Why Operators Violate Real Estate Regulations – TheNigerialawyer

Maduka Nweke, [email protected]^[1]

The regulatory bodies in real estate include but are not
restricted to the following; Estate Surveyors and Valuers
Registration Board of Nigeria(ESVARBON), which is the regulatory
body for controlling and setting standards for real estate and
valuation practice. The profession came into limelight when in
1969, a group of qualified chartered (General Practice) surveyors
formed what is known as the Nigeria Institution of Estate Surveyors
and Valuers (NIESV), as a non-profit voluntary professional
organisation to cater for the interests of the real estate
profession in the country.

But despite these encouraging figures and trends, the Nigeria
real estate industry is still burdened by several issues that are
hindering its growth and these issues have not been addressed to
give boost to the sector. According to the World Bank’s ease of
doing business report for 2013, Nigeria is among the worst
globally, when it comes to registering property. It ranks 182 out
of 185. The process of registration of property can last as long as
six months to two years, taking an average of 12 procedures, and
costing about 20.8 per cent of the value of the property. The
lackadaisical attitude to work is the major cause of undue delay at
the land registry. Oftentimes, a developer’s application would pass
from office to office over several weeks and by the time the
necessary approval is obtained, he may have lost his source of
funding or incurred huge interest on loan obtained for development.
Hopefully, the new comprehensive Second Lagos State Development
Plan (LSDP), adopted in 2013, aims to streamline the regulatory
environment and improve incentives for private investment and
business; for example, land registration initiatives, the creation
of GIS maps and the piloting of an e-approval system for
development permit. Building a house in Nigeria is not only
frightening, it is also very expensive. A three-bedroom house, for
example, will cost about US$50,000, compared to US$36,000 in South
Africa and US$26,000 in India. The cost of construction is high for
three reasons: high costs of building materials, high skilled
labour costs, and costs associated with poor roads and sewage
systems.

Experts have posited that about 75 per cent of houses in
Nigeria’s urban areas are built with concrete. Cement prices in
Nigeria are about 30-40 per cent higher than in neighbouring
countries and world market prices. The lack of public
infrastructure adds as much as 30 per cent to the total costs of
the development. Nigeria has been fortunate not to experience
natural disasters such as earthquakes, tsunami, or tornadoes. Yet,
despite the absence of disasters, the incidences of building
collapse continues to rise because many of the buildings are not
done by competent professionals . Since we don’t have natural
disasters to bring down our buildings, we simply created our own
through negligence. Privately owned buildings both commercial and
residential account for the highest number of collapsed buildings
in Nigeria. From 2010 to 2016, a total of 3,1222 persons have died
as a result of over 137 building collapse. This figure does not
usually include those who die long afterwards as a result of
injuries sustained and are usually not accounted for.

The Lagos State Property Protection Law of 2016 has been there
but it seems the aim of that law is not achieved because the menace
for which the law was promulgated in the first place has continued
to stare us on the face. This law ought to be a statutory response
to the menace of the omo-onile (land grabbers) in Lagos State. It
majorly prohibits four conducts in relation to land in Lagos State:
(i) forceful entry to landed properties; (ii) illegal occupation of
landed properties; (iii) violent in relation to landed properties;
and (iv) fraudulent conducts in relation to landed properties. But
today, land grabbers have continued to exploit citizens. Some parts
of the law have retrospective effects. For example, people that
have forcefully obtained the land of other people had only three
(3) months grace from the commencement of the law to vacate the
land, otherwise they will be deemed to have committed an offence
punishable by ten (10) years imprisonment.

Bribery and corruption have a negative effect on the Nigerian
real estate sector. This has had a far-reaching effect on anything
done in Nigeria. There are instances where developers who have not
satisfied the preconditions for allocation of land are granted
allocation while those who are qualified are denied. Real estate
investors are subjected to multiple taxations, the taxes and levies
paid by them include development levy, income tax, building plan
approval levy, property tax, land use tax, and we also have cases
whereby real estate investors are expected to pay renovation tax
whenever they want to renovate their properties. The exchange rate
in the country and ban on importation and exportation of anything
through the land boarders is also a big problem because not
everybody can afford importation through air or sea. This generated
increase in cost of doing business and living. As a result of the
high costs of doing business, property developers to remain
profitable will have to pass on these additional costs incurred to
the market. According to industry experts, the estimated rise in
the costs of housing is 25 per cent – 35 per cent.

You The Urban and Regional Planning and Development Law of Lagos
2010 has been there but has also become a toothless bulldog. It has
been seen by some people to be subjective in action and this has
discouraged a lot of people who had wanted to access the provisions
of the law for redress. This law should provide for the
administration of physical planning, urban development, urban
regeneration and building control in Lagos state and for all
connected purposes. Failure to obtain requisite permit before
development or failure to comply with approved standard may lead to
issuance of (i) Contravention Notice; (ii) Stop Work Order; (iii)
Quit Notice; (iv) Seal-up Notice; (v) Regularisation Notice; and
(vi) Demolition Notice.

The law also has criminal sanctions which may be payment of
fines of up to N500,000 or one month community services, or both.
The law has been relaxed because a lot of people build without
recourse to stated designs yet authorities will see it and keep
quiet. But ordinarily, it should assign the overall administration
and responsibilities of planning and development in Lagos State in
the hands of Lagos State Ministry of Urban and Regional Planning.
These administration and responsibilities are to be carried out
through three agencies in the Ministry: (i) Lagos State Planning
Permit Authority (PPA); (ii) Lagos State Building Control Agency
(BCA); and (iii) Lagos State Urban Renewal Agency (URA).