LASG moves to Radically Change Real Estate Practice in the State
Agents/Developers to be registered and fees to be regulated
AStateBill that would radically change how real estate is being practiced in Lagos is before the State House of Assembly.
The Bill titled ‘Lagos State Real Estate Regulatory Authority’ would ensure that any person or organisation practicing real estate, property developers must be qualified, registered after payment of fees and issued a permit before operation. It empowers an Authority that would be a corporate body with perpetual succession and a common seal; it can sue or be sued in its corporate name; acquire, hold and dispose of any property or interest in property, movable or immovable for the purposes of carrying out its functions under this Law.
Registration
Any stakeholder dealing in the Real Estate Sector as a property developer, facility manager, or property Management Company, whether as an individual or an organisation, shall register with the Authority, specifying any project it is undertaking as at the time of registration, before it can be issued the necessary Permit to engage in Real Estate transactions in the State.
Issuance and Duration of Permits
According to the Bill, person or organisation dealing in Real Estate in Lagos State who has qualified for registration shall pay a fee as prescribed by the Authority for the issuance of a Permit. The Authority shall issue different categories of permits based on the classification of the applicants, whether individual or corporate.
Validity of Permit
A permit shall continue to be valid until the Permit is revoked by the Authority; or lapses, or holder voluntarily surrenders the permit; or the Permit is declared invalid or revoked by a court of competent jurisdiction.
A permit lapses where the holder of the Permit dies or becomes incapable of performing his functions; the holder is declared bankrupt; or goes into liquidation in the case of a company.
It also stipulates that all Permits shall be valid for a period of one (1) year and may be renewed on the satisfactory performance of the conditions for their renewal as stated in this Law.
Renewal of a Permit
Where a permit has been issued, the holder of the permit may, before its expiration apply for a renewal subject to the fulfilment of the terms prescribed under the grant of the previous permit and on payment of the renewal fee.
Operational standard for holders of Permit
The following are operational standards to be maintained by holders of permits in the course of Real Estate transactions in the State: (1)a registered person or organisation where the context applies shall―
(a) register the broker working under
him with the Authority;
(b) ensure the building or structure is fit for habitation and register the Certificate of Completion issued by the Lagos State Building Control Agency (in the case of a Property Developer);
© not represent two (2) principals on the same transaction in the case of an agency;
(d) be paid fees by his principal only; (e) not collect money from more
than one prospective client in respect of the same premises or building and shall remit money collected to the landlord in the case of a tenancy, within Fourteen (14) days, unless otherwise directed in writing by the landlord and such money collected shall be receipted;
(f) ensure that the prospective client takes physical possession of the property paid for within ten (10) working days in the case of a tenancy; building, structure and units of houses immediately after conditions relating to possession in the agreement or terms of contract are met in the case of a Property Developer;
(g) declare his interest to the client where he is personally interested in any property, which is the subject of any transaction;
(h) ensure that clients perform all
obligations to the Government
under the existing laws, such as the deduction and remittance of Withholding Tax, Value Added Tax or other charges payable on the property he handles;
(i) not prepare any legal document pertaining to any transaction in real estate but every Tenancy Agreement or Contract Document shall be prepared by a Legal Practitioner with the Legal Practitioner’s seal affixed and his charges subject to the Legal Practitioners’ scale of fees;
(j) obtain the consent of the principal before collecting money from a prospective client in the case of an agency;
(k) refund the rent or money paid by
any prospective client in case of failure to deliver up physical possession of the premises within Fourteen (14) days of collection of rent in the case of a tenancy, or fulfilment of all conditions relating to possession in the agreement or contract in the case of the Property Developer, and any delay in refunding beyond the stipulated time shall attract interest at the prevailing bank rate.
Committee of Inquiry
The Bill however, made provision for establishment of a Committee of Inquiry which will be charged with hearing and reports of misconduct, complaints or petitions from the public against organisations dealing in real estate. It states that; i. There is established by the Authority, a Committee of Inquiry (referred to in this Law as “the Committee”) which shall consist of Five (5) members who shall be appointed by the Board. ii. The Committee shall be presided over by a member of the Board and at least two (2) other members who shall be legal practitioners. iii. The Committee shall be charged
with the duty of hearing and determining reports of misconduct, complaints or petitions from the public against persons or organisations dealing in Real Estate in the State. iv. The Committee shall after considering the report by the public, invite in writing, the concerned person or organisation dealing in Real Estate to make oral or written representation within two (2) weeks of receipt of the notice of the complaint and may invite any other person to make representation pertaining to the matter before it. v. Where a person or organisation
dealing in Real Estate is found wanting, the Committee shall have the option of either recommending suspension or revocation of his permit to the Board. vi. The Authority shall not later than
one (1) month after conclusion of the hearing, serve the affected parties with the final decision of the Board in which the reasons for the decision must be stated.
Offences and Penalties
An individual or an organisation dealing in Real Estate in the State that—
(a) fails to register in accordance with the provisions of this Law shall commits an offence and is liable on conviction to a fine of not less than Two Hundred and Fifty Thousand Naira (N250,000.00) in the case of an individual and not less than One Million Naira (N1,000,000.00) in the case of an organisation;
(b) fails to comply with Section 20 (3) of this Law shall be guilty of an offence and on conviction be liable to the revocation of the Permit; © contravenes or fails to comply with any other provision of this Law commits an offence and shall be liable on conviction to—
(i) the revocation of his Permit or a fine of not less than One Hundred Thousand Naira (N100,000.00) and a fine of not less than Twenty Five Thousand Naira (N25,000.00) for each day of non-compliance in the case of a registered individual; (ii) a fine of not less than One Hundred Thousand Naira (N100,000.00) and a fine of not less than Twenty Five Thousand Naira (N25,000.00) for each day of non-compliance in the case of an unregistered Individual;
(iii) the revocation of its Permit or a fine of not less than Five Hundred Thousand Naira (N500,000.00) and a fine of not less than Fifty Thousand Naira (N50,000.00) for each day of non-compliance in the case of a registered organisation; and
(iv) A fine of not less than Five Hundred Thousand Naira (N500,000.00) and a fine of not less than Fifty Thousand Naira (N50,000.00) for each day of non-compliance in the case of an unregistered organisation. Go to our website www.castles.com.ng to read the full details of the bill.