Insight

Real estate: Feeding fat on buyers, accommodation seekers’ agony

Activities of fraudulent estate agents and property developers have reached the peak in the Lagos property market, leaving accommodation seekers, the major victims, with tales of woes. However, government is bracing to the challenge of regulating activities of practitioners in the state, reports DAYO AYEYEMI

Real estate business is one of the legal and profitable ventures people can go into in Nigeria. But due to huge population of accommodation seekers and unemployment rate in the country, the business has become an all-comers affair as quacks and fraudulent individuals, masquerading as estate agents and property developers have hijacked the venture, giving it a bad name.

Fraudsters have dented the image of the business for real practitioners following their sharp practices as they defraud innocent people of their hardearned money in the disguise of helping them to secure accommodation. For Mr. Titus Okoye, a trader in clothing, his dream of ‘sacking his landlord’ is hanging in the balance, having been duped by fraudsters masquerading as property developers.

The 38-year-old man planned to build a personal house to get off the hooks of the shylock landlord who was ready to snuff life out of him through incessant upward rent reviews. In less than five years, his rent for his two-bedroom apartment at Mende, Maryland, Lagos had doubled to N700,000 from N350,000 in 2015.

Throughout this period of rent review, Okoye said his salary remained constant. Eagerness to do something about the situation and fulfil his dream of becoming a homeowner urgently, he explained, led him to a company (name withheld) located at Allen Avenue in Lagos, for an enquiry. Okoye said an agent from the company had once introduced different housing opportunities being promoted by the firm at Badagry, Lekki, OPIC and Mowe areas of both Lagos and Ogun states.

He said: “I filled a form and offered to buy a serviced plot in one of the estates located at Mowe. They took me on a site visitation and I was fascinated by what I saw – an estate gate, blocks for perimeter fencing and poles for electricity, among others.”

Okoye added that he later deposited N850,000 out of N1.2 million and was allocated a plot of land in the estate, with the understanding to pay the balance within three months before commencing building construction. Two months later, Okoye received the shock of his life when he was informed by the agents that the situation had changed. “According to the agent, the company had issues with the land owners that could not be resolved soon. Therefore, the company decided to relocate all subscribers to another location at Orimerunmu around Mowe and fixed a new date for allocation,” he narrated.

In order not to lose out completely, Okoye said he complied, only to discover that the new location also had problems. From that moment, he demanded a refund, which he is yet to get. As at the last time, he said the whereabouts of the company and the agent were unknown; having changed names and relocated to unknown destination. Okoye was not alone in this mess as two other subscribers, who identified themselves simply as Collins and Ayooluwa, shared their harrowing experiences. All over Nigeria, especially Lagos State, bitter tales on the nefarious activities of estate agents from victims dot the landscape.

If victims, who are accommodation seekers or house buyers, are not duped or defrauded in the process, many are confronted with illegal commissions and agreement fees of between 20 and 30 per cent. An estate agent described as a person or business that arranges the selling, renting, or management of properties and other buildings, while a property developer is a person whose job involves buying, improving, and selling buildings and land, and arranging for new ones.

Responsibilities of an estate agent include liaising with clients to market properties in the most appropriate manner to maximise the selling value, handling enquiries about properties from potential buyers, and negotiating the sale and letting of properties.

The experience of another Lagos resident, Mrs. Sharon Ilesanmi, with an estate agent is not palatable as she was duped of N500,000 for a three-bedroom bungalow at Ogba. Although she reported the case to the police, she said she was yet to recover from the shock. Sometime last year, the police arrested a real estate developer, Alabi Idowu, for allegedly defrauding over 200 intending tenants in a newly-constructed building at No. 1, Karimu Street, off Oyebanjo Street, Alapere, Ketu, Lagos State.

It was learnt that the developer also posed as the landlord of the building to defraud the prospective tenants to the tune of N50 million. While negotiating with the accommodation seekers, the developer reportedly informed them that finishing touches had to be applied on the building before they could move into their flats. After payment, Idowu told his victims to meet him in the house on Monday, June 24, 2019, to receive the keys to their respective flats.

However, the developer was alleged to have released keys to some of the intending tenants before the agreed date. One of the intending tenants, who identified herself simply as Shonibare, said over 200 people were left stranded in front of the building, adding that some claimed to have paid for their flats when the building was at the foundation level. “After inspecting the house, the man, who claimed to be the owner of the house, introduced himself as Alabi Idowu. We immediately paid N180,000 into a Guaranty Trust Bank account in the name of Alabi Teslim Idowu, and N150,000 into an Access Bank account with the name, Tunde Adewale, his partner, and he gave us a receipt,” Shonibare said.

Thereafter, he said the ‘landlord’ told them that he needed to fix the water closets in the flats and asked them to come to the house on June 24, 2019 to receive the keys to their flats. “But on Saturday, my brother, Tobi, informed my mum that something was going on with the house and when we got there, we met over 200 people sharing their experience of how they had been defrauded,” he said.

The victims later proceeded to the state secretariat, Alausa, Ikeja, to protest because of the number of the people and the amount involved. In another case, 75 people for five units of flats in Gbagada Area were duped by an agent. Also at Gbagada, the spokesperson in the office of the Lagos State Real Estate Transaction Authority (LASRERA) said, there was a case of a woman who lost her pregnancy because an estate agent duped her when she was searching for an accommodation. At Awode-Ora-Ajegunle, 30 people were also duped of N30 million by an estate agent. Also at Church Close, Ajao Estate, Lagos, 133 victims were duped of N25 million by an estate agent.

At Abeni Close, Ajao Estate, it was reported that 15 victims were duped of N30 million by some estate agents. The irony in all of these is that some of these agents have no address to trace them. All these cases were reported to the state government.

Justifying the need to curb excesses of estate agents and property developers in the state, the Special Adviser (SA) to Governor Babajide Sanwo-Olu on the Lagos State Real Estate Trans-action Regulatory Authority (LASRERA), Adetoke Benson-Awoyinka, said that a physically-challenged couple were duped at the Mushin area by an estate agent while they were seeking accommodation. This development, Benson-Awoyinka lamented, has become a daily occurrence in Lagos property market. This crime is not limited to Lagos and Ogun states, cases of real estate fraudsters abound in major cities of Nigeria.

To put an end to the nefarious activities of property developers and estate agents, Lagos State government is not living any stone unturned as it has put machinery in place to wage war against the crime. To its credit, the authority, through LASRERA, has seized two houses in the metropolis. According to the Special Adviser to Sanwo-Olu on LASRERA, the state government has resolved to take strong measures to stop developers and agents from defrauding members of the public.

She said the agency was currently prosecuting two developers who allegedly duped people in the Ketu and Mafoluku areas. Benson-Awoyinka added that the authority had also seized their properties, disclosing that her office was working on ways of selling them. She said: “Proceeds from the sale would be used to settle those who were defrauded.”

The SA, however, appealed to members of the public to always patronise agents and developers, registered with the agency. She said: “We have successfully reviewed the Estate Agency Regulatory Law, Cap L28, Laws of Lagos State, 2015 presently in operation in the state, which provides for the establishment of the Lagos State Real Estate Regulatory Authority. “The essence of this law is to regulate real estate transactions in Lagos State by identifying persons eligible to be licensed as real estate practitioners and provide for the issuance or renewal of annual permits.” According to her, the agency has the responsibility of maintaining a register of licensed real estate practitioners and sanctioning of unlicensed ones in the state.

By this, it means that anyone engaging in real estate business/transaction in the state must register with LASRERA for the purpose of monitoring and ensuring adherence to proper code of conduct in the discharge of their functions. To show it meant business, the authority, recently, unveiled the LASRERA website and registration database portal, while reading the riot act to real estate practitioners in the state.

Explaining the change in the name of the agency from the Lagos State Real Estate Transaction Department to the Lagos State Real Estate Regulatory Authority (LASRERA), Benson- Awoyinka stated that it was geared towards transforming Lagos into a 21st Century economy. She recalled that Sanwo-Olu approved the transition of the department to an agency on February 7, 2020. According to her, the mandate of the new office includes the preparation of rules and regulations for the practice of estate agency and other connected matters in the state. Others include identification of persons eligible to be licensed as estate agents and renewal of annual licenses; sanction of unlicensed estate agency practitioners in the state, as well as the investigation of complaints and peti-tions against licensed estate agency practitioners, among others.

Experts’ views

On how to guide against activities of fraudsters during real estate transaction, the Chairman of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos branch, Mr. Dotun Bamigbola, urged people, especially home buyers and accommodation seekers, to always work with professionals in their decision to buy or rent a house. He said: “You know a professional through established work or membership of structured institutions. You identify a professional by conduct and the professional association they belong to.

It should be noted that estate agency is a specialised profession and should not be an all-comers practice. “In Nigeria, a professional estate agent is one who has all three identities above. They are members of the Nigerian Institution of Estate Surveyors and Valuers who have estate agency as part of their training band practice and members of the Association of Estate Agents of Nigeria (AEAN), a specialised body formed by NIESV.” According to him, estate agents also have some specialised training in estate agency, like NIESV members.

“NIESV members are in fact, registered under a Federal law which is the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON). “You can recognise members of these two professional bodies with the specific logos of their institutions,” Bamigbola added. Another senior professional, Mr. Stephen Jagun, urged members of the public to always consult estate surveyors and valuers when looking for accommodation. “You can confirm their membership from the institution and if they err, they can be traced, reported to NIESV and ESVARBON.

If found guilty, they can be punished,” he said. On the registration of real estate practitioners by the Lagos State government via LASRERA, some of the experts kicked against it while others supported the initiative. Some of them said they are not liable under the federal law establishing their institutions and Estate Surveyors and ESVRBON to register with LASRERA. According to them, lists of all registered estate surveyors and valuers in all the states of the federation are with these two bodies.

They added that if any professional is found wanting, government should approach the bodies to seek redress. Jagun said that the state government has the right to monitor real estate transactions in the state but “does not has the power to regulate activities of real estate surveyors and valuers”. According to him, NIESV is guided by the federal law establishing it and its regulatory body – ESVRBON, and not state law. If an estate agent erred, Jagun said the state government has the right to report the case to the professional body or the police, pointing out that NIEVS has the register of all members and is ready to discipline anyone caught with sharp practises. “So trying to create any agency is not the solution since there are existing laws and like the EFCC to report to,” he said.

Jagun also cautioned government not see the registration of real estate practitioners as the avenue of revenue generation. He said: “Lagos State needs to take it easy with some of these things because it is only looking at how it would take charges and revenue.”

But the Society for Professional Valuation (SPV) said it put its weight behind the establishment of an agency to regulate the practice of estate agency and development in Lagos State. SPV made its support known through its Chairman, Board of Trustee, Mr. Sola Enitan.

In a statement entitled: “Justification for the Establishment of Lagos State Real Estate Regulatory Authority (LASRERA),” Enitan said that real estate as the fifth largest contributor to the national Gross Domestic Product (GDP) ought to be carefully regulated by the government. According to him, the spate of real estate criminality, fraud, money laundering and outright unethical conducts of real estate agency practitioners have more often than not earned the practice of estate agency within the state a bad name.

He said: “In the light of recent controversies and outcry of estate surveyors and valuers practicing in Lagos State against the call by LASRERA for all estate agents and developers operating within the state to register with it, it has become imperative to lend a clear voice to the debate and direct the minds of all practitioners, according to the dictates of the laws of the land. “States are saddled with the responsibility to ensure the welfare and security of lives and property as fundamental purposive actions for good governance.” According to him, state government owes the public good governance, regulatory directions and professional licensure of practitioners, where applicable; in the critical sectors of the economy.

“LASRERA is saddled with the following strategic objectives: “Foster a transparent, competent and sustainable transactions regime in contractual relations amongst parties in the real estate market. “Prescribe regulation and licensure for the real estate agency practitioners in Lagos State,” he said. Another Lagos-based estate surveyor and valuer, Mr. Lekan Akinwunmi, said he saw no reason Lagos State government to prevent professionals from carrying out their activities in the state.

He said: “In my own personal opinion, we have professional regulatory bodies. There is no need to register with the Lagos State government.” He argued that the certificate given to him as estate surveyor and valuer was to practice anywhere in Nigeria. “By what the Lagos State government is trying to do, this means that I have to register in 36 states of the federation,” he said. According to him, estate agency is under estate surveying. He added that there is no way to sell a house without carrying out valuation.

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