Recession: Best time to purchase land, easiest time to fall for fraudsters

It is no longer news that Nigeria is in recession and based on facts made available by economic experts, the nation may have to grapple with the problem for the next three years, as three years has been adjudged the average lifespan of a recession — if well managed.

But the period of recession has also been ticked as one of the best periods for any investor or would-be land owner to invest in landed properties, either for future business or personal use, as the value of lands generally crashes during this period, as a result of a significant reduction in people’s purchasing power.

However, a warning has gone for any prospective land buyer to be wary of buying land as fraudsters are also on the prowl looking for who they will defraud at this time.

The Lagos State government recently passed a law that seeks to bring to an end the era of land-grabbing mainly perpetrated by omo oniles (those who claim to be the indigenous land owners) and other related nefarious land matters. Findings by Saturday Tribune suggest that this move may have done little in stopping fraudulent omo oniles from masquerading as genuine real estate agents to either sell family lands that are not meant to be sold, or someone else’s land.

Some omo oniles, according to information gathered, even go as far as selling other plots of land that should never be sold such as government land, community land, as well as plots that have been clandestinely marked as gas pipeline zones, among others.

To successfully carry out their nefarious activities, such fraudsters are usually armed with fake documents such as fake survey plans, fake deeds of assignment, fake receipts, even fake Certificates of Occupancy (Cs of O).

Based on investigations, the fraudsters who have been in the ‘business’ of duping land buyers, especially those looking for cheap plots in new sites and locations for a long time, are now capitalising on the drop in value of properties as a result of recession to lure unsuspecting people.

On a number of occasions, land has rightly been described as the ‘crude oil’ of Lagos. This is evident in the way the Lagos State government has steadily grown its revenue from Land Use Charge (LUC) over the years. For instance, LUC was a paltry N250m in 2008, but it ‘magically’ jumped to N2bn in 2009. In 2011, it grew to N3.8bn; 2012 – N6.28bn; 2013 – N7bn, and there are indications that currently, the state government has already hit double digits in its LUC revenue.

The reason for this remarkable growth in the state’s income accruable to land is not farfetched — the population explosion of Lagos, which is estimated at 24million. This has seen a significant rise in the demand for land in places such as Ikorodu, Epe, Ibeju-Lekki, Ajah, and Iba, among others, thus turning them into the hotbeds of land transactions that have yielded positive results. But sadly too, these places have also become the beehives of activities for  fraudsters who will go to any length to hoodwink buyers into parting with their hard-earned money to buy plots that should not be sold.


Avoid dealing with quacks

Generally, the hallmark of any bad business transaction is falling into the hands of quacks or people who are on a mission to defraud others outright. Therefore, so long as one is able to avoid dealing with this category of people, any business transaction, including land transactions, is less likely to go awry. This has always been the cry of experts and professionals in real estate matters, and this was again the message relayed by some professionals Saturday Tribune interacted with in the course of piecing this report together.

In his analysis, Mr Victor Ayeye, the National Secretary of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) insists that in any transaction that has to do with land, all parties, especially buyers, must be ready to exercise a lot of caution. He says they should be ready to investigate, scrutinise and ask salient questions so as to avoid falling into a trap.

This, according to him, is important, not just because land transactions are usually costly, but also because buyers will by so doing be saving themselves of a lot of legal, family, communal and even government problems in the future which might make them lose, not just the land in question, but also whatever investment that might have made thereon.

“Land transactions require a lot of care and caution, not just during a period of recession like we are in now, but always. All land transactions should be done with certified professionals only. There are those certified by the government to help people sell or buy land and this are the estate surveyors and valuers, and these are the people prospective land buyers should patronise. Anything other than this, a buyer risks falling into the hands of fraudsters or quacks who don’t even know what steps to take,” said Mr Ayeye.

He further warns: “Quite often, people, in the bid to avoid paying necessary professional fees which are all approved by the government, opt to patronise those they consider ‘land agents.’ Some have no known offices, while a few who have, scramble in shops and other unwholesome places to operate. If you want to buy land using this method, you stand the risk of falling into the hands of fraudulent people, who will collect your money for nothing, and you will have only yourself to blame.”

Mr Ayeye, who is also the Head of Practice and CEO of Ayeye & Co., noted that before any land is bought, a buyer ought to, among other things, carry out a legal search about the property in question. The legal search, which will eventually yield a search report, he says, is usually issued by the state government, or local governments, or Area Councils (in Abuja). This he notes would help give details about the authenticity and how safe the land is, so as to avoid throwing one’s money away.

“It is only a certified professional that can carry out this very important search, and the whole process does not take more than two days. So there is really no better way to do a successful land transaction without involving real estate surveyors and valuers as we have a functional control mechanism that ensures that all our members remain professional in all their dealings,” said Mr Ayeye, who is also a board member of NIESV.

He, however, stated that should any wrong thing emanate from a land transaction involving a certified professional (this he insists rarely happens), such could be settled and resolved without necessarily going through a legal redress.

Sharing a similar view, another real estate consultant and Principal Partner of Sola Badmus & Co., Chief Sola Badmus, argues that the government knows what it is doing when it, by relevant laws and decrees, authorises a certain group of experts (estate surveyors and valuers) to be the only set of people certified to help buy or sell lands.

“I can assure you that any transaction made through certified professionals in our field has the greatest chance of ending in success. We have our names, integrity and profession to protect, and as such, we will not want to get involved in anything that could make us lose our seals, licences and certification,” he said.

“Let people always endeavour to get the services of professionals in all dealings, not just land transactions. We have nowhere to run to, so we can’t afford to mess up, but quacks can always run away, therefore patronising an unregistered or uncertified real estate professional by a buyer is like being penny wise and pounds foolish, because in the long run, it will backfire,” he noted.

Sharing her own view, an Ikoyi-based facility manager and real estate marketer, Mrs Funke Peter, told Saturday Tribune that if anyone wants to buy land through an agent or even directly through the selling family, he/she should ask for a deed of assignment, which he said would help to trace the ancestry of the land to be bought.

She also stresses the need for a thorough and behind-the-scene kind of investigation before a buyer should pay any money for a plot, especially if the purchase is being made directly from the selling family.

“In real estate, carrying out due diligence about the validity and authenticity of a property is very essential before any amount is paid. This will allow you to avoid falling into a scam or acquiring land that will turn out a liability in the future.

“As a property marketer I have seen numerous cases in which  people fell victims of fake plots or plot with fake documents. There are also cases of lands sold by fraudulent estate agents which were later discovered to be someone else’s land. So it is always good for one to tread carefully and circumspectly,” she said.

She adds that in any situation it is very important that a buyer engages the services of a good property lawyer before embarking on land or property purchase. “The reason for this is not farfetched, your lawyer is the one who ensures that you don’t run into legal trouble with land or property documents after purchase. It is your lawyer’s job to verify the authenticity of any title document that backs the land or property to be bought,” she stated.

Also, the duo of Mr Teriba Kazeem and Chief Abiola Amure, both Lagos-based property consultants, recently raised the alarm over miscreants posing as genuine estate agents, a development they posit might have significantly increased since the beginning of recession in the country.

The duo therefore urged members of the public to be wary and carry out detailed investigations before parting with their hard-earned money in their bid to buy land or houses.

Meanwhile, while working on getting more facts about how to avoid falling into the hands of fraudulent land dealers, Saturday Tribune stumbled on a report which readers might find invaluable in their future land transactions.

The report, available on www.mobofree.com/blog, advises prospective land buyers to endeavour to check the following while buying land anywhere in the country:

– Certificate of Occupancy (C of O)

– Power of Attorney (if one is not buying from the owner)

– Tax Clearance Certificate

– Survey Plan

– Deed of Assignment. A deed of conveyance or assignment traces the history of how the property or land has reached the present owner till date.

“Confirm that the land is not located in an area assigned to be used as business district or industrial estate if your intention is a residential building. If you contravene this law, your property is doomed for demolition,” the report noted.