Who Gets Paid? The Supreme Court Settles Agency, Authority And Commission In Nigerian Real Estate

Introduction

Nigeria’s real estate sector has become one of the most valuable and resilient parts of the national economy, with a projected market value above $2.42 trillion by 2026¹  For institutional buyers and high-net-worth Investors, property offers a hedge against inflation and a source of steady returns-and that appetite keeps the deals flowing.

Yet commercial practice and legal certainty often pull in opposite directions. Intermediaries — estate agents, brokers and consultants — drive many transactions, but their legal standing frequently stays unclear. The most common flashpoint is commission: who has earned it, and on what basis.

These disputes usually trace back to the same root causes: informal arrangements, vaguely defined mandates, and the absence of a written contract between the parties. Intermediaries often assume that introducing the eventual buyer automatically creates a legal right to be paid. A patchy regulatory landscape compounds the problem. Outside Lagos State — where the Lagos State Real Estate Regulatory Authority Law, 2021 (the “LASRERA Law”) regulates practitioners, agency relationships and transaction practices — the market still runs largely on fragmented, informal practice.

Against this background, the Supreme Court’s decision in Philip Kayode Olusegun Ojo v. SDV Nigeria Limited & Anor (“the Ojo case”)²  delivers timely and much-needed clarity, setting out with authority the principles that govern agency relationships and commission claims in Nigerian real estate. This article examines the Court's reasoning, explains the doctrines behind it in plain terms, and draws out what they mean in practice.

How Real Estate Deals Actually Come Together

A typical Nigerian property transaction brings together several players — owners, purchasers, intermediaries, legal advisers and valuers — working toward a common goal, yet the legal relationships between them are often left undefined.

The gap shows up most clearly with intermediaries, whose involvement grows organically rather than through a signed mandate. Agents do real work: identifying properties or buyers, opening early discussions, sharing market insight, and sometimes coordinating a deal to completion. But valuable work and legally rewarded work are not always the same thing. The legal question is not whether the intermediary did the work; it is whether they did it under a recognised agency relationship capable of creating enforceable rights — which turns on two ideas: authority and effective cause.

The Legal Foundations: Agency and Authority

Agency is the legal relationship in which one person (the agent) is authorised to act on behalf of another (the principal), affecting the principal’s legal position with third parties³  Nigerian courts treat it as a fiduciary relationship, which means the agent owes the principal duties of loyalty, good faith and full disclosure. Crucially, agency rests on consent: the principal must, in some recognised way, have agreed that the agent may act for them.⁴ It cannot be self-appointed.

A few terms recur here, and they are worth pinning down:

• A fiduciary relationship is one of trust demanding loyalty, honesty and full
• The effective (or efficient) cause is the act that genuinely brings a sale about, not merely one of several events preceding it.
• Consensus ad idem is a true meeting of minds on the same terms — the foundation of any binding contract, and
• Quantum meruit ("as much as is deserved") allows payment for work done where no price was fixed but cannot rescue a claim where no contract or mandate existed.

Consent can be shown in several ways, and the categories explain why the appellant in the Ojo case failed. The law recognises authority in broadly four forms:

• Express actual authority: The principal spells out the mandate, orally or — preferably — in writing, such as a letter instructing an agent to find a buyer at a stated This is the clearest and safest basis for a claim.
• Implied actual authority: Authority that is not stated but flows from the express mandate, the parties' conduct, or the ordinary incidents of the role, letting the agent do what is reasonably necessary to carry out the task.
• Ostensible (or apparent) authority: Authority arising where the principal's own words or conduct lead a third party reasonably to believe the agent is The representation must come from the principal — not from the agent's assertion about themselves⁵
• Ratification: Where a person acts without authority but the principal later adopts the act, the principal is treated as having authorised it from the outset.

These distinctions are not academic; they decide who bears the risk when a deal is informal. An intermediary who cannot point to express, implied, ostensible or ratified authority has, in law, no agency at all — however genuinely they believe they were "acting for" a party. The Ojo case is, at heart, an application of these settled principles to a familiar commercial muddle.

The Dispute in the Ojo Case

The facts will feel familiar to anyone in the market. The appellant, a professional estate surveyor and valuer trading as P.K. Ojo & Co., said he had played a central role in a high-value transaction involving an industrial property at the Awodiora Industrial Estate, Kirikiri, Lagos: he identified the property, introduced it to the eventual purchaser, and got the early discussions going.

The purchaser, SDV Nigeria Limited, then bought the property directly from its owner without his further involvement. He sued for commission of US$1,250,000, arguing that initiating the transaction entitled him to be paid.

The Lagos State High Court partly agreed with him. The Court of Appeal reversed that decision. He then took the matter to the Supreme Court, which faced a narrow but important question: can an intermediary who merely introduces the parties claim commission with nothing more — no established agency relationship, and no proven authority from the party he says owes him?

What the Supreme Court Decided

The Court answered firmly, applying principles of agency and contract law. Although the appellant presented himself as an intermediary, the Court found no binding agency arrangement between him and the first respondent. Measured against the four routes to authority, his claim had no anchor: no express appointment such as a letter of authority; no conduct from which authority could be implied; no representation by the respondent that could found ostensible authority; and no later adoption of his acts amounting to ratification.

The Court reaffirmed that agency arises only where one party is authorised to act for another, with that party's knowledge and consent, and that the authority must be clear, deliberate and traceable to the principal. A party's belief that they were acting as an agent is no substitute for authority granted by the principal.

On commission, the Court was equally direct. Effort alone — even genuine early involvement — does not create a right to payment. Entitlement must rest on a valid contract or agency relationship reflecting a true meeting of minds, and there must be a demonstrable link between the agent's authorised role and the eventual closing of the transaction. The Court added that a person who voluntarily confers a benefit, without being asked, acquires no legal right to be paid for it.

The commercial message is sharp: creating value and earning a legal right to be paid are not the same thing. An intermediary may visibly connect the parties, but without a defined framework setting out authority and terms, that contribution may carry no enforceable right at all.

Why Effort Alone Does Not Pay: The “Effective Cause” Principle

Behind the Court’s reasoning lies a long-standing rule in estate-agency law: even where an agent is properly engaged, commission is earned only where the agent’s authorised act is the effective cause of the sale.⁶ An introduction that merely starts a chain of events is not enough if the deal ultimately closes for other reasons or through a different route. The agent must show a real, causative connection between what they were authorised to do and the transaction that completed.

This principle protects both sides. It stops a seller from sidestepping a fee by closing quietly behind an agent who genuinely produced the buyer, and it prevents an intermediary from claiming a windfall on a casual introduction that played no real part in the outcome. In the Ojo case the appellant faced both obstacles at once — he could prove neither the authority that would make him an agent, nor the effective causal link that would entitle even an authorised agent to be paid.

Intermediaries sometimes hope that quantum meruit — payment for the reasonable value of work done — will rescue a claim where no fee was agreed. It will not fill the gap here. Where there is no authority and no effective cause, there is simply nothing for the law to value.

The Regulatory Picture: Lagos and Everywhere Else

In most Nigerian states, the authority of intermediaries and their right to commission still turn on general contract principles and the common law of agency described above. Lagos is the notable exception. Through the LASRERA Law, the state has built a statutory regime to regulate transactions and professionalise intermediaries, creating a regulatory authority, defining market participants such as brokers, and setting out how they must register and operate.

Under this regime, registration is foundational rather than a formality. Individuals and companies that want to operate as real estate practitioners must meet the eligibility requirements, register with the Authority and obtain a permit before they transact.⁷  The law also defines who counts as a broker and ties their fee to a concluded transaction.⁸

Commercially, one of the law’s most significant features is its treatment of fees. A single permit holder may not charge more than 10% of the total rent or purchase price received from a client, whether the deal is a lease or a sale.⁹ Where two or more permit holders are jointly retained in the same transaction, they may jointly charge no more than 15% of the proceeds.¹⁰ These limits give investors more predictability and reduce the risk of inflated or disputed charges.

Importantly, regulation does not rewrite the basics. As the Supreme Court confirmed in the Ojo case, an agency relationship still requires clear consent, defined authority and a real mandate linking the intermediary to the deal. Statutory regulation assumes that relationship exists; it does not create one. Registering with LASRERA and following its standards does not, on its own, entitle a practitioner to commission without a valid contract or agency arrangement. Compliance opens the door to practise; it does not guarantee a fee on any particular transaction.

Outside the states with their own framework, the common law governs entirely — which is why the Ojo case carries such weight. It states the law applicable across those states: commission is not earned by introduction or preliminary talks alone, but must rest on a valid agreement and the agent's effective role in bringing the deal about.

What This Means for You: Protecting Your Position

The decision reaches every part of the market. Whether you are an investor, developer, property owner or intermediary, a few practical steps will keep commercial expectations and legal rights aligned:

• Define authority clearly: Spell out the agent’s mandate from the start — whether it is limited to introduction, extends to negotiation, or includes authority to conclude the transaction. Ambiguity is the single biggest source of disputes.
• Match expectations to enforceability: Courts will not rely on assumptions or “industry practice” where there is no valid contract. If you expect to be paid, secure the agreement that makes payment enforceable.
• Address the commission trigger directly: State precisely what earns the fee — a completed sale, a binding offer, or a successful introduction — and confirm the agent’s role must be the effective cause of that result.
• Comply with applicable regulation: Where a framework like LASRERA applies, register, obtain a permit and observe the fee caps — but treat compliance as a baseline, not a substitute for a proper mandate.
• Document the process: Record the transaction and the parties' roles in writing as the deal progresses, so the causal link is easy to prove if questioned.
• Execute a written agreement: Formalise every mandate in a properly executed agency agreement before work begins. This single step prevents most commission disputes.

Conclusion

The market is moving from informal agency toward a structured, formal legal regime. In the Ojo case, the Supreme Court reinforced the building blocks of contract — offer and consideration as evidence of consent, and acceptance as the basis for a genuine meeting of minds — and applied them to the everyday reality of property dealing.

That shift should draw the sector further into the formal economy, giving parties greater certainty and improving the outlook for investors. For intermediaries, the message is clarifying rather than discouraging: the law will protect a fee that is properly earned and properly documented. The decision is a significant and timely signal to settle authority, terms and commission in writing before the work — and the money — are on the line.

Footnotes

^{1 Statista, ‘Real Estate – Nigeria’ https://www.statista.com/outlook/fmo/real-estate/nigeria’ accessed 26 April 2026.}

^{2 Philip Kayode Olusegun Ojo (trading under the name and style of P.K. Ojo & Co.) v SDV Nigeria Ltd & Anor (2025) LPELR-81498(SC), judgment delivered 23 May 2025; also reported (2026) 3 CLRN.}

^{3 Nigerian Industrial Development Bank Ltd v Olalomi Industries Ltd (2002) 17 NWLR (Pt 795) 58.}

^{4 Eyiboh v Mujaddadi & Ors (2021) LPELR-57110(SC).}

^{5 Nwaribe v Owerri Municipal Council & Ors (2015) LPELR-24433(CA), where the court held that, for agency by estoppel to be implied from a person’s conduct, the conduct must be unmistakable and unequivocal.}

^{6 Miller, Son & Co v Radford (1903) 19 TLR 573, where Collins MR held that the right to commission does not arise merely because the agent introduced a purchaser or tenant; the introduction must be the efficient cause of the sale or letting. The Supreme Court applied this principle in the Ojo case.}

^{7 Section 27, LASRERA Law.}

^{8 Section 1, LASRERA Law (defining a ‘broker’ as a person, organisation or agent who arranges a transaction between a buyer and a person or organisation dealing in real estate for a commission after the execution of the transaction).}

^{9 Section 32, LASRERA Law: a permit holder shall not demand a fee exceeding 10% of the total rent or purchase price received from a client in respect of a lease or sale.}

^{10 Section 32, LASRERA Law: where two or more permit holders are jointly retained by a principal in the same sale or lease, they shall jointly demand an amount not exceeding 15% of the total proceeds. Outside Lagos, parties remain free to fix commission by express agreement.}

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.