Getting accommodation in Nigeria is no longer a venture for the faint-hearted; it is now an experience filled with woes as many accommodation seekers not only have to get loans to meet up due to exorbitant charges tagged caution, agreement, legal, damages and agency fees on inflated rents but also have to contend with series of registration fee payments to various agents as well as inspection fees to houses that usually do not fit their specifications. YEJIDE GBENGA-OGUNDARE reports that getting a shelter is gradually going beyond the reach of many Nigerians.
ADEMOLA (surname withheld) was told to leave his apartment in the New Bodija area of Ibadan, the Oyo State capital after he told his landlord that he would not be able to cope with his upwardly reviewed rent. He had hoped that getting another house would be easy since he had decided to go through agents rather than embark on a searching spree by himself. His apartment – in an old building – had cost N400,000 annually before the landlord informed him in January that the rent had been increased to N750,000.
He was shocked that his landlord, whom he believed was humane, could increase rent on a house that had many deficiencies without even considering their cordial relationship. For him, it was time to move but that actually was the beginning of his travail. For five months, he had been taken around series of houses by different agents who usually insist on collecting N5,000 for registration, N2,000 for inspection and the transportation fare to visit vacant houses.
But his countless visits yielded the same unsavoury results; he was taken to houses not fit for a family man at ridiculously high prices and the few he loved were beyond his reach. The houses were so expensive that he couldn’t see how he could sustain yearly payment. In addition, the agency fees on the houses were around half the rent or more in some cases. So, he continued his search until his continuous stay became an issue with his landlord and for his family’s peace he had to borrow money to get a house at N500,000 and also run around to raise N220,000 as agency fee, caution and damages.
And because agency fee or tenancy agreement fee is legally supposed to be 10 per cent of the tenancy rates, he found it difficult to understand the calculation done by various agents, especially as each vacant house has more than one agent marketing it.
“My experience has shown that as long as there are agents, you can’t get cheap houses. It was even more horrendous that each house had three or more agents and they all want to have a cut. This is what makes the cost so high and leads to the demand for two years rent even when the landlord didn’t ask for such. That increases their own pay,” Ademola stated
Getting accommodation has now become a case of the highest spender gets the best house as accommodation seekers, in spite of abundance of houses, have limited choices because of high charges imposed by agents in the name of agents and agreements fees. Agency practice, which is a core and legal unit in the property industry, has now become a source of headache for many people in Nigeria because it remains largely unregulated.
“The truth is that we have a very porous industry. Agency business has become an all comers affair and consequently, you can’t maintain the standard and regulate fees. There are many unregistered agents because of the Nigerian system and so standard practice is missing. I am aware that some just jump on vacant houses pretending to be house seekers. They get information and now go and look for tenants like they are the agents. This inflates the cost because they add their own.
“Also, agents work in a network. That is why when there is a vacancy, the information spreads and you have about four people or more looking for tenants for the same apartment at once. While there is a sharing formula, the person that brings the tenant may have added a particular amount which he won’t reveal to others in order to get more money,” Anthony Ogua, an estate agent, told Saturday Tribune.
For Ademola and many other accommodation seekers in major cities across Nigeria, there is actually no choice because shelter is a basic human need. And now it is a need that is hard to get, turning tenants to pawns in a high financial game orchestrated by agents in cohort with landlords and even lawyers who have added to the burden of the average house seeker.
Mrs Sarah Adeleye, on her part, doesn’t believe in any agent due to terrible past experiences. She said: “It is unfortunate that you can’t get houses without agents because almost all agents are looking for ways to rip off the landlord and the house seeker at the same time. Often, they win while the landlord and the house seeker suffer from their exploitative antics. I have had many bad experiences with agents but the one that I find very painful was from someone I didn’t expect to be that callous.
“When my husband was transferred to Ibadan from Abuja, our pastor linked us with a pastor of the branch of our church in Ibadan who handed us over to an elder of the church who is an agent. We felt we were in good hands until after three yearswhen we discovered during a conversation with the landlord that the rentwas N400,000 and we had been paying N500,000 annually to our church.
“The complete package when we moved in was N750,000; N250,000 for agency and all those fees they collect and N500,000 for rent, instead of N400,000 demanded by the landlord. I was disillusioned by this and it eroded any trust I had for agents. They are all the same. They don’t care about anyone but the money they want to make.”
Across Nigeria, it is difficult to get an apartment for rent or lease directly from the landlord and consequently, avoiding exorbitant agency fees has become almost impossible. Saturday Tribune found that even in houses where landlords do not use agents, some landlords have turned themselves to agents who collect agency fee on their houses.
Adeola Babalola, a resident of Karimu Ilaka Street, Egbeda in Lagos State, said her landlord also served as the agent for his own house. She told Saturday Tribune that “I live in a compound with eight flats and my landlord occupies one of those apartments. For every tenant that comes in, he ensures he takes agency fee, legal fee and caution though he is a pastor and there is no agent involved. In his case, he is the lawyer, landlord and agent combined and he collects fully, every fee for these roles,” Babalola said.
On why there are so many agents in the country, a property lawyer, Bidemi Amoo, stated that the high population of people in Nigeria, which makes demand for shelter high, especially in cities, in addition to high unemployment rate, has made the property business a dumping ground for unemployed people looking for a source of income even when they do not have the requisite skills.
According to Amoo, the desperation of accommodation seekers plays a huge role in they becoming victims of fraudulent agents, adding that Nigerians do not take time to research before getting into business with people that lack integrity.
“It is time Nigerians respected professionalism and embraced the act of doing things right. While it is true that the industry is porous, they also need to work with registered professionals to avoid falling prey to sharp practices from unscrupulous or fake agents. It is true the industry is saturated but they need to learn to protect themselves by doing things right,” the lawyer said.
The Nigerian Institution of Estate Surveyors and Valuers (NIESV), under whose supervision the Association of Estate Agents in Nigeria (AEAN) was created to regulate the professional conducts of estate agents, has said that to practise as an estate agent, an individual must register with the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON), failing which such a practitioner is portrayed as a quack. This, however, has not checkmated the excesses of these unscrupulous elements in the profession who regularly trade their accreditation and goodwill for monetary gains.
Amoo’s stance was reflected in the views of David Enwefa, the Managing Director of Planwell Homes and Properties in Lekki Phase 1, Lagos, in an interview where he said that there are standard procedures to follow and the standard fee paid to agents is 10 per cent of the actual value of the property. Enwefaadvised Nigerians to be wary of fraudsters who pose as real estate agents. He also warned clients to make sure they receive and sign a letter of contract prepared by a legal practitioner before they pay the rent and should never pay rent to the agent but to the landlord.
Another agent, Olufumbi Davies, stated that unlicensed practitioners like lawyers, retirees and unemployed graduates infiltrating the profession had created many loopholes and given fraudsters the chance to penetrate and give the business a bad name. Davies noted that the number of agents in Nigerian cities was outrageous.
The major challenge faced by many accommodation seekers is the fact that they have to pass through a network of agents which increases the money they have to pay as every agent wants to cash out in every deal. And the government is not unaware of these challenges. The Lagos State House of Assembly, in 2019, worked on a new bill to regulate operations in the real estate sector by creating a regulatory authority to oversee, monitor, regulate and manage the property transactions in the state.
This, however, caused discontent in some quarters. The National President of Estate Rents and Commission Agents Association of Nigeria, Godwin Alenkhe, said that estate surveyors and valuers were omitted in the composition of the board, adding that the bill was an amendment to 2007 law on real estate, confirming the concern of many that the proposed bill did not provide for parallel regulation of the informal and formal sectors of real estate, pointing out vacuums like the bill not providing penalty for not meeting the requirements for registration.
The need to regulate the sector effectively was once raised by the chairman of the Lagos State chapter of the Association of Estate Agents in Nigeria, Adeolu Ogunbanjo, who claimed that his association had engaged the state government several times on the need to intervene and regulate the sector effectively in view of the rampant activities of fraudulent estate agents.
He insisted that it was imperative that government does more than paying lip service to the regulation of the sector, adding that “we are looking at a situation where government must ensure that anybody that indicates interest in the practice must go through some form of tutelage before being licensed to practice.”
The Society for Professional Valuation (SPV), on its part, supported the Lagos State government’s effort to regulate the industry through the establishment of an agency to regulate the practice of estate agency and development in the state.
The chairman of SPV, Mr Sola Enitan, in a statement, said real estate, as the fifth largest contributor to the national Gross Domestic Product (GDP), ought to be carefully regulated by the government as the spate of real estate criminality, fraud, money laundering and outright unethical conducts of real estate agency practitioners have more often than not earned the practice of estate agency within the state a bad name.
Also in Oyo State, the House of Assembly, in August 2021, called for the checking of illegal charges and extortions by estate agents through the Speaker, Honourable Adebo Ogundoyin, in a motion he moved alongside his colleague, Honourable Babajide Adebayo representing Ibadan North II. In the motion, the duo noted that it was becoming difficult for prospective tenants to rent a house or a shop without going through an agent.
According to the motion, there is a rise in cases of people being duped and extorted by estate agents who collect or charge illegal fees from them. It added that some dubious agents even abscond after collecting money from prospective tenants, leaving no traceable address.
Currently, legislation and government’s efforts have not been able to help the situation and Nigerian accommodation seekers continue to fall prey to the antics of unscrupulous estate agents.
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