Direct answer
Agency fees in Nigeria are set by market convention rather than by statute, which is why every agent you ask quotes something slightly different. The bigger problem is not the rate. It is that plenty of agents agree a rate, do the work, and then spend months chasing the landlord for money they have already earned. That is a paperwork failure, and it is fixable.
What agents charge in practice
The figures below are what you will typically see quoted in Lagos and Abuja for residential lettings. They are conventions, not law, and they move with the city, the property class, and how much competition there is for the mandate. Prime commercial space works differently again.
Two things worth flagging. The legal or agreement fee is a separate charge from the agency fee and is often collected by the same agent, which is where a lot of landlord confusion comes from. And the management fee is the only one of these that recurs, which makes it the one worth building a business on.
| Charge | Typical rate | Paid by | How often |
|---|---|---|---|
| Agency fee | 10% of first year rent | Tenant, sometimes landlord | Once per new letting |
| Legal or agreement fee | 5% to 10% of annual rent | Tenant | Once per letting |
| Caution or security deposit | Varies, often one month or more | Tenant | Once, refundable |
| Management fee | 5% to 10% of rent collected | Landlord | Ongoing |
| Renewal commission | Around 5% of annual rent | Landlord or tenant | Each renewal |
Agency fee and management fee are not the same thing
An agency fee is earned once, for finding a tenant and closing the letting. A management fee is earned continuously, for running the property afterwards: collecting rent, handling repairs, chasing arrears, and reporting to the landlord.
Landlords conflate the two constantly. An agent takes 10% on the letting, then asks for a management fee, and the landlord asks what the first 10% was for. If your mandate does not spell out that these are separate services with separate fees, you will have that argument on every property. This matters enough that we wrote a separate piece on it for the lawyers who draft these agreements.
Where commission quietly goes missing
Almost none of the commission Nigerian agents lose is lost to outright refusal. It goes missing in the gaps between how rent is collected and how anyone keeps records.
The most common version: the tenant pays the landlord directly, because that is what the landlord asked for, and the agent finds out weeks later. Now the agent is invoicing a landlord who already has the money and is in no rush. Do that across fifteen properties and you have a collections problem inside your own business.
- Rent paid straight to the landlord, leaving you to invoice after the fact
- No written mandate, so the rate is whatever the landlord remembers agreeing
- Commission calculated on the wrong base, usually net instead of gross
- Nobody recorded which payments already had commission taken
- Renewals collected with no fee because the mandate never mentioned renewals
- The landlord sells the property and the mandate says nothing about what happens next
Get the mandate right before you collect anything
The management agreement is the whole game. It should be boring, specific, and signed before the first naira moves. Most disputes we hear about trace back to a mandate that was either verbal or so vague it settled nothing.
Be explicit about the base the commission is calculated on. Ten per cent of rent collected and ten per cent of rent due are different numbers the moment a tenant falls behind, and you do not want to discover that difference during an argument.
- The rate, in figures, and exactly what it is a percentage of
- Whether commission comes off rent collected or rent due
- That you deduct at the point of collection rather than invoicing later
- What happens at renewal, and at what rate
- Who bears the cost of repairs, and what you can authorise without asking
- Notice period to end the mandate, and what happens to rent already collected
- What happens if the landlord sells or decides to self-manage
Deduct at collection, do not invoice afterwards
This is the single change that fixes most agency cashflow. If rent arrives in an account you control, commission comes off before you remit, and the landlord receives the net with a statement showing exactly how you got there. No invoice, no chasing, no awkward call.
If rent goes straight to the landlord, you are a creditor of your own client, and you will be paid whenever they get round to it. Some landlords will insist on direct payment, and for a large enough portfolio you may have to accept that. In that case get the deduction and remittance terms in the mandate in writing, and reconcile monthly rather than at year end when nobody remembers anything.
What the landlord should see
Landlords argue about commission when they cannot see the workings. Show the arithmetic and the argument mostly disappears. A statement that runs from gross rent collected, through commission at the agreed rate, through any expenses, to the net remitted, is the difference between a client who trusts you and one who questions every transfer.
Send it on a fixed cycle rather than when asked. An agent who reports without being chased is an agent who keeps mandates, and keeping mandates is worth more than winning any single fee argument.
- Gross rent collected in the period, per property and per tenant
- Commission taken, with the rate shown
- Expenses, with what they were for
- Net remitted, and the date it went out
- Arrears outstanding, so the landlord sees the same picture you do
How Ledge tracks commission
Ledge holds a commission rate against each property, each landlord, or the whole agency, and works out which one applies. A property with its own rate uses that. Where the property has none, it falls back to the landlord's default, and then to your agency-wide rate. You set the exception once instead of remembering it every month.
Commission is worked out and recorded against each payment at the moment it is marked paid, at whatever rate applied then. So if you change your standard rate next year, last year's payments keep the figures they were actually collected under, which is what you need if a landlord ever queries an old statement.
Owner statements then come out of the same record: gross collected, commission, expenses, net remitted, per landlord. Owner accounts and management fees are part of the Agency plan rather than the free tier, so it is worth looking at the pricing before you plan around it.
- Commission rate per property, per landlord, or agency-wide, resolved in that order
- Rate recorded against each payment as it is collected, not applied retrospectively
- Owner statements showing gross, commission, expenses, and net
- Arrears visible per tenant so you know what has not been collected yet
- One record behind the statement, the reminder, and the rent ledger
Frequently asked questions
What is the standard estate agent commission in Nigeria?
Around 10% of the first year rent as an agency fee on a new letting, with a separate legal or agreement fee of roughly 5% to 10%. Ongoing management is usually 5% to 10% of rent collected. These are market conventions rather than statutory rates and vary by city and property class.
Who pays the agency fee in Nigeria, the landlord or the tenant?
On most residential lettings the tenant pays the agency and legal fees, and the landlord pays the ongoing management fee. It is not universal, so put it in writing before the tenant is introduced.
Can I charge commission on a renewal?
Yes, if the mandate says so. Renewal commission is commonly around 5%, lower than the fee on a new letting because there is no tenant to source. If the mandate is silent on renewals, expect an argument.
Should commission be taken on rent collected or rent due?
Rent collected is the fairer and more common basis, and it keeps your interests aligned with the landlord's. Whichever you use, name it explicitly in the mandate, because the two figures diverge the moment a tenant falls into arrears.
What do I do if a landlord refuses to pay commission I have earned?
Go back to the mandate and the record: what was agreed, what was collected, and when. This is why deducting at the point of collection beats invoicing afterwards. If rent has always gone straight to the landlord, you have no leverage beyond the paperwork, so the paperwork has to be good.
Next step
Stop chasing commission you have already earned
Ledge records your commission against every payment as it is collected and produces the landlord statement showing gross, commission, expenses, and net. No month-end reconstruction.