Quality Assurance, Referrals & Claims: Cores of Real Estate.

Quality Assurance is carried out by designated professionals who look up buildings and tape corners requiring some fixing. This level of transparency is lacking in Nigeria for reasons that is beyond the Real Estate sector. Because of the bureaucratic process which makes the property development journey quite unpredictable, players are often forced to introduce things which undermines trust. The sure implication of this is that there is less transparency and situation arises where the book facts varies from the reality on ground.

The Norm of Real Estate in Nigeria

Normally the buyers try to find out the quality aspects of any project through their recent internet browsing histories, the Builder’s past projects, and also through the referrals which throw some light about the quality of any project. The buyers do the research, and the realtor, developer or the agent is never provided with real clue than the old, “have integrity” as if integrity in itself has its own publicity machinery or the capacity to make the word get to the right hears. We are often made to believe words go round, but those who do never get to tell us how fastly? Real Estate in Nigeria is treated as though it is operating in the optimum, while it is not. My proposition is that the sector could do much better when those elements that expedites the decision making process of investors and buyers are systemized. Yes, the economy can move faster!

This element which I propose should be systemized is the Quality Assurance What perspective should be primary or what has been the overriding interest when we discuss Quality Assurance especially in the Real Estate sector, or such things as claims, or referrals. We are apt to assume it is largely or unequally in the buyers’ interest. While we are not under any illusion the investor, realtor or the agent are the only ones concerned with these cores of the Real Estate, it is important to understand how the dynamics of the society has made these elements as much important to the buyer as it is to the seller, no less to other stakeholders in the chain.

Why is that?

Far more than the need on the part of the realtor to maintain integrity, the speed and frequency of transactions, which determine the value of Real Estate is a causation of what is in place for speedy Quality Assurance, Referrals and how to substantiate claims. What are the efforts put in place to strengthen this all important sector? Several.

Regulatory Bodies in Nigerian Real Estate: Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON), Nigerian Institute of Estate Surveyors and Valuers (NIESV), Real Estate Developers’ Association of Nigeria (REDAN), Lagos State Real Estate Transaction Department LSRETD. LSRETD is an agency created by the Lagos State Government under the jurisdiction of Ministry of Housing for the purpose of regulating the activities of estate agents within the State. The reason is to curb the numerous complaints people make LSRETD is an agency created by the Lagos State Government under the jurisdiction of Ministry of Housing for the purpose of regulating the activities of estate agents within the State. The reason is to curb the numerous complaints people make against estate agents who collect money and disappear without providing accommodation or whatever services they have been paid to render. The agency therefore keeps a register of agents and offers them licenses to show they are certified to practice. People are therefore advised to use these government accredited agents when employing the services of an estate agent.

In 2021, Lagos state governor, Mr. Babajide Sanwo-Olu had approved the change of name of the government department from Lagos Real Estate Transaction Department to Lagos state Real Estate Regulatory Authority (LASRERA). With the introduction of LASRERA to curb the unscrupulous activities of unlicensed real estate practitioners and by sanctioning any real estate practitioners that violate the provision of the guidelines, the real estate sector in Lagos state would experience transparency and credibility.

I invite you to examine this assertion highlighted above, which is, assuming that being unlicensed is why unscrupulous activities is rife, and that trust can be entirely created by licensing practitioners. One thing that is right about the foundational basis for LASRERA, as well as other interventions of its kind is that it recognizes regulation is in the interest, not only of the buyers, but also of the providers of value. If the buyers have to do so much authenticating claims, identifying reliable referrals or ensuring quality, then the entire sector is not optimized to perform even at the level allowed by the economy.

Why is Trust such a big issue in Real Estate?

i. Nigeria’s real estate industry is burdened with the bureaucratic process of land registration, which 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.

ii. 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, and land use tax, and there are also cases where real estate investors are expected to pay renovation tax whenever they want to renovate their properties.

iii. This leads to a situation where information dished out is hardly the reality to be found. The burden of investigating all claims is therefore passed to the buyer who respond to this stress with delay or in case of international players, total avoidance.

The paradox of a changing market: Trust on Apps

When you speak of trust, and making informed decision it is often advised people get on their feet and go see for themselves. There is an interesting paradox though: a generation of people who trusts more in personal brand than corporate brands are on the rise. Even though most property owners don’t have access to mobile devices like smartphones or tablets, we shouldn’t forget that the real estate market is shifting in favor of millennials. Trust therefore looks more like what they can verify smartly even over what they go around to investigate.

Not just the local, this situation undermines foreign deal making too Nigeria market challenges, as deduced in extant literatures, (which reflects African challenges) includes that well-connected business people gain from anticompetitive practices that shield Nigeria from market forces. Also mentioned as a challenge is nontransparent economic decision making, especially in government procurement.  A KPMG report titled Doing Deals in Nigeria which shows key Insights from Deal Makers’, was the result of a survey of 50 senior business executives based abroad, who had attempted at least one inbound acquisition in Nigeria in the last four years. Some critical challenges to deal-making in Nigeria was espoused in this report, one of the key challenges being lack of information/transparency on the target companies (74 per cent). The report also notes the leading practices for successful deals in Nigeria, top of which is the need to engage the right local advisers with the right relationships and understanding of cultural nuances, considering that about 70 per cent of the deals are with privately- owned businesses with bilateral ‘off-market’ negotiations.

Offer by:

tope_litcaf
Profession: