Once again, fraudsters are on the prowl exploiting the desperation of prospective homeowners and tenants to have roofs over their heads and secure cheaper accommodations to defraud them.
With the huge housing gap, about 22 million and the rising cost of rental accommodation, there has been an upswing in the fraud schemes. The coming of online platforms and money transfers in the banking sector has increased the risks.
The social media has also been badly hit, as different groups and websites have been created to fleece members, including using multi-level marketing. In some circumstances, victims have been tricked to pay deposits or money for properties or buy into non-existing estates in major cities.
Scam in real estate transactions occurs in different ways. It could be that someone is pretending to be the vendor and trying to negotiate a sale is not really the owner or a person claiming to be the landlord and trying to let the property is not the verifiable owner.
In another case, the representatives of the vendor or landlord do not have the mandate to carry out the business of selling or leasing as the case maybe. You will get to discover that a transaction is a scam when you seek to know more about the identity of who is selling/letting or the authority of the representatives of the vendor/landlord.
In Nigeria, senior officials of the Economic and Financial Crimes Commission (EFCC) could ascertain the amount lost over a five-year period but believe that the financial loss is huge. Estate surveyors and valuers, as well as Real Estate Developers Association of Nigeria (REDAN), are aware of the danger; proffered solutions consumers can take steps to reduce their exposure to scams.
REDAN President, Alhaji Aliyu Wamakko, told The Guardian that the association members are not involved in such crimes, adding that REDAN has helped in recovering monies paid to some unscrupulous developers.
According to him, the Real Estate (Regulation and Development) Bill, which was passed in November 2021 and was drafted by REDAN, as well as other well-meaning institutions like the Economic and Financial EFCC Intelligence Unit (NFIU), Special Control Unit Against Money Laundering (SCUML), is one of the ways to curb the menace.
Wamakko said the bill, “makes the business of real estate development in Nigeria conform to international best practices and safeguard the ultimate interest of all stakeholders in the business, curb fraudulent practices in the business of real estate development in the country.
An estate surveyor and Managing Partner, Ubosi Eleh and company, Mr. Chudi Ubosi, said the high number is related to the higher number of people, who are seeking accommodation to buy or to lease.
“This is a fallout of the harsh economy, especially as regards residential real estate transactions. There is increased pressure on housing stock and more desperation by prospects to secure affordable properties,” he said.
Ubosi said the way to curb the menace is to encourage prospects to ask relevant questions about the property, agent and everyone involved in the transaction.
“It is also important to ask about a property from neighbours just to be sure there are no issues that have been overlooked. The use of the right professionals tied to a professional body, like the Nigerian Institution of Estate Surveyors and Valuers (NIESV) will be advisable.
“And of course, the long-known mantra – if it sounds too good to be true, it is probably not. Caution is key. Never pay cash for transactions no matter the pressure.”
For Mr. Sam Eboigbe, the immediate past chairman, of Faculty Estate Agency and Marketing, a division of NIESV, “there is a need to embark on due diligence to ascertain the authenticity of the transaction. When buying you have to confirm the ownership and watch out for all relevant title documents.
“When letting or leasing, ensure you are paying to the landlord or to the appointed agent with an official mandate to deal with the transaction. Avoid the pitfall of quick payment and heavily discounted price syndrome. Except in cases of distressed transactions, but such must come with verifiable evidence.”
Ubosi advised government to prosecute as much as possible any one found involved in these practices. “There must be the deterrent factor. Increased titling and documentation of property will make ownership identification easier,” he added.
Eboigbe said the appropriate arm of government should fast track the formulation of policies through enabling laws to regulate the practice and control of estate agencies. “This should be done in collaboration with NIESV, who are the trained professionals with the knowledge and experience to engage stakeholders in the sector at various levels.
“Look for professionals with knowledge and experience in the sector to engage. The professionals to engage are the registered estate surveyors and valuers. They have a way of carrying out due diligence on properties for sale or leasing before making the listings go public and thereafter engaging buyers and prospective tenants,” he advised.
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