Lack of C-of-O inhibits ability of property owner to derive maximum value from it —Expert

Mr Chudi Ubosi, is the Principal Partner, Ubosi Eleh and Co. In this Interview with DAYO AYEYEMI, he spoke extensively on the implications of having a property without the necessary title documents. To overcome the bureaucratic procedures associated with the issuance of C of O and planning approval, Ubosi suggests a sustained public sensitization/enlightenment campaign among all stakeholders.

UNDER the present business climate – volatile forex, high interest rate, exorbitant building materials prices, multiple taxations and other bottleneck do you think that the promised 50,000 new houses per year by the Federal government can be realised ?

It will be a difficult one. Not because it’s impossible but because knowing where we are coming from in Nigeria and the politics and bureaucracy that accompany these plans, it will be a wonder if they achieve 500 houses nationwide in a whole year. Besides, we have always said and will repeat again, it’s not the business of government to build houses. The business of government is to provide the enabling environment for the private sector to see the need and encouragement to invest heavily in housing in consonance with the needs of the people.

 

How?

Well, the first question would be what is needed to provide 50,000 units of housing annually? Does the government have land already available? Where are they? Is the land serviced and infrastructure titled? If No, this is the first step and this takes time.  I mean acquisition, payment of compensation, providing services, among others. All these take time. twelve months would be tough to accomplish this. Then of course, what is the design? Type of houses; low cost or medium cost? Targeted at whom? Selection of contractors, mobilisation of contractors, supervision and management of construction works? Again, these are all stages towards achieving the targets. It would require a miracle for government in Nigeria as structured and currently undertaken to scale these hurdles in even 24 months.

 

What are the strategies that will make this happen, considering past failed efforts?

I think the main strategy that will make this possible is first and foremost the rationalisation of the objective. Separate reality from political rhetoric. Set achievable realistic goals in the light of the present day realities of governance and all its shortcomings and challenges. There must be a serious review and determine what is really needed on the housing ladder. Low or medium income. What would be the model – fully built or just shell leaving buyers to finish, etc. There are so many models. Will the government provide mortgages? That would facilitate take up rate as expensive as those may be. In the final analysis, the model of construction – traditional construction methods or the model where prototypes can be built using pre-cast forms that will allow 100’s of structures to be done within short periods of time.

 

What is your advice for the federal government?

The Federal Government should involve private sector participation in the planning and execution of the project.

 

What are the challenges militating against provision of low and middle income housing in Nigeria?

Many factors militate and these include but are not limited to absence of construction finance at reasonable rates, absence of mortgages to enable take up of developments when completed, reliance on imported building materials, absence of good and skilled labour, use of non professionals and inexperienced professionals, high cost of land and lack of access to cheap land, absence of title to the land etc.

 

The Lagos State government says that 80 percent of property/ real estate in Ibeju-Lekki, do not have title or permit.  What’s your take on this?

It is very possible. The government has the records so when they speak they are talking from the perspective of insider information.

 

What does this translate into?

It means so many things. The absence of title means that quite honestly, one only has an equitable interest in that property. It means that the lack of title inhibits, to a very large extent, the ability of the property owners to derive maximum value from it. It means that the assets are basically dead capital. It means that even sale, lease, redevelopment etc are a problem. Even transfer to their heirs and inheritors will be challenged in future. They cannot even use the property for a facility from a financial institution. The lack of proper title means that one’s ownership of the property can still be legally challenged and one could lose the property.

 

What could be responsible for this?

I think to a large extent illiteracy and the lack of understanding of the significance of registered title documents is a problem. Then add to this the lack of knowledge on how to go about obtaining these documents at the Land Registry or Ministry of Lands is also a problem. Also the non use or lack of use of professionals who can guide in this regard, the unwillingness to pay professional fees and constant patronage of quacks is part of it. Finally, the lack of information or misinformation and a lack of public campaign by the government encouraging people to obtain registered title adds to the problem. There is also the lack of trust of the govt where a lot believe that if your title is registered then it becomes easier for government to tax or even compulsorily acquire ones properly.

 

What are the solutions?

I think to a very large extent a major sustained public awareness campaign is necessary. Then the process must be simplified and possibly should be undertaken in a one-stop office where the moment you submit your papers the entire process is completed within that office. What obtains now is that people have to move their files from Lands to Legal, to Survey office to Accounting to Tax offices etc. If there are queries to the file, it may even take close to a month to discover where the file is, and what is delaying it. This means moving around 5/6 different offices ensuring that your file is moved alongside. Sometimes, these offices are kilometers apart.  The possibility to loose interest or get tired is very high. The government needs to also educate their staff on the significance of the title documents and they should be made to understand that every document registered is not just a piece of paper but one that will be used to generate economic activities and in effect employment and in the final analysis add value to the economy. When that revelation is caught then it will be easier for public officials to not just look at processing title documents as just another job but they can see in it their contribution to national development.

 

Do you think that Diaspora investors are fuelling Nigerian house price rises?

I honestly cannot say that the diaspora is fueling Nigerian house price rises. The truth is that, for a lot of them, by the time the prices of homes in Nigeria are converted to the currencies of their country of residence and they compare homes there to what is being offered, add environment, services and infrastructure quite a lot back out rather preferring to invest in the country where they reside. Also, the fact that Nigeria has little or no mortgages and for most purchases, 100 percent cash payments are required. This further reduces the actual numbers of diaspora that are able to play in the local market compared to the international players. Many times most cannot come up with the huge sums required to purchase properties here. This is despite the favorable exchange rates etc. And in a way, the foregoing is what fuels the practice of diaspora buying land and contracting builders here to construct a home for them as they pay in installments.

 

Why is Nigeria attractive to diaspora property investors?

Following from the previous paragraph the simple answer to this question would be the current favourable exchange rates that have made local properties cheaper compared to the property prices elsewhere. Many who can afford it are racing to take advantage of the opportunity.

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