In a tenancy transaction, the party who retains the professional must pay that professional. However, a common practice in Lagos’s rental market is that tenants are made bear the cost of the lawyer, agent, or other professional retained by the landlord/landlady as part of the tenancy transaction. But does this practice actually have legal backing?
Section 11 of the Tenancy Law of Lagos State, 2011, provides that “from the commencement of a tenancy it shall be the duty of the party who engages the services of a professional in respect of the tenancy agreement to pay the fees for such professional services.”
This provision, which is in force across Lagos except in Apapa, Ikeja GRA, Ikoyi and Victoria Island, explicitly establishes that obligation to pay follows engagement. If a landlord/landlady instructs the lawyer or agent, then the landlord/landlady has the obligation to pay legal and agency fees. If a tenant independently retains those services, the tenant pays.
As such, a landlord/landlady cannot engage a lawyer to prepare the tenancy agreement and simply invoice the tenant for the legal fees. Similarly, a tenant cannot retain a lawyer and demand that the landlord/landlady pay.
Effectively, Section 11 dismantles the industry default where the landlord or landlady automatically pass legal and agency fees onto the tenant, regardless of who instructed the professional.
The law does not prohibit parties from agreeing to shift cost obligations. Neither does it prohibit parties who jointly engage the professional, to agree on how the fees are shared. Rather, the law fixes the primary legal obligation to pay the professional on the person who engaged the professional, absent any separate contractual arrangement.
Ultimately, understanding this provision empowers both landlord and landladies and prospective tenants to negotiate fairly and transparently. While market customs can be deeply ingrained, they do not override the law.
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Note that the Tenancy Law of Lagos State is not applicable in Apapa, Ikeja GRA, Ikoyi and Victoria Island, however parties to the tenancy transaction may agree to adopt its provisions in the tenancy agreement.