How real estate firms, agencies fleece
implementing“By robust verification processes such as leveraging technology for title searches and authentication, we can reduce the likelihood of fraudulent transactions and assure buyers, sellers, and other parties involved.
Fraudulent agents and developers are taking advantage of the desperation displayed by prospective homeowners and tenants to defraud their victims of billions of naira. The largely unregulated nature of the market makes these unsuspecting prospective homeowners fall prey to unscrupulous individuals, and charlatans, VICTOR GBONEGUN reports.
UNITED States- based Nigerian couple, Olubukola and Oluyomibo Olaniyan decided to invest in the property market at home. In early 2022, they subscribed to a threebedroom terrace duplex residential property, owned by a popular real estate development firm at the cost of N56.7 million.
The couple made an initial deposit of N10 million, and a contract was sealed for the sale of the building, while an agreement was sent to them.
Part of the agreement was that a 50 per cent down payment must be made before the commencement of the building, and because of this clause, the couple sourced funds and completed the payment amounting to N26.45 million within the same year.
After the deposit in March 2022, the family requested an update on their property, and a lot of unfulfilled promises were made. At first, the initial completion date, which was nine months from the 50 per cent payment date got shifted to December 2022 and thereafter got moved to June 2023. Later, it was again moved to December 2023.
“Every time we visited the site or any of our representatives, there was no development on the property. On July 7, 2023, we lost hope in the firm’s empty promises, and requested a full refund because of the serial breach of the contract,” the Olaniyans said.
It took the intervention of the Lagos State government and the media before the couple recovered their money, with an eroded value due to the naira’s devaluation.
Peeved by the development, the couple vowed never to invest in the Lagos property market. The Olaniyans are one of the many Nigerians, who have fallen victim to rising fraudulent practices in the real estate sector.
Despite increasing inflation and the soaring costs of building materials, prospective homeowners’ dreams of acquiring roofs over their heads have been dashed severally by property firms as evidenced by the sheer number of uninhabited estates in the nooks and crannies of the state.
Fraudulent acts in the sector are not only committed by charlatans and touts, but some registered professionals are also culpable as reflected in the suspension of a valuer, by the Estate Surveyors and Valuers Registration Board of Nigeria’s Tribunal for swindling one Mrs Oluwaranti Williams N3.5 million for the construction of a building, which he never did.
Williams was forced to report the matter to the regulatory body after several attempts to prevail on the suspect to, either execute the project or refund the money failed.
Over the last decade, there has been a general lack of transparency and trust in the property market, as some operators resort to sharp practices to fleece their compatriots.
Often, the perpetrators of this inglorious activity, several of whom claim to be marketing consultants, or agents with a mandate to sell property worth millions of naira in choice locations, while others specialise in renting out disputed property to as many unsuspecting prospective tenants as possible, while issuing fake receipts, as well as allocation letters.
Among tactics deployed by these scammers include misrepresenting property, locations, or amenities to lure buyers, and advertising non- existent/ already occupied lands, or lands without proper titles.
Beyond these, the criminals also resort to delayed or non- delivery of the property after payment, forging documents to deceive buyers, non- execution of projects according to agreed terms, and advertising non- existent projects to collect money from unsuspecting investors in the name of off- plan sales.
For instance, on Anuoluwapo Street in the Ejigbo area of Lagos State, about 200 house seekers, who paid various sums of money for accommodation were all duped when the landlady of the one- storey building allegedly connived with an agent to perpetrate the fraud. The landlady was said to have directed the prospective tenants
to the agent for payments after they enquired about the building.
Unfortunately, when the victims got to the house, they discovered that the number of tenants outnumbered the available 14 flats. It was gathered that the prospective tenants paid various sums ranging from N300,000 to N500,000.
After the illicit haul, the agent vanished into thin air, and all his phones switched off. The matter was later reported to the police for investigation.
The list of defrauded house seekers in Lagos State also includes 113 in Akoka, who were swindled of over N51 million, 66 in Gbagada, who were defrauded of about N16 million, as well as victims in Alapere and Ajao Estate who paid between N200, 000 and N500, 000 for 20- unit apartments.
Away from Lagos State, the Economic and Financial Crimes Commission ( EFCC) recently arraigned a property developer on a four- count charge that bordered on obtaining money by pretense, forgery, and using false documents in Abuja.
The convict and the property firm were arraigned for fraudulently obtaining the sum of $ 298,000 and N48 million from another property firm under the pretext of being the beneficial owner of Plot1721,Ja hi District, Cadastral Zone. The culprit was eventually tried and sentenced to 24 years in prison.
In Ogun State, more than 30 people have lost millions of naira to fraudulent estate agents in six years. A prominent case was that of one Mr Ikoni, who was subsequently arrested, charged, and sent to jail for defrauding nine accommodation seekers of about N3.9 million.
He collected various sums of money from different people, ranging from N750,000, N500,000, and N490,000 from nine persons totaling N3.9 million, promising to provide them accommodation, which he failed to do. He did not refund their money but converted the fund to personal use.
Down South, specifically in Rivers State, the story is not different as property scams have grossed close to N100 million in the last two and half years. One major case was an attempt to swindle a victim of the sum of N25.4m proceeds of property sale, and N16,200 m in an attempted sale of land belonging to another person by an estate agent.
A 2020 report by the Civil Society Legislative Advocacy Centre ( CISLAC), an affiliate of Transparency International ( TI) listed cities such as Abuja, Lagos, and Port Harcourt, as locations where high- level capital flights take place, adding that the real estate sector has long provided opportunities for persons and companies to launder illegally acquired funds.
Apart from the EFCC, the Independent Corrupt Practices and Other Related Offences Commission ( ICPC) is also handling several property- related scams. Checks revealed that there are close to 1,000 such cases pending with the EFCC.
The ICPC recently revealed that it recovered about N53 billion from one of such developers, who took money from housing subscribers without providing the residential houses promised.
Worried by the rising spate of property scams, the Lagos authorities established the State’s Real Estate Regulatory Authority ( LASRERA). The law setting up the outfit was swift due to reported/ increasing cases of fraud in the sector, and the compelling need to put an end to the fraudulent and unscrupulous practices.
The Special Adviser to Lagos State Governor on Housing, Barakat Odunuga- Bakare, said: “We have received over 1,577 petitions from the inception of the agency in 2020 till date, and we have been able to resolve 1,027, and we have eight cases in court concerning real estate fraud.
Odunuga- Bakare, who doubles as the Head of LASRERA expressed worries that the sector is polluted with bad eggs and stressed the need for brokers, developers, agents, and realtors to register with authorities to sanitise the real estate sector.
She said the agency intervened in the alleged N40 million- land scam involving one Mr Kayode Oladipo, and a real estate firm, Revolutionplus Limited. The outcome of the whole issue, she noted, exemplifies the government’s commitment to transparency and zero tolerance for fraudulent activities.
A recurring decimal
HOMEOWNERSHIP is one of the three basic human needs essential for daily survival, and healthy living besides food and clothing.
According to the Association of Housing Corporation of Nigeria ( AHCN), Nigeria earned 25 per cent in homeownership when compared to Kenya’s 75 per cent, South Africa’s 70 per cent and Brazil’s 74 per cent.
Access to affordable housing is beyond the reach of Nigerians as figures also point to over 23 million affordable housing deficits in the country.
To date, the housing situation remains scary in the country as reflected in the arrest of dozens of occupants of an “86- room under bridge apartments, in Dolphin Estate Bridge, lkoyi. The tenants allegedly paid about