Who is to blame for real estate scams in Lagos?

Housing is one of the basic needs of all humans. Over the years, the surge in population of the nation’s commercial centre, Lagos, has assumed exponential proportions. Unfortunately, the provision of urban infrastructure and housing to meet this growing demand is not at commensurate level.

In the real estate business chain, there exists a group of ‘professionals’ that play a big role and due to high demand for their services, many Lagosians have fallen victims of their sharp practices.

Effiong had just moved over to Lagos from Akwa-Ibom, a state in the southern region of the country, and like several young school-leavers seeking the proverbial greener pasture, he was faced with no other option than to stay with a friend who already had an apartment around Iyana Ipaja, a suburb of Lagos.

After a few months, he felt the need to get his own apartment, even if it meant getting a single room where he could rest his head after a stressful day at work. So, he started saving a part of his monthly meager salary. Effiong later approached a roadside house agent who promised to get him a single room apartment in Bariga, a densely populated area in Lagos. After an inspection visit to a one-bedroom apartment and being satisfied with the relatively decent environment, Effiong paid for one year’s rent and was eager to move into his new apartment.

On the day he was to move in, Effiong received the biggest shock of his life. The room already had a new occupant! A visibly angry Effiong approached his house agent to know what had happened. The agent apologised to him and promised to get him an even better apartment. Effiong thereafter requested a refund of his rent, which the agent readily agreed to, but pleaded with him for some time. It’s already six months and Effiong is yet to get either a room or the refund of his money.

Effiong’s experience is just one out of several scams pervasive in the real estate sector — from the small players in the business value chain (roadside agents and caretakers) to the big players, such as private property developers and home builders in the industry.

Femi recalled how his room was burgled few days after he moved into his apartment. All efforts to get a refund from the landlord and his agent earned him a serious beating by touts allegedly sponsored by the landlord who had vowed never to refund his money to him.

Lagosians recently woke up to the news that a cross-section of homeowners at Horizon Premier-1 Estate in Lekki, an upscale part of Lagos, have dragged the Management of Lekki Gardens Estate Limited, and its Managing Director, Richard Nyong, to a Lagos High Court over the alleged distortion of the estate layout to build shops in the space originally meant for a children’s playground, green area and recreation facilities within the estate.

The homeowners, in a suit filed at a Lagos High Court, are demanding an immediate reversal to the original estate layout, which suffered over two years of delay in delivery— a default for which the subscribers are also demanding compensation.

Also, residents in its existing Lekki Gardens estate have complained bitterly about the atrocious state of facilities, and complete lack of maintenance. Some also complained about poor workmanship on some of the buildings, such as cracks on the wall, while some others complained about disjointed pipes.

 Scams in getting access to land and permits

The World Bank, in its Ease of Doing Business Series in Nigeria, ranked Lagos State as the worst place to secure construction permits in the country. The fear of falling into wrong hands and getting fake title documents has forced several people and investors hoping to own a house or build a factory in Lagos, to seek alternative locations such as neighboring Ogun State, to avoid falling into the hands of scammers and street urchins, popularly called Omo-Onile.

The increase in the number of reported cases of sharp practices in the real estate industry has waned investors’ confidence in the sector and out of curiosity, Nairametrics seeks to find out where the fault lies.

Blame Nigerian’s love for cheap things and greedy developers

It is not uncommon to see giant billboards on major highways across Lagos and flyers advertising housing units and lands at mouth-watering discounts and unbelievably low prices, all with the aim to attract buyers.

In an interview with Nairametrics,  Mr. Nnamdi Ijei, Chief Executive Officer of Highrachy Investment & Technology Limited, noted that Nigerians looking to buy property must always carefully seek and patronise professionals in the industry.

“No professional that has his name to protect will involve in any shenanigans or shady deals that will tarnish his image.”

He added that developers should always put into consideration the quality of building materials, the convenience of the structure for homeowners, and its impact on the environment when designing and planning their building.

According to Dr. Opaleye, an occupant in one of the newly built estates in the Lekki area of Lagos, developers are very greedy as most of them fail to deliver on time as promised. More worrisome is the fact that many of them use substandard building materials and even poor workmanship which are often covered with flashy paint coatings and aesthetics to conceal the defects.

“If you visit my house, you will see the poor job done. They don’t even deliver to the initial specification. Some of them will promise you a spacious compound and sporting facilities in the housing units but years after the completion of the house they are yet to construct any sporting facilities in my estate.”

Navigating through the mine field of dodgy real estate agents

Ms. Ellen Abada is an Executive Marketer at a real estate firm and she believes that most people usually ignore the red flags at the initial stage. She noted that real estate is a huge investment and anyone putting down his/her money must have a proper knowledge on how the industry works.

She, however, advised that anyone who wants to rent a room must request to be taken to the landlord of the building to avoid stories that touch, noting that some tenants even sign agreements without considering the future implications of such agreements.

A lawyer, Barr. Makanjuola noted that the Lagos State Tenancy Law 2011 was introduced to regulate the relationship and in particular, the rights and obligations of tenants and landlords under Tenancy Agreements, and the process for the recovery of premises and other related purposes.

He further advocated for proper education before signing any agreement with private developers and advised tenants to approach the Rents Tribunal in the state which is an alternative dispute resolution mechanism to resolve their rents issue.