Monday, May 9, 2011

Rent: Controversy trails Lagos ‘directive’ on agency fee


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. 

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.
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.
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