A house in Lagos
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The controversy trailing the report that the Lagos State Government had directed that the collection of agency and agreement fees from prospective tenants by estate agents deepened on Friday.
While the state's Attorney-General and Commissioner for Justice, Mr. Supo Shasore, who was widely reported to have given the directive by the media last week, denied ever saying so, different bodies representing agents and legal practitioners said that such a directive would be difficult to implement.
Shasore had been quoted by many media outfits as describing as criminal, the practice by agents who demanded for agency and agreement fees from prospective tenants before offering them accommodation as there was no law in the state that supported such.
He reportedly said this during his ministry's press briefing to commemorate the fourth year anniversary of Governor Babatunde Fashola administration, where he also said that a new law in the works had forbidden the collection of rents for more than six months in advance.
The commissioner, who acknowledged that though the demand for accommodation had outstripped supply, was also quoted as saying that there was no justification for any estate agent or landlord to charge agency or agreement fees from tenants before being allowed to move into any rented apartment.
He said that the state's Tenancy Bill, which aims at regulating the activities of estate agents, was at its third reading in the state House of Assembly. He expressed the hope that it would be passed into law before the expiration of the tenure of the present legislature.
However, those who engage in estate agency have taken up issues with the commissioner, and indeed the state government, for the directive, saying it was not carefully thought out.
But when contacted through his mobile telephone line, Shasore denied ever saying that the collection of agency fees by estate agents was illegal and criminal, adding that there was no law to base such a directive on.
He, however, confirmed that the Tenancy Bill made provision for landlords to only collect six months' advance rent, instead of the current practice of collecting rents of, at least, two years in advance.
While reacting to the purported directive, the President, Nigerian Institution of Estate Surveyors and Valuers, Mr. Bode Adediji, told our correspondent on the telephone that the body was studying the situation and would react appropriately after its council meeting scheduled for the weekend in Abuja.
The Chairman, Lagos State Branch, NIESV, Mr. Elias Ovesuor, told our correspondent that the directive was not acceptable to the body and that a committee had been mandated to liaise with the state House of Assembly over the matter.
A Lagos-based property lawyer, Mr. Kazeem Bello, said that the government could not effectively regulate a market in which it was not a big player, adding that the general law of agency stipulated that the agent must get a fee for his efforts from his principal, who required his services.
He said, "If a tenant asks an agent to get an apartment for him, the tenant is the principal. The landlord will pay the letting agent. I can't claim a fee from a landlord who has not given me an instruction."
The Patron, Institute of Estate Agents of Nigeria, Chief Olu Shonoiki, who runs an estate agency firm, Olu Shonoiki & Co, said that the government was only playing to the gallery since it was generally accepted in the British system that Nigeria copied that the agent must get his fee from the source of instruction.
According to him, if implemented, the directive will make it more difficult for prospective tenants to secure accommodation in the state.
All the respondents also faulted the provision for payment of six months' rent in advance as contained in the Tenancy Bill, saying how much would be paid and for how long were a function of demand for and supply of accommodation.
Despite Shasore's denial, the governor had in 2009 given an insight into his administration's thought on the issue of agency fee when he requested to know the criteria for its determination from the NIESV President, who visited him with members of his council.
"You need to help us to let us know the basis of these charges," Fashola had said in response to a request by Adediji for support to enforce the Estate Agent Enactment, which seeks to stamp out quacks parading themselves as estate agents.
The governor had said then, "The charges are not regular. They range from five to 20 per cent and these charges put housing beyond the reach of the poor."
Fashola also condemned the high advance rent being demanded by some property owners and advised the members of the institution to embrace lower charges and the collection of six months' rent, or at mos,t one year's rent, as a social service to complement government's effort in creating a dynamic economy.
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