ESTATE AGENCY PRACTICE IN NIGERIA: THE NEED FOR STATUTORY REGULATION

Estate agency practice in the Nigerian context involves carrying out business-like activities in the sales, acquisition and leasing of various classes of land and landed properties by “an estate agent” based on the instructions of “the client”, in consideration for monetary compensation – usually a percentage of the value - known as a “commission”

The person that carries out any act of estate agency activities is referred to as an estate agent while the person whom such act is carried out on his/her behalf is known as the client.

Estate agency practice in Nigeria like other countries of the world contributes massively to housing delivery system as it helps to meet as well as cater for the housing/accommodation needs of people. 

Due to the important roles estate agents play in the housing and accommodation delivery sector of the economy, so many people have become victims of accommodation fraud from the hands of some of these estate agents who go about duping genuine accommodation seekers.

Just of recent (November 18, 2013), there was a wide-spread report of an estate agent been jailed by a Lagos state High Court for 15years imprisonment because of defrauding 100 accommodation seekers on a particular property which was actually leased to him. The said estate agent collected large sums of money from 100 people in order to help them get accommodation on a property which he was actually not given any instruction to do or act likewise by the property owner as he was a tenant.

This is just one of the many numerous and un-accounted cases of accommodation seekers that have been defrauded by some of these people who parade themselves as estate agents in the country. 

The activities of some of these estate agent fraudsters have led to negative perceptions from people about those genuine estate agency practitioners and professionals in the country. 

As a matter of fact, the poor public perception and image of professional Estate Agents and in effect the profession of Estate Surveying and Valuation, is as a result of the activities and incursion of non professionals into the practice of Estate Agency.

Hence the urgent need for a regulatory statute to guide the activities of estate agency in Nigeria and protection of accommodation seekers.

In order to tackle and checkmate the activities of estate agency fraudsters as well as estate agency activities in the state, the Lagos state government in November, 2012 established a regulatory agency known as Lagos State Real Estate Transaction Department (LASRETRAD) in the Ministry of Housing to regulate and restore confidence in the activities of Estate Agents in the State.

Among the responsibilities of the agency are to: 

·         Sensitize the public about estate agency and attendant rules, risks and benefits

·         Keep a register of qualified Estate Agency Practitioners who voluntarily register with the Department

·         Ensure protection of citizens from illegal trade practices

·         Prosecute estate agents suspected of having violated the applicable laws

Most importantly, to ensure that estate agency practice is no longer an all-comers’ affair as been generally believed it to be, the Lagos State Government went further in introducing a code of conduct for practitioners, which specifies the rule of practice, and punishment for defaulters.

The document mandates that a registered agent transacting business must have operational business premises or office within the state that will be verified ; maintain a record of his or her business transactions and shall open a separate bank account for that purpose; ensure that a prospective tenant or purchaser takes physical possession of the property paid for within 14 days except otherwise stated in writing and that his principal performs all necessary obligations due to the government under applicable legislation and regulation.

On its own part, the Nigerian Institution of Estate Surveyors and Valuers (NIESV) which is the statutorily established professional body responsible for Estate Surveying and Valuation practice/activities in the country has also formed an association known as Association of Estate Agents in Nigeria (AEAN) for all those people (professionals and non-professionals) practicing estate agency activities in the country. 

The association was purposely set up to in order to streamline activities of estate agents and checks the activities of non-professionals in estate agency practice. 

It was officially launched on October 22, 2013 at Lagos Airport Hotel, Ikeja, Lagos state, with the Director General of Standards Organisation of Nigeria (SON), Dr Ikem Joseph Odumodu as the special guest of honour.

Among the goals of the association are to: 

·         Sanitize the real estate sector of the Nigerian economy

·         Develop the Estate Agency into a respectable professional practice in Nigeria

·         Maintain a database of Estate Agents in Nigeria

·         Train and re-train Estate Agency Personnel

·         Ensure a high standard of professional ethics by members

·         Reduce to barest minimum, incidents of fraud in property transactions

·         Cooperate with governments and government agencies. 

The newly formed association will be working together with the Nigerian Institution of Estate Surveyors and Valuers (NIESV) as well as partner with the Lagos state government and Federal government to develop a template for regulation of estate agency practice in the state and Nigeria as a whole.

 

While the Lagos state government has established an agency to regulate and monitor the activities of estate agents and agency practice in the state, the Nigerian Institution of Estate Surveyors and Valuers (NIESV) on its own part has set up a dependent association (Association of Estate Agents in Nigeria) in terms of provision of training and study materials for all those people carrying out estate agency activities as well as those wanting to become estate agents in the way and manner to be successful in the operation and practice of estate agency in the country.

The categories as specifically highlighted by the Nigerian Institution of Estate Surveyors and Valuers (NIESV) for membership into the Association of Estate Agents in Nigeria (AEAN) are: 

·         Certified Estate Agents (CEA) made up of professional Estate Surveyors and Valuers;

·         Registered Agents made up of professionals from other fields

·         Estate Brokers for people with minimum qualification of secondary school certificate.

CEA are strictly reserved for members of the NIESV, while other practicing agents and professionals can become members under any of other categories.

The Association of Estate Agents in Nigeria (AEAN) through its parental association; The Nigerian Institution of Estate Surveyors and Valuers (NIESV) is working towards setting parameters for training, minimum qualification requirements and ultimately present a bill to the National Assembly for government’s recognition and charter for the association.

When estate agency practice is statutorily recognized and established in Nigeria, it will go a long way in helping to curb the activities of accommodation frauds which people have been subjected to. 

The association well duly backed by a government statute will help guide the activities of those practicing estate agency services in the country as they will be statutorily mandated to work and carry out their estate agency services based on the rules and regulations as stipulated by the government

In the words of Ed Hatch: “In many places in the United States, you have to be licensed to sell houses. The National Association of Realtors oversees the behaviour of all estate agents. So, there is a code of ethics. When someone does something that is a bit shady, he risks losing his license.

If you are a client and you have a relationship with a licensed agent, you will understand that there is a legal responsibility to that relationship which the client cannot share with more than one person. As soon as this country creates the expectation that estate agents need to be licensed, as soon as that happens, it becomes a legal issue, and you have got the law involved.

Once the practice becomes sophisticated, it needs more oversight and when you create the oversight, you also have to create the licensure and the licensee and also the law; and when the law is involved, the problems in the practice will go away”

ABOUT ME

I am a Higher National Diploma (HND) holder of Estate Management from the prestigious Yaba College of Technology, Yaba, Lagos state, Nigeria. I also possess a Professional Practice Certificate in Estate Surveying and Valuation from the Nigerian Institution of Estate Surveyors and Valuers (NIESV).

I am the principal consultant of Aakient Consultants Ltd, a highly progressive and consolidated property and construction project management company, which is committed to providing the highest level of professionalism and services in meeting clients’ real estate needs.

Feel free to contact me at: aakientconsultants@gmail.com