What Fees and Deposits Can a Landlord Charge a Tenant in Nigeria?
For landlords, tenants and property managers. General information, not legal advice.
Direct answer: On top of the rent, a Nigerian tenant is commonly asked for an agency fee, a legal fee for the tenancy agreement and a caution fee. In Lagos, the Tenancy Law 2011 caps the agency fee and the legal fee at 10 percent of the annual rent each. A caution fee is meant as refundable security against damage and unpaid bills, and there is no single national rule on its size, so put its amount, purpose and refund terms in writing.
What a Tenant Usually Pays on Top of Rent
Moving in usually costs more than the first rent. Alongside the rent itself, which is often a full year, a tenant is commonly asked for an agency fee if an agent found the property, a legal fee if a lawyer prepared the tenancy agreement, and a caution fee held as security. Some properties add a service charge for shared costs such as security, waste and generator running. Each of these has a different purpose and a different rule, and they are easy to confuse. Mixing them up is how disputes start.
Agency Fee and Legal Fee
The agency fee pays the agent for finding the tenant or the property. The legal fee pays for preparing the tenancy agreement. In practice each is often quoted as 10 percent of the annual rent. In Lagos that figure is not just a habit: the Lagos State Tenancy Law 2011 limits both the agency fee and the legal fee to 10 percent of the annual rent each, and the Lagos State Government has publicly restated the cap. You can read the law on the Lagos State Ministry of Justice website. Outside Lagos the rule depends on the state, so check locally before you agree a number.
A useful habit for anyone who pays or charges these fees: ask for the amount in writing, ask what it covers, and get a receipt. A fee with no receipt is a fee you cannot later prove you paid.
The Caution Fee
A caution fee, sometimes called a security deposit, is money the landlord holds during the tenancy as security against damage to the property, unpaid bills or unpaid rent. It is generally understood to be refundable at the end of the tenancy, less any deduction for damage beyond normal wear and tear or money still owed. Amounts vary. It is often described as around one month of rent or roughly 5 to 10 percent of the annual rent, but there is no fixed national figure, and landlords set their own.
Be careful with anyone who says a caution fee is simply non-refundable. Written sources also differ on exactly how the Lagos Tenancy Law treats caution fees, so if a large amount is involved, ask a lawyer to read the wording of the agreement. What no one disputes is that the agreement should say clearly what the deposit is for, how much it is, what can be deducted and when it will be returned.
What Landlords Should Do
Put the deposit in the tenancy agreement, with its amount, its purpose, the kinds of deduction allowed and a refund timeline. A common benchmark when an agreement is silent is to refund within 14 to 30 days of the tenant handing back vacant possession and any utility bill being reconciled, but write your own number rather than relying on a benchmark.
Record the condition of the property at move-in, ideally with dated photos that the tenant has also seen. At move-out, compare against that record. If you deduct anything, give the tenant an itemised written list of each item and its cost, with receipts where you have them. Wear and tear from ordinary living, such as faded paint or a loosened hinge, is normally the landlord's cost, not the tenant's.
Keep the deposit separate from rent in your records. It is not rent income, and you may have to return it.
What Tenants Should Do
Get the caution fee amount and the refund terms in writing before you pay. Photograph the property on the day you move in, including any existing damage, and send the photos to the landlord so there is a dated record. Keep the receipt for every payment. At move-out, ask for a joint inspection and for any deduction to be itemised. If the refund does not arrive, follow up in writing and keep copies.
If the amounts you are asked for look far above what is normal or what the law allows in your state, ask for the breakdown in writing before paying and get advice.
Recording Deposits and Fees in Domby
Each tenant record in Domby has optional fields for the security deposit, the service charge and the agency or legal fee, so the amounts agreed at the start sit on the tenant record rather than in a chat. The tenancy agreement Domby generates includes a security deposit clause and lists the deposit in the Schedule when one is recorded. Rent payments are recorded separately from these figures, so your rent history stays clean. The tenant notes are a good place to write a short summary of the property condition at move-in.
What Domby does not do is hold the deposit or process the refund. That stays between you and the tenant, so keep your own receipt and photos.
FAQ
It is generally understood as refundable security, returned at the end of the tenancy less deductions for damage beyond normal wear and tear or money owed. The agreement should state the amount, what it covers and when it will be returned. If a large amount is involved, ask a lawyer to read the agreement.
The Lagos State Tenancy Law 2011 limits the agency fee and the legal fee to 10 percent of the annual rent each. Rules outside Lagos depend on the state, so check the law where the property is.
There is no fixed national figure. It is often described as around one month of rent or roughly 5 to 10 percent of the annual rent, and landlords set their own. Make sure the amount is written into the agreement.
Ordinary wear and tear, such as faded paint, is normally the landlord's cost. Deductions should be for damage beyond that, or for unpaid rent or bills, and they should be itemised in writing.
No. Domby records the security deposit amount on the tenant record and includes it in the generated agreement, but it does not hold or refund money. That stays between the landlord and the tenant.
Related guides
Related reading: how landlords create a tenancy agreement, how much notice a landlord must give in Nigeria, and how tenants keep track of their rent, and what service charge covers and who pays it. See also the free tenancy agreement template, whether caution fee and security deposit mean the same thing, a tenant's rights in Nigeria, and how landlords end a lease agreement, including how a deposit gets handled. Browse all landlord guides.
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