instances, the unscrupulous agents work hand-in-hand with landlords to exploit tenants. Some go as far as collecting rent from multiple prospective tenants for the same apartment, leaving victims stranded when they realise they have been defrauded.”

The house agents broker the rent deal with the prospective tenants as the agent takes almost 20 to 30 per cent cuts on the newly rented apartment deal.

Speaking on this,  a real estate developer, Greenchell Homes and Properties, Taiwo Oke identified the activities of unscrupulous real estate agents and shylock landlords, noting that, the spike in commission charges and percentage cut on rent deals by estate agents was adding more complications to the housing deficit gap in the country.

Some real estate experts and property advocates are calling for stricter legislation of real estate agents and landlords stating that, ‘There should be a regulatory body ensuring that all real estate agents are licensed and held accountable for unethical practices.’

Property lawyer, Bunmi Adewale suggested that, “We need a standardised rent fee structure so that tenants are not at the mercy of arbitrary charges from estate agents.

“It is noteworthy that the high agency fees come with more than 100 per cent increase in the costs of rent across the country over the last two years, all being shoved in the throats of tenants, whose incomes have not changed substantially over the same period.”

However, estate agents have argued that their agency and commission fees are justified, given the work involved in finding suitable properties and managing transactions.

A realtor and developer, Ayo Olotu said: “People don’t see the effort we put in. We spend hours, sometimes days, searching for properties that match clients taste and needs. We also have to deal with landlords, negotiate terms, and handle paperwork. Our fees reflect the value we bring.”

A schoolteacher in Delta, Bridget Orie said, “I saw a two-bedroom flat for N1,000,000 in a good neighbourhood and called the agent immediately. He told me to meet him the next day for inspection. When I got there, he said that the apartment had just been taken but he had another one for N1.5 million. It was far worse and in a terrible location.”

Such deceitful tactics waste tenants’ time and money, forcing them into compromises they never planned for. In extreme cases, some agents even collect payments for non-existent properties and disappear.

Some estate agents, however, claim that they are not entirely to blame. “Sometimes, landlords give us a listing and then rent it out without informing us. We only find out when a tenant complains. And regarding inspection fees, they help filter out unserious clients. Many people just want to look around with no real intention of renting,”explained a real estate agent in Abuja. Hilary Okafor.

But in many instances, unscrupulous agents work hand-in-hand with landlords to exploit tenants. Some go as far as collecting rent from multiple prospective tenants for the same apartment, leaving victims stranded when they realise they have been defrauded.

Legal practitioner, Rotimi Opeifa said, “A colleague of mine paid for an apartment in Surulere, only to discover that three other people had also made payments for the same place. The agent vanished, and the landlord claimed he knew nothing about it. The case ended up in court, but my colleague never got his money back,”

Even when the fraud is less blatant, many landlords rely on agents to inflate rents beyond the market rate. Tenants are left with little choice but to pay, as housing demand continues to outstrip supply.

Some agents argued that landlords often dictate rental terms, leaving them with little room to negotiate. “We act as middlemen, but landlords call the shots,” Said Balogun. “If a landlord insists on collecting multiple years’ rent upfront, we have no power to change that. We can only advise tenants based on the market reality.”

The government has attempted to regulate the real estate sector, with Lagos State enacting the Tenancy Law of 2011, which prohibits excessive rent collection and mandates fair dealings.

However, enforcement remains weak. Real estate experts and consumer rights advocates are calling for stricter oversight of real estate agents and landlords.