By Chris Emetoh,
No doubt, one of the fastest growing sectors in Nigeria today is the real estate sector. Unfortunately, like all good things in Nigeria, there is a proliferation of fraudulent scams by some real estate companies.
There are so many Real Estate companies in Nigeria more especially in popular cities in Nigeria offering Nigerians the opportunity to own homes through installment payment to help an average Nigerian balance his budget monthly and still have that desire to own their own lands or homes. While this is welcome development and should be gratefully appreciated, their efforts to promote this laudable idea of providing affordable housing, can be appalling with the level of scams, lack of information and deceitfulness that most of these real estate developers practice to hood wink people into paying huge monthly monetary installments without performing their own part of the bargain when the chips are down. On daily basis relevant agencies and government authorities are inundated with phone calls, emails or the other asking to verify these lands offered up for sale by these companies and whenever there is venture to engage a surgical due diligence on them, one is often shocked at their responses and what they intend to offer to .
Most Nigerians just fall for their beautiful marketing strategies to buy these lands without questioning the source of their title and what they are to get in return. You hear marketers on behalf of these estates promoting the benefits of a new estate that is close to a proposed international airport or free trade zone and that the futuristic estate would have good roads, hospitals, schools, boreholes etc that would generally make you believe that you might be purchasing a future Lekki phase One, Asokoro or Maitama with just a minimum of N25,000 monthly for 2 to 3 years but what they fail to tell you is how it can be realised and the likely authentic documents they possess to make it materialize and feasible.
In the course of this report africahousingnews .com got an in-depth detail on how most of these scams are perpetuated from a property lawyers who shared experience with us on things they encountered in the course of verifying lands being marketed by real estate companies in the country.
According to one of our sources Mr McJay Obu, the most prominent part of all property scam by real estate companies is excision under processing .
He said that about 80% of all real estate companies engage in this as they fail to tell subscribers the stage of processing which their ‘excision’ has reached. “From my experience, some of them simply commence the process and abandoned such excision at Alausa once the land is sold out”.
He also explained that some of the company officials frequently lie to subscribers that their estates fall under C of Os and Gazettes.
“This is actually an old trick they learnt from Omoniles but have perfected the art and now marketing same to their subscribers. They have a parcel of land and market it claiming that it falls under a Certificate of Occupancy. However, when you take a Registered Surveyor to obtain the coordinates and chart it at the Surveyor General’s office at Alausa, it would indicate that such land falls outside of the C of O paraded by such real estate company.
for the records an Omonile (as commonly known in the Western part of Nigeria, mostly Lagos State) is a land owner or administrator who has enormous powers to sale a piece of land to more than six buyers and still maintain ownership of the land, a situation that had always been a threat to property purchase in the afore mentioned region.
A deceitful stance in Lagos State in particular is that most real estate companies claim that upon purchase of their lands, you’re free from the usual foundation, fencing and roofing fees by Omonile. What they fail to tell you is that such fees are now collected by these real estate companies in the form of building fees and hidden charges.
this tehn brings us to the issue of Hidden charges and undisclosed fees.
This is one of the most notorious scams by most real estate companies. At the time of purchase, they’ll market plots of land to subscribers at certain ‘affordable’ prices, but fail to disclose to subscribers that there are extra fees to be paid after purchase of the land. Ironically, it’s not uncommon for these extra fees to be more than the price of the land. For instance, you buy a plot of land from an estate at Two Million Naira and you’re billed to pay the following extra charges:
250,000 for Survey fees
150,000 for Legal fees
100,000 for Architectural drawings
1,250,000 for Estate Development fee
100,000 for Security fees
100,000 for Supervisory fees
This may sound incredible, but it is equally very rampant with some real estate companies. Selling more land than paid for., A senior staff of one of these companies after I made a post on my facebook wall asking subscribers to share their experience with me, called me in confidence and informed me that he just discovered that he’s in serious trouble. He recently discovered that his company paid the land owners for less than 24 Plots but had sold more than 400 plots to subscribers. The catastrophe awaiting these innocent subscribers is better imagined.
There is also the problem of Fraudulently selling government committed land.
This is very important and is commonplace in with real estate companies . Committed lands are government-acquired lands and committed for a particular purpose by the government. Such purposes are roads, markets, schools, hospitals, police stations, barracks, etc. These are the worst kinds of land to buy as the government would demolish anything on the land when it is ready to start such project. It is not uncommon for real estate companies to sell lands proposed for public infrastructure. Some companies sold portions of the land for the 4th Mainland Bridge project and some are already selling portions of land committed for government estates in Ibeju-Lekki, similar situation abound in the highbrow areas in Abuja.
Some of these real estate companies give unreasonable conditions aimed at preventing subscribers from taking possession of their plots.
This scam is unknown to many subscribers and even the agents who market the estates to innocent subscribers. All real estate companies have conditions for living in their estates. However, some of them give extremely rigorous conditions which the average subscriber can’t meet. The more callous the management of the real estate is, the more ridiculous the contract is.
For instance, one of the most prominent real estate companies in the Federal Capital Territory (FCT) has a clause in its contracts that after payment for the land, you don’t get allocated your land until you show intention to build. For you to show intention to build, you must provide extra sums which amount to about 150% of the cost of the land, and other funny requirements. The problem is that anyone who buys from such company is going to only have paper to carry about, but not a single grain of sand to show as Land.
Most of these mushroom companies are run by profiteers who have no professional certification in real estate. They are only out to collect as much money as possible from innocent Nigerians before moving on to the next victim. Unfortunately, since these corporate quacks have no professional body regulating them, they have no professional sanctions handed them as a result of their fraudulent mix of crimes.
Don’t be deceived by their glamorous packaging, it’s all a smokescreen to make innocent Nigerians fall for their scams.
However, it must be noted that despite the dark activities of some companies, not all real estate firms are in the business of scamming innocent citizens. The problem is that most potential buyers would never engage professionals to verify and advise them before they commit their hard earned money. After they’ve been scammed they run to Counsel expecting”magic” to be performed in recovering money lost. Subscribers should always look beyond glamorous packaging, it’s all a smokescreen to make innocent Nigerians fall for their scams. It is important to reiterate that despite all points above, buying land from a genuine real estate development firm that has a reputation to protect is still much safer , but be smart, do due diligence before parting with your money either buying from agents or real estate firm.
