Lagos has capped advance rent since 2011

If you collected two years' rent from a new tenant in Lekki last month, you committed an offence, and it has been one since 2011. Section 4 of the Lagos State Tenancy Law caps advance rent at one year for 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", when the cap has in fact been law for fifteen years. The tenancy bill now with a committee of the House of Assembly leaves the one-year limit for new tenants where it is, and the changes it would make are mostly not the ones in the headlines.

I found no reported prosecution under section 4 or section 5 since the Law began. What has changed is that since January, tenants can cut their income tax by claiming rent relief, and the receipt the Law has always required is the document they will ask you for.

First, check the address

None of this applies everywhere in Lagos, so establish the address before anything else.

Everywhere else in the state the Law applies in full, including Gbagada, Yaba, Surulere, Lekki, Ajah, Magodo and the parts of Ikeja outside the GRA. If your portfolio looks like most in Lagos, that covers every unit you manage.

The one-year limit, and who it catches

Section 4 makes four things unlawful, and two of them are things the tenant does. It draws its limits around two kinds of tenant. A sitting tenant is one already living in the premises under a tenancy that has begun. A new or prospective tenant is one taking the premises for the first time. So a tenant renewing for a fourth year in Gbagada is a sitting tenant, and if they pay yearly, their limit is one year, the same as a newcomer's. The six-month limit only applies to a tenant who pays month by month.

The words "or his agent" put you personally inside the section. If you collect eighteen months from an incoming tenant because your client told you to, the offence is yours as well as your client's, and the instruction is no defence. The section also catches the tenant who offers the extra money, so the familiar explanation that the tenant volunteered two years to win the flat helps neither of you.

Money you have already taken

The Law does not say what happens to excess rent you have already collected. Section 4 makes receiving it an offence, but it does not require a refund, it gives the tenant no civil claim to get the money back, and it does not make the tenancy void. The bill, which I come to below, is different on agency commission, where it expressly orders repayment of the sums collected. For advance rent, both in 2011 and today, there is only the offence.

That means the statute gives you no procedure for unwinding money already in your account, and anyone who tells you confidently what to do with it is either guessing or is your solicitor. In practice, I would stop taking the excess from the very next payment you collect, instead of waiting for each tenancy to come up for renewal. I would write to the client explaining why, and keep that correspondence, because a documented change of practice will count for far more than any argument about what you collected before.

The receipts you already owe

Section 5(1) requires the landlord to issue a receipt whenever rent is paid, and section 5(2) lists what it must show: 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 covers. A landlord who fails to issue one is liable on conviction to a fine of ₦100,000.

Section 10 is the rule managers most often 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 spent. The Law does not prescribe a format, so a dated statement for each block showing what came in and what was spent, and on what, is a reasonable way to meet the duty. If you currently fold service charge into the rent receipt and report on it once a year to the landlord but never to the tenant, you are not meeting section 10.

The duties in sections 5 and 10 sit on the landlord, whereas section 4 names the agent directly. In practice you carry out those duties for your client, so the receipt should name your client as landlord, name your firm as the agent issuing it, and carry all five details. If your management agreement does not give you that authority in writing, add it, because a conviction for a missing receipt would be your client's, and the difficult conversation afterwards would be yours.

Why tenants are about to start asking

The Nigeria Tax Act 2025 took effect on 1 January 2026. Section 30(2)(a)(vi) lets an individual deduct rent relief of 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. A tenant paying ₦1.5m can deduct ₦300,000, because twenty per cent of their rent is below the cap.

The relief is not automatic. The tenant has to claim it and show the rent they actually paid. The rules are in the Personal Income Tax Guidelines published on 24 February 2026 by the Joint Revenue Board, the body that coordinates the federal, state, FCT and local tax authorities. Two of those rules affect your receipts. Rent that covers months in two calendar years is split so that each part falls in the right tax year. And where several people share a tenancy, each claims only the share they personally bore, with a full ₦500,000 cap of their own.

A bank transfer alert shows money moving between two accounts, but it does not say which property the money was for or which months it covered. The section 5 receipt does, because the period and the premises are among the five details the Law has required since 2011. The relief starts with the 2026 tax year, so a tenant asking you to reconstruct receipts for 2024 has no tax reason to. Whether a payment made in 2025 for months that fall in 2026 counts is less clear, and I set out that open question, with what a receipt should now show, in the post on rent relief and the receipt tenants need.

Two situations are worth deciding in advance. Where a tenancy runs from March to March, write the exact period on the receipt in plain words and leave the split between tax years to the tenant, because the guidelines make that split the taxpayer's job. Where three sharers pay one lump sum from one account, name all three on the receipt with the total, and record each person's share only if they tell you how they divided it, since a split you invent is one nobody can support.

Agency fees: what the law says today

Agency commission is the part to treat most carefully, because the current position is muddier than most coverage admits. Section 11 of the 2011 Law says that whoever engages a 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 arrange, section 11 suggests the landlord should be paying it, and a tenant who reads the section has an argument.

The Tenancy Law sets no percentage for agency fees anywhere. The ten per cent ceiling Lagos officials often mention is in a different statute: section 32(2)(a) of the Lagos State Real Estate Regulatory Authority Law caps the fee on a letting at ten per cent of the rent collected, as I explain in the post on LASRERA registration and the fee cap.

The bill would go further. Its section 3(4) sets five per cent as a hard limit, and section 3(5) makes a breach punishable by repaying the sums collected plus up to two years' imprisonment, a ₦1,000,000 fine, or both. Until the bill commences, I would not rewrite an agency agreement around five per cent. Put section 11 in front of your solicitor first, because it is already law and it bears on whether the tenant should be paying the fee at all.

The permit you may already need

You probably also need to be registered to do this work at all. Governor Sanwo-Olu signed the Lagos State Real Estate Regulatory Authority Law, which created the regulator known as 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. Collecting rent and coordinating maintenance on someone else's property puts you inside that description.

Section 48(a) makes failing to register an offence, and on conviction the fine 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 section 31 requires you to apply to renew it no later than two weeks before it expires.

The Authority keeps a public register of registered practitioners. It is worth checking yourself on it, along with any co-agent you split a fee with and the letting agents you pay, because a certificate sent to you on WhatsApp looks the same whether or not the number on it is real. The regulator now has an enforcement record, too: on 18 March 2026 it sealed an agent's office in Owutu, Ikorodu, for trading on a fabricated certificate. Its website did not load when I tried it on 2 August 2026, so for now checking the register means visiting the Authority's office at Block 21, first floor, of the Secretariat in Alausa, where you should also ask for the current fee and document list instead of relying on figures from a blog.

What the bill would change

The Lagos State Tenancy and Recovery of Premises Bill 2025 is usually reported as introducing a rent cap. Set side by side with the 2011 Law, its changes are narrower than that.

The 2011 figures come from sections 4(3), 4(1), 4(5), 5 and 1(3).

The monthly limit would halve, which affects the minority of tenants who pay month to month, and the fine would rise tenfold. The biggest change is that the four exempt areas would come into scope, so a block in Ikoyi or on Victoria Island that has never been subject to any of these rules would be covered by all of them from the day the new Law commences.

Where the bill has got to

The House of Assembly passed the bill at second reading on 10 July 2025, which means it agreed to examine the bill in detail, 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 conflicted with their existing fee scales. More than a year after second reading, 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 or signature reported in June or July 2026.

Until then, the rules that bind you are the 2011 Law and the LASRERA Law. Outside the four exempt areas, start with the next payment you receive: collect no more than the section 4 limit, and issue a receipt carrying all five section 5 details.