How to Protect Your Commission as an Estate Agent in Nigeria (After the Supreme Court’s “Effective Cause” Ruling)

Every agent has a story like this. You find the flat, you take the client to inspect, you go quiet for two weeks, and then you hear they’ve paid the landlord directly. When you ask about your fee, the reply is: “But you only showed us the place.”

A Supreme Court decision reported this year says that, in the wrong circumstances, the client may be right. This guide explains what the court decided, in plain English, and the habits that make sure it never happens to you. It’s not legal advice. If a large fee is already in dispute, speak to a lawyer.

What did the Supreme Court decide about agent commission?

The court held that an estate agent is not automatically entitled to commission just because he introduced a buyer or tenant. He must show that his introduction was the main and effective reason the sale or lease happened. Lawyers call this being the “effective cause”.

Here’s what happened in the case, as summarised in BusinessDay’s law report:

• An estate surveyor and valuer, P. K. Ojo, said he sourced about 20 acres at Awodiora Industrial Estate, Kirikiri, Lagos, for SDV Nigeria Ltd, through one of the company’s managers.
• SDV bought the land directly from the owner, SCOA Nigeria Ltd. Ojo sued for US$1.25 million in commission (then about ₦161 million).
• He won part of his claim at the trial court in December 2013. The Court of Appeal reversed it, and the Supreme Court agreed with the Court of Appeal.
• Two facts sank his claim. There was no agreement that SDV would pay him commission. And SDV showed it had started negotiating for the same land around three months before he said he introduced it.

The court added a point every agent should remember: if you give someone information they didn’t ask you for, they are free to use it and owe you nothing for it.

Does this ruling affect ordinary rent and sales deals?

Yes. The case was about a big commercial purchase, but the principle applies to the flat in Yaba as much as the warehouse in Kirikiri. If the only evidence of your role is “I told them about it”, you’re exposed. The habits below cost almost nothing and work for a ₦1.5 million rent as well as a ₦150 million sale.

6 habits that protect your commission

1. Agree the fee before you reveal the property

This is the big one. Before you send the exact address or the landlord’s details, get the client to confirm, in writing, that they’ll pay your fee if they take the property. A WhatsApp message is better than nothing:

For sales and large lettings, ask a lawyer to prepare a standard agency or mandate agreement for you once. Then you use the same document on every deal. In Nigeria, drafting agreements is a lawyer’s job, so don’t download a random template.

2. Get a mandate from the landlord or seller too

Commission can be owed by either side, but only if they agreed to pay it. If you’re working for the landlord, get their instruction in writing, with your fee and what you’re expected to do. A screenshot of a voice note saying “help me find tenant” is weak. A short signed letter is strong.

3. Keep a dated deal log

The Ojo case turned on dates: the buyer showed it had been negotiating before he said he introduced the land. So record your dates. Every time you send a listing, do an inspection or pass on an offer, note the date and keep the message. Our prompt #29 turns a long WhatsApp chat into a clean, dated record in a minute.

4. Ask early: “Have you seen this property before?”

Before you show a property, ask the client if they already know it or have spoken to the owner. If they have, you’re probably not the effective cause, and it’s better to know now than to fight about it later. Keep their answer in the chat.

5. Stay involved until the deal closes

Agents who disappear after the inspection make it easy for the client to go around them. Follow up on the offer, pass messages between the parties, and be at the signing. Each step you take is more evidence that you made the deal happen.

6. Register the deal with LASRERA if you work in Lagos

Lagos requires estate agents to be licensed and to register their transactions with the Lagos State Real Estate Regulatory Authority (LASRERA). That’s another official record of your role. LASRERA also says it offers mediation in disputes, which is cheaper and faster than court.

What should you charge, and what’s legal?

In Lagos, the state’s tenancy rules cap the agency fee at 10% of the annual rent, a limit widely ignored in practice. A proposed bill would cut it further, to 5%. We covered what that means for agents’ income in the Lagos 5% agency fee bill. Charging above the legal limit weakens your position if you ever need to claim your fee.

What to do if a client has already gone around you

1. Gather your evidence first: the fee agreement or message, your deal log, inspection dates, and anything showing you passed on offers.
2. Send a calm, written request for payment, stating the agreed fee and the date you introduced the property.
3. In Lagos, ask LASRERA about mediation before thinking about court.
4. For large fees, see a lawyer. They’ll tell you quickly whether your evidence passes both tests.

Frequently asked questions

Is an agent entitled to commission for introducing a buyer in Nigeria?

Not automatically. The Supreme Court held in Ojo v. SDV Nigeria Ltd that the agent must show an agreement to pay commission and that his introduction was the effective cause of the sale or lease.

What does “effective cause” mean?

It means your introduction was the main reason the deal happened, not just one piece of information among many. If the buyer was already talking to the owner before you came along, you’re unlikely to be the effective cause.

Is a WhatsApp message enough as a commission agreement?

It’s much better than nothing, because it’s dated and shows the client agreed. For sales and large lettings, use a proper agency agreement prepared by a lawyer.

How much commission can an agent charge in Lagos?

Lagos rules cap agency fees on rentals at 10% of the annual rent, and a bill proposes cutting that to 5%. Sales commissions are agreed between the parties.

Can a client avoid paying commission by paying the landlord directly?

Not if you have a prior agreement and can show you were the effective cause. That’s exactly why the agreement and your dated records matter.