The Implications of Regulating Lagos Real Estate Agency

The Implications of Regulating Lagos Real Estate Agency
Tekedia Audio

In Nigeria, Lagos is the only state that has country status. It attains this because of its primary roles in advancing Nigerian economy and West Africa region. For the past 50 years, the state has remained the gateway to other states in Nigeria and countries in Africa. These constitute significant reasons for having different policies and initiatives from the public and private sectors, aiming at deepening socioeconomic and political development in all ramifications.

In terms of population, the state has been projected to grow to 88 million and becomes the world’s largest city, according to the University of Toronto’s Global Cities Institute. Like other mega cities in the world, housing has been one of the main problems in Lagos metropolitan areas, especially on the Island and Mainland. Before the administration of Mr Babajide Sanwo-Olu, previous administrations initiated policies and provided enabling environment for the players in the real estate market towards the provision of adequate houses for the residents.

One of the actions is the promulgation of the law that established Lagos Estate Agency Regulatory Authority. Part of the responsibilities of the agency is to manage real estate transactions, prepares rules and regulations for the practice of estate agency in the state. “The authority will also maintain a register of estate agents, sanction unlicensed estate agency practitioners, collate data on property transactions, investigate complaints and petitions against licensed practitioners as well as ensure the payment of fees, taxes or charges on property transactions.”

According to Lagos State Real Estate Transaction Department of the regulatory authority, “any developer that wants to practice the business of estate agency must obtain a license from the authority and has powers to monitor completed or uncompleted structures as well as recommendations for the revocation of subsisting right of occupancy on the property that failed to comply with notices.”

After the establishment of the regulatory authority, the state government announced registration of 50,000 real estate agents and property developers with the Corporate Affairs Commission as operators in the Lagos real estate market. Despite the significant number of the operators, the recent actions of the state government on the enforcement of the established rules and regulations towards more registrations seems not to augur well with the players. Since December, 2019, the state government, through the agency and government officials, has been informing the stakeholders the significance of registering operators. The call was renewed recently and attracted mixed reactions from the stakeholders, most importantly, the estate surveyors.

In our experience, through the monitoring and analysis of real time data on the call, we understand that 1% of public interest in real estate increases the need to know the importance of regulation in the sector by 11.48%. We equally discovered that 1% interest in real estate, between March 10 and March 17, 2020, increases public consideration of regulatory agency in the sector by 8.28%.

Who Gains? Who Losses?

Like other sectors in Nigeria, real estate sector is also with a number of groups and associations, working towards positive development in the sector. These groups and associations have over the years chide governments and regulatory agencies on perceived loathsome policies or laws. While the Society for Professional Valuation supports the state government decision on the establishment of a regulatory agency, the Nigerian Institution of Estate Surveyors and Valuers (NIESV) and regulatory body – Estate Surveyors Registration Board of Nigeria (ESVARBON) kicked over the registration of its practitioners.  SPV believes it is necessary to regulate the practice of estate agency and development. To NIESV and ESVARBON, regulating and registering its practitioners means violations to the professional rights.

Meanwhile, evidence has shown that the sector needs regulation. This according to researchers would benefit every stakeholder and ensure that the sector is free of quacks, who are destroying the image of registered practitioners including significant reduction in rental values. For instance, analysis of quacks activities by Infoprations indicates that between October and December, 2018, 77 house seekers in Lagos were defrauded of N23.1 million. On Average, a house seeker paid N330, 000 to dubious estate agents. Analysis shows that house seekers in the Mainland area of the state were duped between N100, 000 and N500, 000, while those in the Island area paid above N800, 000.

 

Advertisements

Share this post

Post Comment