It is reported that over N3 trillion have gone into the drains in property scams in Abuja, Port Harcourt and Lagos State alone in Nigeria to rogue estate agents and fraudsters who engage in sharp practices to scam unsuspecting prospective property buyers. Fraudsters are numerous in the property markets capitalising on our weak rule of law and high level of corruption in the country. Innocent Nigerians keep falling victim because properties (lands and buildings) are basic needs, a form of investment and a bundle of joy.
On June 17, 1988, Adebayo Adeyiga, Alhaji T. O. Ashiru, Mr Ekundayo Kuponiyi, Alhaji Sikiru Adekoya, Mr Moses Adewunmi Adekoya and Mr Phillips Ogunbanwo (suing for themselves and on behalf of other members of Shangisha Landlords Association) sued the Military Governor of Lagos State, the Attorney General of Lagos State, the Director of Town Planning and Land Matters, the Land Use and Allocation Committee and Mr Samuel Olatunde Smith (1993) at the High Court of Lagos State.
The plaintiffs sought a declaratory order that members of the Shangisha Landlords Association, whose lands and landed properties were confiscated and demolished by the Lagos State Government (which includes its servants or agents and anybody acting for it) between June 1984 and May 1985, are entitled to first choice preferential treatment in the allocation and/or (as soon as possible) reallocation of their plots based on a meeting held on October 16, 1984 in Lagos State Ministry of Physical Planning Office, Alausa.
The landlords’ association won and the Military Governor of Lagos State and others appealed. The appeal was dismissed in 2001 by the Court of Appeal. The Supreme Court affirmed the judgments of the lower courts on February 10, 2012, under a lead judgment delivered by Olufunlola Oyelola Adekeye, J. S. C. Between 1988, the year of the originating summon, and 2012, the date of last judgment, there were various transactions of sale, resale, purchase and repurchase of lands and buildings in Magodo Phase II (the illegally acquired Shangisha lands and properties covering an area of about 7,300 acres and in which 549 plots were demanded by the members of the Shangisha Landlords Association as compensation according to the Supreme Court judgement).
The acquired Shangisha lands were developed into a residential scheme known as Magodo Phase II. Most of the buyers of properties (lands and buildings) in Magodo Phase II were not aware of the risk they were entering in a market where the watchword is: Caveat emptor (Buyers beware)! It is also being alleged that unsuspecting property investors in Lekki areas may have lost an investment totalling over N3 trillion! This is where investment in properties and investigations are synonyms.
It is very pertinent to investigate and investigate and investigate before buying any property since investment in properties usually takes a large chunk of personal savings or bank loans. It is necessary to investigate the location of the land. What is the history of the land? What is the future plan for the land? What did government earmark the land to be used for and what is the land being marketed to be used for? Land surveyors will chart the property and find out if the land is under government acquisition.
It is also important to investigate the land, its geology, neighbouring properties and planning rules. Though land is defined as a piece of the earth and the space above it and below its surface, in some cases like the land near airports, there are rules on the number of floors that can be developed. Properties near security zones like Governor’s house and State Security Service offices may be constrained on the number of floors that can be developed. What is the title on the land and why is the owner selling? A visit to states’ ministries of lands and physical planning especially land registry will reveal all necessary information concerning lien, status and planning regulations in states.
It is also necessary to investigate the seller. Is he or she the owner of the property or acting as an agent to a principal? Read his or her letter of offer to sell and ask around from his or her neighbours about the kind of person he or she is. Carry out thorough background checks before you commit your hard-earned money on any property. Also, investigate the price so that you do not overpay for the property. Investigate and negotiate the asking price, the agency fee and the legal fee. Ask around the area the best price that should be paid for a unit square metre of land in the area.
Equally important is the investigation on other charges, statutory and association-imposed, that must be paid one-off and regularly on the property. Other properties around your property and what they are being used for should also be investigated. Is their usage likely to be injurious to your occupation of your property? Check the planning law of your area and make sure you can seek and get approval from the government to use your land for the purpose you intend to use it for. Also, ensure that the approved usage of the adjoining properties to your property conforms to the planning regulations.
If the property is a building, make sure you see government approval to build. The government may decide to demolish the building if it does not conform to its approval for the area. Also, investigate the ‘integrity’ of the building using non-destructive tests. Structural engineers will do a strictly professional job that will be worth the price. Thomas Jefferson, the 3rd United States of America’s president, stated that “Ignorance of the law is no excuse in any country. If it were, the laws would lose their effect, because it can always be pretended.”
Investigate the future plans of the government in the provision of infrastructure in the area, the existing infrastructure like high tension wire, highway and gas pipe, and its distance to your property. The services of professionals in property transactions, especially the seven professionals in the built environment (architects, builders, engineers—civil, electrical and mechanical,—estate surveyors and valuers, land surveyors, town planners, and quantity surveyors) and lawyers, are very essential to any prudent real estate investor. They will investigate on your behalf before you invest.