LAGOSIANS have called on the state House of Assembly to ban the activities of real estate agents to cut the cost of rents and living in Nigeria’s most populous state.

Investopedia, a leading online resource for financial edication, defines a real estate agent as “a licensed professional who arranges property transactions, connects buyers and sellers, and represents them in negotiations.” In Lagos, as in other parts of Nigeria, real estate agents – mainly unlicensed – influence the cost of rents as they collude with landlords to exploit residents.

“I was seeking a 2-bedroom flat at Oke-Afa in Lagos. When I saw one at N1 million, the real estate agent asked me to pay N500,000 for ‘agent and agreement,’ which I still do not know what it means till today. I had no option but to pay,” said a tenant, Mr Ugochukwu Nzeribe.

A resident of Iyana-Ipaja, Ms Bola Hamzat, narrated how house agents influenced her landlord to double her rent within two years. “I parked into my 1-room apartment two years ago at the cost of N300,000. The real estate agent collected N150,000 from me for the so-called ‘agent and agreement fee’ and also took another N50,000 as ‘lawyer’s fee.’ So, I paid a total of N500,000 for 1 room. Early this year, the agent came to me to tell me that the lawyer would call me. I was wondering why the lawyer was going to call me. In the end, it was the landlord who called to tell me that my rent had increased to N650,000. We Lagosians can no longer bear this mess,” he said.

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At the Ojo area of Lagos, a reident, Mr Chinedu Ogendi, said his three-bedroom rent jumped from N900,000 to N1.6 million – nearly 80 percent – in one year, no thanks to real estate agents.

“I used to pay N900,000 for a 3-bedroom flat. Suddenly, a popular house agent here told the landlord that he was a fool to be charging the amount for the flat. That is what he regularly does. One day, the landlord brought a letter to me, asking for a rent of N1.7 million. The letter said I can park out if I wasn’t interested in paying the new rent,” he lamented.

Lagosians say house rents have risen by 50 percent in some areas of Lagos and by over 100 percent in others. In Oke-Afa, Ejigbo and Ikotun area, the cost of renting a 2-bedroom flat has risen from N600,000 to N700,000 to N1 million to N1.5 million in one year. A 3-bedroom flat costs up to N1.5 million to N2 million to rent, from N900,000 to N1.2 million early last year.

In Oshodi, Cele, Gbagada and other parts of the Lagos Mainland, rents have risen by the same pace, depending on whether the house in question is new or old.

Many Lagosians say that despite the high of rents, the conditions in some of the houses are not conducive for living. In many of the houses, water and other basic necessities are hardly available.

“The reality for a graduate in a mid-level job in Lekki or Ikeja means finding a one-bedroom apartment for anywhere between N950,000 to N1.5 million annually. Even then, the conditions are often manageable, with little access to basic amenities like consistent water supply, proper sanitation, or reliable electricity,” an expert in Entrepreneurship and Business Management, Dr Timi Olubiyi, wrote for Business Post on September 5.

Poor regulations

The Lagos State Government banned individuals from working in real estate—such as agents, brokers, or property consultants—unless they are properly registered with the state’s real estate regulatory authority.

The Lagos State Real Estate Regulatory Authority (LASRERA) says that all property service providers, letting/sales real estate practitioners in Lagos that applied for registration “must adhere to the high standards of ethical behaviour as outlined in the Lagos State Practice Guidelines of professional ethics for accredited Estate Agents and Developers.”

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“The aim of registration is to ensure that all Real Estate Property Service Providers in Lagos State are fit and proper to be Real Estate Practitioners. This registration will help the state Government improve the Real Estate Environment, sanitize the market, protect landlords and tenants and generally sanitize the Profession.”

Why exploitation thrives

House agents are exploiting the rapid growth of Lagos population. Lagos population is estimated at over 20 million, and the state has over 2 million housing deficit, which could reach 3 million by end of the year. African Investor says “properties near schools are in high demand, leading to rental prices up to 20% higher than other areas.”

Residential properties in Lagos typically appreciate by 4 percent-6 percent annually, it said, with over 40 percent of residential properties in Ikoyi, Lekki and Victoria Island owned by investors.

The Lagos Housing Market platform says the demand drivers are high urbanisation, economic opportunities, and diaspora investments.

Call for ban

Lagosians say thousands of house agents in the state are neither registered nor monitored, noting that the government has failed in its regulatory duties in the real estate sector.

“The government should tell itself the truth: Real estate agents have taken over the industry and the state – to the detriment of Lagosians. They charge whatever they want even when many of them own no houses. The House of Assembly must summon the courage to outlaw house agents in the state if it is serious with reducing the cost of rents and the cost of living, which have been rising fast in the last 3 years to 4 years,” said Mr Ogendi, quoted earlier.

A lawyer, Mr Ajagba Omale, agreed that the state legislature should ban house agents but was particular about illegal house agents. He said real estate agents have begun playing the role of legal practitioners in Nigeria’s most populous state, urging the government to limit their powers.

“The government should immediately arrest and prosecute unlicensed house agents because the law already outlaws their activities. Those whose job is solely to loiter the streets in search of vacant houses and offices should have no place here,” he said, but was coy on whether all house agents should be banned in the state.

A resident of Itire area of Lagos, Mr Segun Ademola, said: “We can’t continue to tolerate the house agents in the state. Lagosians are tired of them because they are the main reason why landlords increase rents every two years. They influence the landlords to increase the rents so that they can bring in new tenants when old tenants can’t pay the new rents. So, I am of the opinion that the state House of Assembly should ban them. Lagos State government should ban them,” he noted.

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While there is a law banning the activities of illegal house agents, real estate agents exist all over the world. However, the difference is that their activities are regulated through licensing.

“There are those who operate informally. Most of them are the reasons why the call for ban is rising in Lagos. But in the UK,you have many real estate agents who operate as companies, not individuals. They meet certain specifications annually and advertise online. So, I do not want them banned because it provides employment for several Lagosians. I only think that the Lagos State government should begin to do its job of regulating them and watching what they do,” a Lagos-based economist, Ms Cynthia Okonkwo, said.