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Landlords and property management companies in the Federal Capital Territory (FCT) could face financial penalties of up to N20m if a proposed legislation regulating rental transactions becomes law.
The bill, which has secured passage at second reading in the House of Representatives, seeks to stop landlords from making payment of more than one year’s rent a compulsory condition for renting or renewing properties.
Under its proposed provisions, individual offenders could pay between N500,000 and N5m in fines, while corporate organisations found guilty of violating the law could be fined between N5m and N20m.
The legislation, sponsored by Paul Nnamchi, representing Enugu East/Isi-Uzo Federal Constituency, is also designed to address excessive agency charges, unlawful eviction and other practices considered exploitative in the FCT property market.
Lawmakers debated the proposal during Wednesday’s plenary, with members expressing different opinions about the extent to which the government should regulate agreements between landlords and tenants.
Presenting the bill, Nnamchi argued that the existing rental system had made securing accommodation increasingly difficult for many residents, particularly those unable to afford several years’ rent upfront.
He said the proposed framework would introduce clearer rules for property transactions, improve accountability among estate agents and ensure that tenants were not subjected to unreasonable demands.
Nnamchi maintained that regulating the sector would not prevent property owners from making profits or discourage investment in real estate.
“Mr Speaker, this legislation is not intended to undermine property rights or discourage investment. Rather, it recognises that legitimate commercial interests must coexist with public protection. Landlords deserve reasonable returns.
“Agents deserve professional recognition. And tenants deserve fairness and protection from exploitation,” he said.
He added that the ability to secure decent housing should not be tied to an individual’s capacity to make unusually large advance payments.
The proposal received support from several lawmakers, including Chinedu Ogah, who represents Ikwo/Ezza South Federal Constituency of Ebonyi State.
Ogah drew attention to the financial demands placed on businesses seeking office accommodation in Abuja. He said renting a three-bedroom office in Wuse could cost between N25m and N30m yearly, with additional agency charges.
He argued that introducing regulations would make rental transactions more predictable and create a better environment for businesses.
Ayodeji Alao-Akala, representing Ogbomoso North/South/Orire Federal Constituency of Oyo State, also backed the proposal.
He highlighted the difficulties young people encounter when landlords insist on two years’ rent before handing over accommodation.
According to him, the proposed framework should allow different payment arrangements while removing the pressure on tenants to make compulsory multiple-year payments.
However, the legislation faced objections from some members who questioned whether restricting rental agreements could interfere with landlords’ constitutional rights and freedom to conduct business.
Ibe Osonwa, representing Arochukwu/Ohafia Federal Constituency of Abia State, said the House should avoid imposing a blanket ban on multiple-year rental agreements, arguing that certain transactions could legitimately involve longer payment periods.
Patrick Umoh of Akwa Ibom State also expressed constitutional reservations and recommended further consultations before the bill progressed.
Other lawmakers, including Joseph Bagudu and Jafaru Gambo, proposed that the legislation should focus on regulating rather than prohibiting multiple-year rent arrangements. Gambo additionally argued that its coverage should extend beyond the FCT.
Responding to the concerns, Deputy Speaker Benjamin Kalu said the proposed legislation was consistent with the Constitution, pointing to provisions relating to public welfare and access to adequate housing.
Minority Leader Frederick Agbedi supported the bill, arguing that rising accommodation costs had pushed many Abuja residents into overcrowded communities outside the city centre.
House Leader Julius Ihonvbere also endorsed the proposal, particularly its attempt to address the activities of unregistered estate agents and improve the process of securing accommodation.
He said the legislation would be subjected to a public hearing to allow relevant professionals and other stakeholders to examine its provisions.
Key provisions of the proposed legislation
The proposed law, co-sponsored by Ahmed Yusuf Doro, would establish the Federal Capital Territory Rent Regulation and Tenants’ Protection Authority to supervise rental transactions and handle complaints involving landlords, agents and tenants.
It would also make it illegal for landlords, property managers or their representatives to demand more than 12 months’ rent upfront as a compulsory condition for securing or renewing a tenancy.
Tenants would, however, retain the option of paying for longer periods voluntarily, provided the agreement was documented and the landlord did not impose it.
The proposed authority would investigate complaints, facilitate the resolution of tenancy disputes and ensure compliance with the regulations.
The legislation also seeks to prevent landlords from using additional compulsory charges or separate agreements to evade the advance-rent restriction.
If passed into law, it would cover both residential and commercial properties in the FCT, with the proposed regulatory authority expected to commence operations within six months.
The proposed penalties and other provisions are not yet enforceable, as the bill must complete the remaining legislative stages before it can become law.
