Across Nigeria, the real estate sector is awash with a putrefying stench oozing out from property developers’ closets. They are alleged to be milking subscribers dry, leaving them without the houses they paid for, and not paying interest for the huge funds they accumulated under misleading circumstances. It is a common tale in all the major cities and even among subscribers in the Diaspora.
Festus Adebayo, one of the few credible voices pushing for the regulation of the polluted sector, and Convener of Abuja International Housing Show (AIHS), Africa’s largest annual housing and construction meeting place says the situation is alarming. According to him, ‘’real estate subscribers in Nigeria and in the Diaspora are not getting the houses they paid for, some of them for over five years.
‘’The question that is agitating the minds of concerned citizens is, who is regulating, and protecting real estate subscribers in Nigeria? Prospective subscribers are interested in knowing what governments at the state and federal levels are doing about the situation.’’
Complaints are mounting on the authorities, following the plights of subscribers of real estate across the country particularly in Abuja, the Federal Capital Territory, Lagos, and Ogun State of being ill treated.
There is even a report of some 20 subscribers who were introduced to a housing scheme 10 years ago as one of the best investments estimated to appreciate at between 200% and 250% per annum.
Specifically, the subscribers besieged the company’s office recently to register their grievances. Their grouses include lack of documentation after full payments, which included survey fee, documentation fee; issuance of backdated letter of allocation; delayed physical allocation of land and in some cases, allocation of different plots from ones not shown or ones that are not within the estate, and non-issuance of survey plans at full payment for plots.
One of the aggrieved subscribers, Taofeek Abdulmalik, petitioned the Assistant Inspector General of Police, Zone 2 Command, Onikan, Lagos against a popular real estate company based in Lagos on allegation of obtaining money by false pretence.
In the petition, Abdulmalik said among other things that he subscribed sometime in 2009 to the company during their promo for two plots of land in the total sum of N1.1 million payable over a period of time. “I immediately commenced installment payment for the two plots. Subsequently, I requested for an inspection but my request was stalled and I stopped all payments pending the inspection.
“I was thereafter contacted sometime in December 2011- January 11, 2012 to come for an inspection and I was taken to the two plots of land allocated to me at the estate. On April 7, 2014, I made final payment for the two plots of land and a receipt was issued indicating full and final payment.
“Further to that, I also made payment for survey fee in the sum of N300, 000 and N40, 000 as documentation fee. However, to my utmost shock and disbelief, no documentation was done and there was no sign that anything was to be done.
Abdulmalik is therefore, calling for the recovery his money, alleging that it was fraudulently obtained by same real estate firm in the total sum of N5.440 million, being the total sum of N1.440 million collected by the Company and the sum of N4 million being the additional monies required to purchase two plots of land independently around the area.
Abdulmalik is just a case out of plural of cases affecting subscribers within and outside Nigeria.
Nigeria’s leading Housing focused non-governmental organisation, Housing Development Advocacy Network (HDAN) is persuaded to address this critical issue. The group says there are a multitude of cases which it’s bracing to expose on a case by case basis, pointing out that they are giving the developers benefit of the doubt at the moment.
‘’We have cases with proof which are currently with us waiting to be resolved. Our intention is to give developers the benefit of the doubt before we proceed to release the cases to the knowledge of the public in other to notify the subscribers and to warn them to be careful with their dealings with particular developers.
‘’HDAN has opened a whistle blowing platform that will involve regulatory authorities and other stakeholders in the sector, and allows subscribers who are aggrieved to come forward and table their cases for resolution via arbitration or legal means.
‘’The issue of people not getting their houses is not only on account of lack of capacity of the developers, but also on the account of some shady practices where they want to manipulate the market and make more money than they ought to have made’’, the group noted while appealing to the Central Bank of Nigeria (CBN) to swiftly intervene on the matter like it has done on cryptocurrency and shadow banking to stabilise the economy from sharp practices.
Nigerians in Diaspora are regarded widely as the worse hit in the ripping-off ring of real estate developers because of their huge remittances. Developers allegedly hide under the pretence of moving their clients from Phase 1 to either Phase 2 or 3 to perpetuate their unwholesome act whereas most of them have no construction site in the real sense of the word.
Like HDAN, Africa Housing News is not happy with the increasing and avoidable levels of unethical practices currently polluting the real estate and housing finance sectors in Nigeria. We are of the view that it’s high time the authorities began to regulate the sector as demanded by the advocacy group.
Interestingly, the Babajide Sanwo-Olu administration has taken the bull by the horn in Lagos, the commercial capital of Nigeria, by establishing Lagos State Real Estate Regulatory Authority (LASRERA). LASRERA has as its mission, creation of an innovative and sustainable environment to promote Lagos as a real estate investment destination in Africa and the world, and its vision, providing an enabling environment and transparent real estate sector, conforming with international best practices while safeguarding the interests of all stakeholders.
We are recommending this type of initiative to the Federal Government and other states of the Federation as a protection mechanism for real estate subscribers. Without regulating the sector immediately, we do not think Nigeria will be able to tackle its huge housing deficit.
While launching the national affordable housing delivery programme in Lafia, Nasarawa State in October 2018, Managing Director of Federal Mortgage Bank of Nigeria (FMBN), Ahmed Dangiwa, put the country’s present housing deficit at 22 million, indications of increase to the previous statistics of 17 million.
However, there is no gainsaying the fact that the unwholesome practice in the real estate sector is affecting the ability attract the requisite funding via FDI from diaspora and other sources on account of the opaque nature of activities of developers bothering on credibility. That helps to justify why the authorities, as a matter of urgent national importance, should regulate the sector immediately. There should be no further delay. The time to contain the rip-off in the sector is now!
