Plans to reinvigorate the real estate sector and engender confidence among operators and subscribers got a boost last week with the Senate’s passage of a bill for the establishment of the Real Estate Regulatory Council of Nigeria.
The bill seeks to curb fraudulent practices and ensure compliance with the National Building Code, standardise the business of real estate development by regulating the conduct of transactions in the real estate sector as well as provide enabling environment and transparency in the business of real estate development.
Similarly, it also targets to make the business of real estate development in Nigeria conform to international best practices and safeguard the ultimate interest of all stakeholders in the business.
Other objectives include, curb fraudulent practices in the business of real estate development, ensure the real estate business conforms with the National building code, create an innovative and sustainable environment to promote Nigeria as a real estate investment destination in Africa and the world.
Among its priority is to ensure real estate business in the country conforms with the money laundering prohibition act 2011 (as amended) and NFIU ACT 2018 in terms of anti-money laundering and counter terrorism financing due diligence compliance.
A major aspect of the bill is the establishment of the Real Estate Regulatory Council. The function of the council is to regulate the business of real estate development; promote sustainable development of the business of real estate as well as provide and promote strategic collaborations with investors in the business of real estate.
The council would also register, license all real estate developers and renew the license of real estate developers every three years, upon payment of the prescribed fees and fulfillment of all requirements and investigate and penalise unlicensed real estate developers that violate the provisions of this bill as well as protect the interest and funds of investors and other stakeholders in the business of real estate development in Nigeria.
Members of the council include one representative each from professional bodies in the built industry namely; Council for the Regulation of Engineering in Nigeria (COREN), Architects Registration Council of Nigeria (ARCON), Council of Registered Builders of Nigeria (COBORN), Estate Surveyors and Valuers Registration Board of Nigeria, Quantities Surveyors Registration Board of Nigeria and Surveyors Council of Nigeria (SURCON).
Others are Town Planners Registration Council of Nigeria as well as one person each to represent the Central Bank of Nigeria, (CBN) Standards Organisation of Nigeria (SON), Securities and Exchange Commission, Federal Mortgage Bank of Nigeria and the Nigerian Financial Intelligence Unit (NFIU), National Insurance Commission, Assets Management Corporation of Nigeria (AMCON) and Infrastructure Corporation of Nigeria (Infra-Co).
Some professionals in the sector have described it as a right step, but stressed the need to ensure that the council is strategically positioned and provided with essential logistical supports to function properly.
Others have expressed worries regarding the possibility of the new council usurping the roles of existing regulatory bodies in the Nigerian real estate industry.
The ‘Real Estate Regulatory Council of Nigeria (establishment) Bill, 2021’ was sponsored by Senator Aliyu Wamakko. The document was read for the first time on April 28, 2021 at plenary and scaled the second reading on June 22, 2021.
The passage of the bill followed the consideration of a report by the committee on establishment and public service. The deputy chief whip, Senator Aliyu Sabi Abdullahi, laid the report during plenary while Senator Nicholas Tofowomo, who presented the report on behalf of the Committee Chairman, Senator Ibrahim Shekarau said the establishment of the Real Estate Council of Nigeria would provide efficient, effective and transparent administration of real estate development in Nigeria.
The lawmaker recalled that the bill seeking to establish the Real Estate Council of Nigeria was passed by both chambers of the eighth National Assembly, but was not assented to by President, Muhammadu Buhari.
He said the president’s decision to withhold assent to the bill was as a result of certain observations raised by stakeholders at the time.
Reacting to the development, the new President, Nigerian Institute of Building, (NIOB), Prof. Yohana lzam, said the bill is a step in the right direction, it would help real estate developers to follow the provisions of the National Building Code, it would be
Izam said: “We need to study and see the details because a lot of councils are within the built environment so that we are not duplicating functions and hope there would not be areas of conflicts with other already established councils.
“Every council in the built sector is more of an enforcement body and anything that deals with enforcement of standards and so the structure of the council will specify the scope of their function as usual and once they have a required support from parent ministries supervising their function, the enabling environment in terms of budgetary support, logistics support must be provided to ensure that it carry out functions effectively.
“If it will merely be establishment of Councils that will not be properly supported, then it will just be there. The built environment is now beginning to have developers that are very strong in terms of compliance with law and so if we don’t have strong enforcement on building sites across the country where building sites are sealed and people break the seal and continue development or where officials went for enforcement and there are resistance because some powerful people are involved.”
He agreed there are concerns from builder’s perspective on the quality of housing estates, particularly in locations such as Abuja, the Federal Capital and other major cities, stressing that professionals have also been talking about the enforcement of the building code because of many other activities in the industry and the need to rely on such a law to ensure that high and the minimum standards.
“We have the building code but what we need is the enforcement law to give it a force of law because if we don’t have a law, it ends up as a recommendation of good practice for people, who has good conscience to comply with. If you are developing estate and you comply with the building code, we believe that the quality will be greatly improved. Many of our estates today fall below expectations in terms of the quality of the end products,” he said.
The President, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Sir Emmanuel Wike, welcomed the development.
According to him, the bill is restricted to property development, not practices and would ensure those who engage in housing developments are qualified as well as ensure national building code is followed in all developments.
However, Wike said the institution has inaugurated a committee to look at the bill and make recommendation.
An elated Real Estate Development Association of Nigeria (REDAN) President, Dr. Aliyu Wammako, said currently real estate development is not been regulated; ‘every Dick and Harry’ is property developers, adding that the bill will foster transparency in the sector.
He said the hurdle ahead is for the House of Representatives to concur on the bill.
The first vice president, Nigerian Institute of Town Planners (NITP), Nathaniel Atebije, noted that initially when the senate came up with the draft, recommendations were made on some of the proposals, adding that one of the things the institute stood against in the draft bill is the fact that in some cases they were trying to assume the functions of the regulatory bodies in the built sector.
Atebije said: “I haven’t seen what was passed whether they took care of some of our objections then. There were attempts to usurp the functions of the regulatory bodies like Town Planners Registration Council of Nigeria (TOPREC) and we recommended that there should be no estate developed, except the design has been done by registered town planner who has current practice license.”
