Lagos capped advance rent in 2011, not in the new bill

If you collected two years' rent from a new tenant in Lekki last month, that was already an offence, and it has been one since 2011. Section 4 of the Lagos State Tenancy Law caps advance rent at one year from a new tenant, names the agent alongside the landlord, and carries a fine of ₦100,000 or three months' imprisonment.

Managers have spent the past year adjusting renewals because someone told them a rent cap "has passed". A cap did pass, in 2011. The bill now sitting in a committee of the House of Assembly leaves the one-year limit on new tenants exactly where it is, and most of what it would change is not the thing the headlines are about.

First, check the address

None of this applies uniformly across Lagos, so the address is the first thing to establish rather than the last.

Everywhere else in the state the Law applies in full, which covers Gbagada, Yaba, Surulere, Lekki, Ajah, Magodo and the parts of Ikeja outside the GRA. If your book looks like most managed residential books in Lagos, that is all of it.

What section 4 has said since 2011

The Law does not frame the cap as a restriction on landlords alone. It makes four things unlawful, and two of them are things the tenant does.

A sitting tenant, for these purposes, is one already in occupation under a tenancy that has begun. A new or prospective tenant is one taking the premises for the first time. Somebody renewing for a fourth year in Gbagada is a sitting tenant, and if they pay yearly, the ceiling for them is one year, the same as for a newcomer. The six-month figure only ever applies to a tenant who pays month by month.

Two things follow. The words "or his agent" put you personally inside the section, so if you collect eighteen months from an incoming tenant because your client instructed you to, the offence is yours as well as theirs and your instructions are not a defence. And because s.4(2) and s.4(4) catch the tenant who offers the money, the familiar answer that the tenant volunteered two years to win the flat does not help either party.

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.

Lagos State Tenancy Law 2011, s.4(2)

What about money you have already taken

This is the question the section raises and the Law does not answer. Section 4 makes receiving the excess an offence, but it does not say the excess must be refunded, it creates no civil claim for the tenant to recover it, and it does not make the tenancy itself void. Compare that with the bill, which for agency commission expressly orders repayment of the sums collected. For advance rent, in 2011 and today, there is only the offence.

So there is no procedure in the statute for unwinding what is sitting in your account, and anyone who tells you confidently what to do with it is guessing or is your solicitor. What I would do operationally is stop at the next collection rather than the next renewal, write to the client explaining why, and keep the correspondence, because a documented change of practice is worth considerably more than an argument about what you did in 2024.

What the bill would actually change

The Lagos State Tenancy and Recovery of Premises Bill 2025 is usually reported as introducing a rent cap. Set it against the Law it would replace and it does something narrower.

The 2011 figures are sections 4(3), 4(1), 4(5), 5 and 1(3) respectively.

Three real changes, then. The monthly cap halves, which affects the minority of tenants who pay month to month. The fine multiplies tenfold. And the four exempt areas come into scope, which is the largest of the three, because a block in Ikoyi or Victoria Island that has never been subject to any of this would be inside all of it from the day the Law commenced.

Agency commission is the part I would treat most carefully, because the current position is muddier than the coverage admits. The 2011 Law fixes no percentage anywhere. What it does say, at section 11, is that the party who engages the professional pays that professional's fees, so if you charge an incoming tenant an agency fee for a letting your landlord client instructed you to carry out, section 11 points the other way and a tenant who reads it has an argument. Lagos officials have pressed a ten per cent ceiling publicly for years without my being able to locate it in the Tenancy Law, and section 3(4) of the bill would set five per cent as a hard limit, with section 3(5) making a breach punishable by repaying the sums collected plus up to two years' imprisonment or a ₦1,000,000 fine or both. Until something commences, I would not rewrite an agency agreement around either percentage, and section 11 is the provision to put in front of your solicitor first.

Where the bill actually is

The Assembly announced the second reading, meaning the House had agreed to examine the bill in detail, on 10 July 2025, and sent it to the Committee on Housing with three weeks to report back. The committee held a public hearing on 13 August 2025, where professional bodies objected that a five per cent commission ceiling was inconsistent with their existing fee scales. Thirteen months on, no committee report has appeared. The most recent confirmed position came on 27 May 2026, when the Commissioner for Housing, Moruf Akinderu-Fatai, told the annual ministerial press briefing in Alausa that the bill was still at committee stage, and I found no vote and no signature reported through June and July 2026.

The receipts you already owe

Section 5(1) obliges the landlord to issue a receipt when rent is paid, and section 5(2) states what it must carry: the date the rent was received, the names and addresses of the landlord and the tenant, a description and location of the premises, the amount paid, and the period the payment relates to. Failing to issue it leaves the landlord liable on conviction to a fine of ₦100,000.

Section 10 is the one managers miss. Where you collect a security deposit, a payment for services and facilities, or a service charge on flats that retain common parts, you must issue a separate receipt for that money, and the tenant is entitled to a written account, at least every six months, of how it was disbursed. The Law does not prescribe a format for that account, so a dated statement per block listing what came in, what went out and on what, is a reasonable reading of the duty. If you currently fold service charge into the rent receipt and report on it annually to the landlord but never to the tenant, section 10 is not being met.

The duty in sections 5 and 10 sits on the landlord rather than on you, which is the opposite of section 4 where the agent is named. In practice you discharge it for your client, so the receipt should name your client as landlord, name you as the agent issuing it, and carry the five details. Get that authority written into your management agreement if it is not there, since the conviction would be your client's and the conversation afterwards would be yours.

Why tenants are about to start asking

The Nigeria Tax Act 2025 took effect on 1 January 2026, and section 30(2)(a)(vi) lets an individual deduct rent relief worth twenty per cent of the annual rent they paid, capped at ₦500,000, when working out the income they pay tax on. A tenant paying ₦2.5m a year sits exactly on the cap, since twenty per cent of ₦2.5m is ₦500,000, and takes the full amount. A tenant paying ₦1.5m takes ₦300,000, because the twenty per cent figure is the lower of the two.

The relief is not automatic. The tenant must claim it and evidence the rent actually paid, and the Joint Revenue Board, which coordinates the federal, state, FCT and local tax authorities, published Personal Income Tax Guidelines on 24 February 2026 setting out how. Rent is apportioned across calendar years so that it falls in the correct year of assessment, meaning the tax year the claim is made against. Where several people share a tenancy, each claims only the share they personally bore, although each keeps a full ₦500,000 ceiling of their own.

A bank transfer alert evidences none of that, because it records money moving between two accounts and says nothing about which property it was for or which months it covered. The document that does the job is the section 5 receipt, carrying the same five details the Law has demanded since 2011. Since the relief runs from the 2026 year of assessment, the receipts that matter are for rent paid from January 2026 onwards, so a tenant asking you to reconstruct 2024 has no tax reason to.

Two situations worth deciding in advance. Where a tenancy runs March to March, write the exact period on the receipt in plain words and leave the split across tax years to the tenant, because apportionment is the taxpayer's job under the guidelines. Where three sharers pay one lump from one account, issue a single receipt naming all three and stating the total, and let them agree between themselves who bore what, since a split you invent is one you cannot evidence.

The permit you may already need

Separately from all of the above, you probably need a licence to do this work at all. Governor Sanwo-Olu signed the Lagos State Real Estate Regulatory Authority Law, which created the regulator everyone calls LASRERA, on 7 February 2022. Section 27 requires anyone dealing in real estate as a property developer, a facility manager or a property management company to register with the Authority, whether they trade as an individual or through a company, and collecting rent and coordinating maintenance on somebody else's property puts you inside that description. The fine for operating without a permit is not less than ₦250,000 for an individual and not less than ₦1,000,000 for an organisation. A permit lasts a year and should be renewed no later than two weeks before it expires.

The Authority maintains a public register of licensed practitioners, which is the check worth doing on yourself, on any co-agent you split a fee with, and on the letting agents you pay, since the certificate somebody sends you on WhatsApp photographs equally well whether or not the number behind it exists. The Authority sealed an agent's office in Owutu, Ikorodu on 18 March 2026 for trading on a fabricated one. Its website did not resolve when I tried it on 2 August 2026, so for the moment the register means the Authority's office at Block 21, first floor, of the Secretariat in Alausa rather than a browser tab, and you should ask there what the current fee and document list are rather than trusting a figure from a blog.

Nobody has been prosecuted under section 4 or section 5 in fifteen years, and that is the honest position rather than a scare. What has changed is that the regulator now has an enforcement record, the tax code has given your tenants a reason to want the paperwork, and the bill in committee would multiply the fine by ten while bringing the wealthiest four areas of Lagos into scope for the first time. None of that is a reason to panic about 2024. It is a reason to fix the practice now, while fixing it is still free.