By Maduka Nweke, [email protected]
Nigerian professional real estate practitioners have expressed concern over the lax regulatory framework of the sector whose supervision is often open to the public. According to them, the regulation of the sector has been bastardised going by what the public sees as poor regime of for breaches of standard operating procedures.
This prompted the recent call by Real Estate professionals in the country to the Federal Government’ for an amendment of the real estate laws and regulations as a way of mitigating the economic hardship in the country.
The professionals are worried that due to the high handedness regulations that are not streamlined, the real estate professionals have left the sector for quacks who now manipulate the process to get what they want without regards to rudiments.
In his assessment of the development, Mr. Chinweike Nduforo, a property developer, said that poor regulation has permitted every institution to do whatever they call regulation to target perceived enemies.
He said that if there were standard rules, the implementation of the Land Use Act would have been modified or amended. He noted that the land use act does not favour operators hence the monopoly of the sector by quacks while the real professionals who spent donkey years to acquire knowledge and know how now feel shortchanged.
“The laws regulating real estate in Nigeria can be classified into federal based laws and state-based laws. At the federal level are laws that govern the country as a whole. There are also regional laws guiding some sections of the country. But in all, the rules are not obeyed by practitioners,” he stated.
According to him, some of the federal and regional laws which could be discussed for the purpose of amendment included but not limited to; “the 1999 Constitution of the Federal Republic of Nigeria: Section 43 of the 1999 Constitution which provides as follows “Subject to the provisions of this Constitution, every citizen of Nigeria shall have the right to acquire and own immovable property anywhere in Nigeria.” Pursuant to this provision, the right of every Nigeria, either individual or cooperation is guaranteed.
Only recently, the Nigerian Senate passed a bill for the establishment of the Real Estate Regulatory Council of Nigeria. The move by the upper legislative chamber was to among others, help curb the fraudulent practices in the real estate business and ensure that it conforms with the National Building Code in the country. The bill tagged, ‘Real Estate Regulatory Council of Nigeria (Establishment) Bill, 2021 and sponsored by Senator Aliyu Wamakko, was passed following the consideration of a report by the Senate Committee on Establishment and Public Service during plenary session. The report was presented by Senator Nicholas Tofowomo on behalf of the Chairman of the Committee, Senator Ibrahim Shekarau.
The bill that was just passed was read for the first time on April 28 and scaled a second reading on June 22. The real estate sector has been bedeviled with challenges and has not been adequately regulated in Nigeria, thereby creating room for unscrupulous and corrupt developers who defraud home owners to pay without being given services. There had been several reported cases of homeowners who could not gain ownership of the properties years after paying millions for these houses. Such practices have been reported to be common in Abuja and Lagos. There is also the problem of the low quality of houses being built by these developers and given to the owners. These do quick developers do not consider what the owners feel after spending through their nose to finance such projects. It is hoped that the passage of the bill will help bring some form of sanity to the sector and check the fraudulent and unfair practices of these developers.
The senator presenting the report on behalf of the committee said that the establishment of the Real Estate Council of Nigeria is expected to provide efficient, effective and transparent administration of the business of real estate development in Nigeria. He added that the council will be responsible for prescribing minimum standards for the conduct of the businesses of real estate development across the country. According to him, “The Council when established, would among others, curb fraudulent practices to ensure that the real estate business conforms with the National Building Code in Nigeria.” He recalled that President Muhammadu Buhari, had initially withheld his assent to the bill seeking to establish the council which was passed by the eighth National Assembly due to some certain observations raised by stakeholders at that time.
In his view, Principal Partner, MI Okoro & Associates, Dr. MI Okoro, said that non-regulation of the real estate sector could be due to the unseriousness of the government officials and their don’t care attitude’ to public policy.
“For one, we started with poor funding. Because there is no incentive for operators as it was not well funded, most government officials are not so keen on regulating that sector that is poorly funded. But if they feel that there is something to benefit, you will see them making sure that everything works.
“So it is like that big elephant that is worthless, not producing anything and the owner just forgets anything about it. And even when they have some officials to police or take care of, that official will go and behave anyhow because they know that the people at the top are not interested to police them and met out punishment on them when they default. So that is why things are the way they are. Until there is right attitude and government takes everything serious, then, built environment will not be better. My reservation is that government is not serious in tackling these problems.
“If you have ever bought or sold real estate, you have undoubtedly employed the services of a real estate agent to guide and assist you through the process. Consumers are often uncertain who regulates real estate professionals and that is why we usually have bottlenecks. When considering a workable society, all real estate professionals are subject to two sets of rules.
“First, each jurisdiction has a governmental agency, typically referred to as the real estate commission, charged with the authority to issue licenses to real estate professionals and enforce related state regulatory laws. Additionally, many real estate professionals, after obtaining a license, choose to become members of a realtor association, whose mission is to promote the profitability and success of its members. Those licensees agree to abide by a strict Code of Ethics, and the local realtor association is responsible for assuring that members adhere to the Code.
“Each jurisdiction has a real estate commission whose mission is to protect the public from unqualified real estate practitioners. As such, the real estate commission has the authority to implement and enforce real estate licensing laws. In keeping with this authority, the real estate commission serves various important functions, including; authority to issue a license and monitor real estate activities; establish requirements for maintenance of a real estate license such as continuing education; conduct investigations into alleged violations of jurisdiction licensing laws and regulations based on complaints filed by the public or on the real estate commission’s own motion and perform routine audits of trust accounts. Enforce licensing laws and take disciplinary action against licensees who have been found in violation, including revoking their ability to practice licensed real estate activities in a respective jurisdictions. Members of the public who suspect a real estate licensee has violated the licensing laws can direct their complaint to the real estate commission of the respective jurisdiction, which will then review the allegations and determine what action, if any, is appropriate for the offense,” he said.