The Lagos State Government is turning up the heat on illegal rental charges. In a recent announcement, authorities declared that fees such as caution fees and inspection charges are unlawful, as part of broader efforts to make housing more affordable.
While the intention is commendable after all, housing costs are a real challenge for many Lagosians, the decision to outlaw caution deposits raises important concerns, especially among property owners and real estate professionals.
So, What Exactly Is a Caution Fee?
For those unfamiliar, a caution fee (or caution deposit) is a refundable sum a tenant pays before moving in. It’s not extra profit for the landlord or agent, it’s a safety net.
It covers potential damage to the property beyond normal wear and tear. And let’s be honest not all tenants are responsible. From broken doors to stained tiles, broken Water closets, bath tubs and leaking pipes caused by negligence, some tenants leave apartments in a state that demands more than a coat of paint.
In practice, caution fees have helped landlords feel secure renting out their properties. Without it, landlords might be forced to hike base rent to protect themselves, ironically making housing even less affordable in the long run.
Scrapping the caution deposit may sound good in theory but for many property owners, it removes the one buffer they have against avoidable loss.
What About Inspection Fees?
This is where more agreement may lie. Many agents charge inspection fees as a way to manage time and transport costs, but it’s also true that these fees can be misused. In some cases, renters are charged multiple times with no guarantee of finding a suitable home.
Rather than scrapping caution deposits altogether, perhaps the focus should be on regulating how they’re handled. Clear receipts, defined conditions for refund, and timelines for reimbursement after tenancy ends can build trust on both sides.
Instead of treating landlords and agents as the problem, this could be an opportunity to professionalize rental processes and promote fairness across the board.
If a tenant keeps the property in good condition, he has the right to get a reimbursement of his caution deposit.
At Babajide Okusaga & Co., we believe in fair play protecting tenants from exploitation while also safeguarding landlords’ investments. The real issue isn’t the existence of fees, but how they are applied.
Yes, affordable housing matters. But so does responsible tenancy.
We should push for reforms that support both.
What’s your opinion on caution fees, let us know in the comments
Babajide Okusaga & Co are Chartered Surveyors and Real Estate Consultants with expertise in Agency, Investment, Management, and Syndication (AIMS). We are known for being client-focused and results-driven, aiming to connect clients with their specific real estate needs such as Investments, Sales, Letting, Joint Ventures, and Partnerships.
We dedicate time and energy to ensure clients’ satisfaction by helping them find the best-suited real estate solutions. Whether it’s leasing office space, financing a first home, purchasing a new factory, or managing an investment portfolio, Babajide Okusaga & Co caters to the considerations of corporate entities, individuals, and High Net Worth Individuals (HNIs).
Contact 02013423872 for Enquiries.
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