Bill to cap FCT rent at 12 months passes second reading

The House of Representatives has passed for second reading a bill seeking to regulate rental payments in the Federal Capital Territory, prohibit compulsory multi-year rent demands and curb exploitative practices by landlords and estate agents.

The proposed legislation, sponsored by the member representing Enugu East/Isi-Uzo Federal Constituency of Enugu State, Paul Nnamchi, seeks to limit advance rent demands to 12 months, regulate agency fees, protect tenants against unlawful eviction and establish a regulatory authority to oversee rental transactions in the FCT.

The bill also proposes fines of up to N20m for corporate offenders who violate its provisions, while individuals convicted of breaching the proposed advance-rent restriction could face fines of between N500,000 and N5m.

However, the proposal generated divergent views during Wednesday’s plenary, with some lawmakers questioning the constitutionality of imposing restrictions on landlords’ property rights and freedom of trade, while others argued that regulation was necessary to protect tenants from exploitation.

Leading the debate, Nnamchi said excessive rental demands had placed considerable financial pressure on residents, affecting household savings, small businesses and employment mobility.

He explained that the proposed legislation was designed to establish a fairer and more accountable rental framework through the regulation of advance payments, a unified platform for identifying housing agents, reasonable limits on agency fees and protection against coercive practices.

“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.

Nnamchi added that a properly regulated rental market would promote transparency, certainty and accountability, protect consumers and improve confidence in the housing sector.

“The responsibility of legislation is not merely to protect economic transactions, but also to ensure that those transactions do not become instruments of undue hardship or exploitation,” he added.

He urged his colleagues to support the bill and allow it to proceed to the relevant committee for detailed consideration and stakeholder engagement.

“Ultimately, access to decent accommodation should not be determined by one’s ability to make extraordinary advance payments. Fairness, accountability and the protection of legitimate interests must remain the guiding principle of our rental markets. Mr Speaker, I so move,” he stressed.

In his contribution, Idris Zacharias, representing Ida/Igalamela-Ibaji/Ofu Federal Constituency of Kogi State, described the bill as important but urged the House to consider wider land and housing issues in the FCT.

He also called for the House Committee on FCT and Area Councils to be involved in the committee that would consider the proposal.

Similarly, Chinedu Ogah, representing Ikwo/Ezza South Federal Constituency of Ebonyi State, supported the bill, arguing that high rents and agency fees were making it increasingly difficult for businesses to establish offices in Abuja.

He cited the cost of renting a three-bedroom office in Wuse, which he said “ranges between N25m and N30m annually, with agency fees further increasing the financial burden.”

Ogah said the proposed legislation would help regulate the sector and encourage investment by providing clearer rules for rental transactions.

On his part, Jafaru Gambo, representing Bogoro/Dass/Tafawa Balewa Federal Constituency of Bauchi State, also supported the bill but argued that the word “prohibit” in its title should be replaced with “regulate.”

“The bill should have nationwide coverage, not just the FCT. Mr Speaker, this is my amendment to the bill,” he said.

Ibe Osonwa, representing Arochukwu/Ohafia Federal Constituency of Abia State, said he supported regulation but cautioned against a blanket prohibition on multi-year rent demands.

“This is a free market situation. By the free market economy, are we now going to, for every good or service that is sold outside, we now start to tell people how to trade on their own businesses?” he asked.

Osonwa argued that some circumstances could justify multiple-year rental arrangements, adding that the legislation should focus on regulation and clearly defined conditions rather than an outright prohibition.

For Kaduna lawmaker Joseph Bagudu, ‘regulation’ should replace ‘prohibition,’ noting that landlords needed to recover their investments, particularly in view of rising building material costs.

He disputed claims that agency fees could be as high as 25 per cent, arguing that the prevailing rate was generally around 10 per cent.

Ayodeji Alao-Akala, representing Ogbomoso North/South/Orire Federal Constituency of Oyo State, supported the bill, saying its provisions were targeted at compulsory multiple-year rent demands rather than preventing landlords from increasing rents.

He said the requirement for young couples to pay two years’ rent upfront placed an unreasonable burden on them.

“As a youth, when a corps member comes out of service now, and is being asked to pay two years, where will this insurance money come from?” he asked.

Alao-Akala said the proposed law could accommodate different payment arrangements, including monthly, six-monthly and annual payments, while preventing landlords from compelling tenants to pay several years’ rent in advance.

His Akwa Ibom counterpart, Patrick Umoh, however, warned that the bill could raise constitutional concerns bordering on property rights and freedom of trade.

Related News

• PDP crisis: Appeal court rejects recognition of interim NWC
• JUST IN: N’Assembly to transmit state police bill to Tinubu today
• UniAbuja land dispute: ASUU threatens industrial action

He urged the House to step it down for further consultation and a review of existing tenancy laws in the FCT.

The Deputy Speaker, Benjamin Kalu, who presided over the debate, acknowledged the constitutional concerns, while reference was made during the debate to Section 44(2)(c) of the Constitution, which provides for exceptions relating to laws governing leases and tenancies.

He, however, argued that the bill does not breach any provision of the 1999 Constitution (as amended).

Also speaking, Wale Raji, representing Epe Federal Constituency of Lagos State, said previous attempts to regulate rents had not adequately addressed the problem, arguing that the widening gap between housing demand and supply remained a major factor driving rental costs.

He maintained that social housing and increased housing supply were necessary to address the housing crisis, rather than relying solely on rent regulation.

Sunday Umeha (APC, Enugu) disagreed with the constitutional objections, insisting that the bill did not conflict with the Constitution and should be allowed to proceed to the next legislative stage, where its provisions could be scrutinised and amended.

He stated, “The purpose of this House is to make laws for the welfare and good governance of the Nigerian people,” he said.

“The bill is not anti-investment. The bill is not against even the landlords or those making investment in the real estate environment or industry. This bill is of good use to both the landlords and the tenants.”

He added that the proposal was consistent with the responsibility of the legislature to promote order and protect citizens from exploitation.

Minority Leader, Frederick Agbedi, also urged members to support the bill, saying the high cost of accommodation in the FCT was forcing residents into overcrowded and unsuitable living conditions in satellite towns and surrounding suburbs.

“I adopt the submissions of Honourable Umeha entirely as mine. A free market economy does not assume that everything has to be free. The way rent is being increased in FCT, a lot of people have moved to the suburbs where living conditions are pathetic. This bill is intended to cure some of these excesses. That you built a house at N1m today does not mean you must rent it out at N100m today,” he added.

He said the proposal was intended to address excesses in the rental market without discouraging investment in the housing sector.

House Leader, Prof Julius Ihonvbere, equally backed the legislation, citing the difficulties residents encounter in securing accommodation and the activities of unregistered estate agents.

“I think this is a very important bill. And I want to thank Professor Nnamchi for thinking about it,” he said.

Ihonvbere said the proposal would proceed to a public hearing, where Nigerians, professionals and other stakeholders would have the opportunity to make contributions.

He urged members to support the bill, adding, “We are in a stage where we have a duty to protect Nigerians. It’s not against you to build your house. You can build as many houses as you want.”

In his closing remarks, Kalu cited Section 16 of the Constitution, which provides for the promotion of citizens’ welfare and the provision of suitable and adequate shelter.

He argued that Nigeria operated a mixed economy in which certain sectors, particularly those connected to essential needs such as housing, could be regulated in the public interest.

“Not all sectors of the economy should be free and capitalist. Especially when it has to do with shelter, which is fundamental. So, some sectors should be regulated as well as controlled,” he said.

The bill was subsequently passed for second reading.

What the bill seeks to change

The proposed bill seeks to prohibit landlords, estate agents and property managers in the Federal Capital Territory from demanding more than 12 months’ rent in advance as a condition for securing or renewing a tenancy.

Titled, “A Bill for an Act to Regulate Advance Rental Payments, Prohibit Compulsory Multiple-Year Rent Demands, Establish the Federal Capital Territory Rent Regulation and Tenants’ Protection Authority, Provide Remedies for Unlawful Rental Practices, and for Related Matters,” it is co-sponsored by Ahmed Yusuf Doro.

Section 4 states that “a landlord, estate agent, property manager or other person acting on behalf of a landlord shall not demand, receive or compel a tenant to pay more than twelve months’ rent in advance.”

However, tenants may voluntarily pay beyond 12 months, provided the arrangement is not imposed by the landlord and is documented in writing.

The bill also seeks to prevent landlords from using compulsory charges or separate agreements to bypass the restriction. It proposes protection for tenants against intimidation, unlawful eviction and retaliation.

It further provides for the establishment of the Federal Capital Territory Rent Regulation and Tenants’ Protection Authority to investigate complaints, mediate disputes and enforce compliance.

Landlords who violate the proposed restriction could face fines of between N500,000 and N5m, while corporate offenders could be fined between N5m and N20m.

The bill applies only to residential and commercial tenancies in the FCT and proposes that the authority become operational within six months of the law’s commencement.