Lagos State government has initiated moves to regulate estate agency fees in the state which it claims ranks highest when compared with other countries.
To this end, a stakeholders’ meeting was recently convened at the instance of the Lagos State Real Estate Transaction Department (LASRETRAD) to deliberate on “Real Estate Agency Fees in Lagos”. In attendance were various associations of estate agents, legal practitioners and developers, among others, operating in the state.
Issues discussed at the meeting included acceptable rates to be collected as agency commissions, the models to be adopted, based on best practices obtainable in other countries.
The State’s Attorney-General and Commissioner for Justice, Ade Ipaiye, in a paper titled: ‘Agency Fees and its Related Issues’, noted that agency fee is a contractual agreement which is subject to negotiation. Ipaiye who was represented by the Senior Special Adviser to the governor on Justice, Olanrewaju Akinsola, drew a comparison between Nigeria and other countries, noted that agency fees in Nigeria are the highest.
According to him, agency fee in Ghana is five percent; in Kenya it is 1.25 percent and in South Africa, it ranges from four to eight percent. He further noted that agency fees in these countries are either paid by property owners or shared by owners and buyers/tenants whereas in Nigeria, estate agency fees range from 10 percent to as high as 75 percent.
Also speaking at the event, Special Adviser to the Governor on Housing, Jimoh Ajao, said the state government is worried on the number of negative complaints received from the public on the activities of estate agents in the state.
“Government has realised that estate agents are charging varying percentages as agency fees, some as ridiculous as 75 percent of rent for low-end properties,” he noted.
According to him, the appropriate fees to be paid must be known; the true condition of the property must be disclosed, according to article 3 (1-5) and 5 (1-3) of the primary duty to clients in the Code of Conduct of an estate agent.
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