When acquiring a property to lease (rent) for the first time, some fees accrue to the first payment ONLY aside the rent itself. These charges/fees range from 30 – 40% of the rent. We’ll try to breakdown what these fees are so that you’re aware of what to expect and plan your budget holistically. It will also help you foretell a scam situation.
Let’s get to the breakdown:
10% OF RENT FOR LEGAL FEE
This fee is meant to be paid to the lawyer who prepares the agreement letter between Tenant and the Landlord or Agent. It’s officially 10% of the rent. E.G If your rent is N200,000.00, the legal fee is N20,000.
10% OF RENT FOR CAUTION FEE
Technically, this fee is still your money. It is meant to be refunded to you when you’re moving out of the house with no damages incurred. This fee is collected as a control measure for repair of damages done by a tenant before leaving the house. So if there are no damages, then it’s meant to be returned to you.
10% OR 20% OF RENT AGENCY FEE
This is the fee paid to the agent in charge of the property you’re about to rent (10%) and every agent(s) or marketing company (10%) that may have contributed to the process of finding and getting the apartment.
SERVICE CHARGE (OPTIONAL)
This is the charge paid upfront for security, cleaning and electricity bill. This fee is determined by the community or the landlord of the apartment you’re about to rent. Not all apartments request for this and there is no fixed amount.
An apartment valued at 150k per annum for rent
150k + (15k legal fee + 15k caution fee + 30k Agency fee) = 210k Total Package
I hope this has helped you understand why agents charge the way they do. If you’re asked to pay any fee higher or extra aside what is stated above, you may need to confront your agent and ask why.