Experts just listed why plans to escrow off plan deposits may not protect your money

The Federal Government’s plan to introduce regulated escrow accounts for off-plan housing transactions has been described as a step towards improving buyer protection in Nigeria’s real estate sector, but industry stakeholders say the measure will need stronger project monitoring mechanisms to achieve its intended purpose.

Under the proposed housing sector reforms, the government plans to require developers to use regulated escrow arrangements to protect buyers’ funds, alongside mandatory developer licensing, construction quality assurance and other measures aimed at improving transparency and accountability in the property market.

However, experts who spoke with Nairametrics said escrow should not be limited to controlling where buyers’ money is kept, arguing that the framework must also track how funds are deployed, verify construction milestones and ensure developers deliver projects as promised.

Their views form part of a broader assessment of the Federal Government’s proposed National Housing and Built Environment Regulation Policy, which seeks to address longstanding concerns around developer accountability, buyer protection and confidence in Nigeria’s housing market.

What they are saying

Festus Adebayo, Executive Director of the Housing Development Advocacy Group, described the proposal as a timely intervention that could address many of the regulatory failures that have weakened confidence in Nigeria’s real estate sector, provided it is backed by effective implementation and strong institutions.

• “While developer licensing and the introduction of escrow accounts are important reforms, they are only the beginning,” he told Nairametrics.
• “These solutions, as I see them, are not the best solutions to the core challenges of property investors and people buying property off-plan,” said Oluwakemi Adeyemo, Chief Executive Officer of Futureperfect Limited, a real estate advisory and marketing company.
• “This is very feasible and in the right direction for development in the real estate sector,” said Eniola Ayomiotan Olukoya, Chief Executive Officer of Aout-18 Technologies Ltd. and a GovTech software development contractor.
• “Escrow addresses where the money sits. It does not address what the money builds,” said Olufemi Adeleke, Founder of Murals Nigeria Limited.

Together, their views suggest broad support for the government’s direction while highlighting concerns that the reforms must go beyond financial safeguards to address wider structural issues in the property market.

What the Federal Government is proposing

The proposed reforms were announced by the Minister of Housing and Urban Development, Engr. Muttaqha Rabe Darma, during the BusinessDay Abuja Real Estate Conference 2026.

• The Ministry is developing a National Housing and Built Environment Regulation Policy that will introduce mandatory developer licensing, regulated escrow protection for buyers’ funds, construction quality assurance, professional registration and a National Housing Industry Data Observatory to improve transparency and accountability.
• The framework is expected to prevent unlicensed developers from marketing or selling off-plan properties without the necessary approvals while ensuring buyers’ funds are protected through regulated escrow arrangements.
• The government also plans to expand mortgage access through the Federal Mortgage Bank of Nigeria (FMBN), including raising the mortgage ceiling to N85 million, facilitating at least 2,000 mortgages annually, allowing National Housing Fund contributors to use up to 25% of their Retirement Savings Accounts as housing equity, introducing a National Rent Registry and strengthening tenancy regulations.
• The ministry is also pursuing land administration reforms through the Land4Growth initiative and the electronic Certificate of Occupancy programme.

However, while the minister outlined the broad policy direction, the government has yet to publish a draft of the proposed regulatory framework or explain how key measures such as developer licensing, escrow administration, compliance requirements, institutional oversight and enforcement will operate in practice. Those details are expected to emerge as stakeholder consultations progress.

Beyond licensing and escrow

The government’s proposal has renewed calls for stronger oversight of Nigeria’s real estate sector, but experts say restoring confidence in the market will require more than licensing developers and introducing regulated escrow accounts.

• Adebayo said consumer protection should become a central pillar of the reforms through mandatory registration of every housing project before it is marketed or sold, with verification of land titles, planning approvals, environmental clearances and developers’ financial capacity.
• He also identified land administration as one of the sector’s biggest structural challenges, arguing that greater transparency in land allocation, simplified title registration and easier access to land for credible developers would reduce fraud and encourage investment.
• Adeyemo questioned whether escrow arrangements address the biggest risks facing homebuyers, arguing that many investor losses stem from inadequate due diligence rather than the absence of financial safeguards.
• She urged the government to prioritize stronger enforcement of existing regulations while encouraging buyers to continue engaging lawyers, surveyors and other professionals before committing funds.

Taken together, these perspectives suggest that while the proposed reforms could strengthen oversight of Nigeria’s housing sector, their success will ultimately depend on effective implementation, stronger institutions and consistent enforcement.

More insights

Beyond regulation, the experts also identified practical measures they believe could improve transparency, strengthen investor protection and make the proposed reforms more effective if implemented.

• Adebayo called for an independent real estate regulator to oversee compliance, investigate complaints, sanction erring operators, speed up dispute resolution and establish a National Real Estate Information System to help buyers verify developers, projects and property titles.
• Olukoya proposed integrating developer licensing, document verification, project monitoring and escrow services into a single digital platform, with milestone-based fund disbursements tied to independently verified construction progress.
• He also recommended assigning every property a unique identification number and every listing a unique reference number to reduce multiple sales, improve traceability and enable buyers to monitor project progress in real time.
• Adeyemo suggested requiring strategic CCTV coverage at development sites to improve transparency, while Adeleke argued that site-readiness documentation, milestone-based verification and independent delivery oversight are necessary to ensure escrow protects not only buyers’ funds but also project outcomes.

Collectively, the experts argue that technology should not simply digitize payments or regulatory processes. Instead, it should improve transparency throughout the property development lifecycle—from project approvals and financing to construction monitoring and final delivery—giving buyers greater confidence in the homes they invest in.

What you should know

A previous Nairametrics investigation documented recurring complaints from homebuyers over delayed land allocations, shifting delivery timelines and changing terms in some off-plan housing projects.

• Some buyers reported waiting months after completing payments before receiving land allocations.
• Others said they were asked to make additional financial contributions as construction costs increased during project execution.
• The investigation found that many of these challenges were driven by weak regulation, financing constraints, title disputes, overselling of land and poor project planning, rather than a single cause.
• Some developers told Nairametrics they have since adopted more sustainable financing models, commenced construction before marketing projects and introduced more realistic delivery timelines to reduce delays and improve buyer confidence.

The findings provide important context for the Federal Government’s proposed reforms, highlighting the longstanding issues they are intended to address while showing that some developers have already begun changing their business practices to improve buyer confidence.