By ESV Babatunde Folarin Abiodun MNIVS RSV
The Lagos State Tenancy and Recovery of Premises Bill 2025 which aimed to create a more balanced and equitable rental market, with several key effects on property owners is a new initiative that should be applauded.
While the bill is designed to protect tenants from exploitation, it also seeks to protect landlords’ rights, streamline rental processes, and attract more investment into the housing sector. What a balanced Act.
A primary effect of the bill is first the regulation of advance rent payments. The Bill limits advance rent.
The bill also sets a clear limit on the amount of advance rent a landlord can legally demand.
By capping the upfront payment, the Bill will prevent exploitation. The bill is intended to ease the financial burden on tenants and prevent landlords and agents from exploiting the high demand for housing.
The Bill place a restrictions on agency fees. For landlords who use estate agents, the new bill will affect the fees they can charge.
The bill reportedly seeks to cut estate agent commissions from the traditional 10% of the annual rent to 5%.
This bill invariably reduce fees.
Tenancy and Recovery of Premises Bill 2025 will bring about fairer transactions. This change promotes fairness in property transactions and reduces the overall cost for tenants, but it may affect the income of real estate agents.
The bill provides a clearer framework for how and when landlords can increase rent, preventing arbitrary and excessive hikes.
Landlords are restricted from increasing rent too frequently. This Act will normalise frequency of increases.
By this Tenancy and Recovery of Premises Bill 2025, Landlords are required to give tenants proper, written notice before any rent increase.
The Bill will addressing market realities. The law aims to manage the housing crisis exacerbated by high and unregulated rent increases.
Protection against illegal evictions will be entrenched as the bill reinforces the legal process for evicting tenants, discouraging landlords from resorting to illegal and forceful self-help methods.
With the Tenancy and Recovery of Premises Bill 2025, mandatory court processes is required.
Landlords must follow established court procedures and serve proper notice to evict a tenant.
The law makes it a punishable offense for a landlord to use forceful or illegal means to eject or harass a tenant.
This formalization of the eviction process protects both tenants and landlords by ensuring due process and reducing conflicts and thus promotes harmony.
Another major effect of the Bill is that it will Improve dispute resolution. The legislation is expected to create a more efficient and transparent process for resolving disputes between landlords and tenants.
Balancing interests: By establishing clear guidelines, the bill minimizes the chances of misinterpretation and promotes fair settlements.
Fair access to justice: The bill seeks to prevent the abuse of the court system and may introduce new rules for appealing court decisions.
The overall implications is that the bill’s impact on property owners is a mix of both increased regulation and enhanced clarity.
It is a potential for reduced income for some landlords, particularly those who rely on high advance rent payments or frequent, significant increases, this may see a shift in their rental income stream due to the new regulations.
Increased investor confidence: By creating a more stable and predictable legal environment, the bill aims to attract more investment in the real estate sector, which will in turn increase investor confidence. The government believes this transparency will encourage large-scale housing projects.
A fair and enforceable rental system can improve public perception of the real estate sector and foster more harmonious landlord-tenant relations, which will also restore public trust.
With this Act, landlords will be required to be fully compliant with the new rules on tenancy agreements, rent payments, and eviction procedures to avoid legal penalties.
In summary, the Lagos State Tenancy and Recovery of Premises Bill 2025 is aimed at creating a more balanced and equitable rental market in Nigeria. The bill seeks to protect tenants from exploitation while also safeguarding the rights of landlords, streamlining rental processes, and attracting more investment into the housing sector. Some of the key effects of the bill include limitations on advance rent payments, restrictions on agency fees, regulation of rent increases, protection against illegal evictions, and improvements in dispute resolution.
The bill sets a clear limit on the amount of advance rent a landlord can legally demand, prevents exploitation of tenants by capping upfront payments, reduces estate agent commissions, provides a clearer framework for rent increases to prevent arbitrary hikes, reinforces legal processes for evicting tenants to avoid illegal methods, and creates a more efficient dispute resolution system.
While these changes may potentially reduce income for some landlords, particularly those reliant on high advance rent payments or frequent rent increases, they are expected to increase investor confidence in the real estate sector, restore public trust, and promote more harmonious relationships between landlords and tenants. Landlords will need to comply with the new rules to avoid legal penalties and adapt to the increased regulation and clarity introduced by the bill.