Nigerians now invest more in foreign property —Alenkhe
Mr. Godwin Alenkhe is the Chairman, Lagos State Chapter of the Estate, Rent and Commission Agents Association of Nigeria. In this interview with MAUREEN IHUA-MADUENYI, he says the high cost of land transactions is having a negative impact on the real estate sector
The devaluation of the naira has impacted on most sectors of the economy. How is it affecting real estate agency?
It is really affecting the response we are getting from our clients. To them, it is now better to invest in properties overseas than here in the country. Most people are now buying real estate overseas instead of bringing down the money here because they don’t really know the value that the money can get for them.
To us, we have seen a reduction in the level of patronage because people are diverting funds overseas, even to West Coast countries such as Ghana, Togo and Benin Republic. They prefer going to such places than investing here in Nigeria and it’s really affecting us.
The whole thing actually started about two years ago, long before the devaluation of the naira. People found it more lucrative to invest outside because of the cost of perfection of documents. In our neighbouring countries, you don’t go through those hurdles where you have to pay multiple taxes. You have to pay to the Federal Government, the state and local governments on just one property. So, when they realise that the money can’t get them what they want here in the country, they take it overseas where they are sure that they will not experience these problems in real estate transactions.
Recently, the Lagos State Government reduced the charges for land transactions; how has this impacted on your business?
The damage has been done a long time ago. It is like something that is too late to rectify. The only thing that can improve the situation and bring back the peak period is when the naira appreciates and the different arms of government develop a singular policy on property documentation in the country. Not when you will be paying land charges to the state government and the federal will come and later the local government will also come to get their share.
And within the same locality, you also have the local government revenue that has to do with land. The damage has already been done; it is only when we have a singular policy, for instance, fixed amounts for specific transactions and not paying to different tiers of government in the name of revenue.
Despite the state government’s tenancy law, it has been discovered that some estate agents still charge two year’s agency fee and commission, while landlords are made to accept one year’s rent. Why is this so?
The truth is that we have tried to enlighten most of our clients that it is better to always patronise government licensed estate agents who are simply regarded as the service providers in the housing sector. Most people taking two years agency fee and commission are doing illegal business.
A couple of months ago, the service providers in Lagos entered into an agreement that we should take one year rent, agency fee and commission. And that the rate should be 10 per cent agency fee the one year rent.
If, for instance, people are having that kind of problem, they should channel their complaints to the appropriate quarters such as the Lagos State Real Estate Transaction Department and associations like ERCAAN are also there to help such people. If it is our member, we have ways of dealing with the compliant and if the agent is not our member, we will report him to the Lagos State Government.
Some programmes have been introduced in the last two years to eliminate quackery and improve the lot of estate agents. What has been the achievement so far?
Nothing much has been achieved in the sense that the government has not been supportive in that area. The government has not been assisting us even though we feel it is a collective responsibility; the government, with its law enforcement agencies, and professional bodies like ours need to come together and take quack, fake and dubious agents off the streets; but in spite of the efforts, nothing has been done and it is quite unfortunate.
The government said it is going through a process of regulation; it wants to have a large number of professional estate agents and service providers in Lagos State before they it embarks on picking the off the streets but we say this is taking too long a time.
The government needs to do it side by side; as it is licensing professionals, it should also be taking the quacks who are not fit to practice off the streets, and there should be a process of taking them off the profession.
Has there been an increase in the number of people coming forward to register with your association and others?
In the last one year, we have received improved numbers of application better than what we used to have in the past; people have been coming forward to register. But the area that is still lacking is enlightenment. Not many people know that the government now has licensed estate agents like they have licensed customs agents. The government needs to do more in that area; they need to create an enabling environment for enlightenment, they need to embark on a process of enlightenment of members of the public that they should not patronise unlicensed estate agents.
They need to tell Lagos landlords that they should not entrust their properties to unlicensed estate agents, it is only the licensed government agents that should be given properties to manage. Government has not been assisting in that area and those are the little things that affect the real estate agency profession adversely.
How can one identify a licensed real estate agent?
A licensed estate agent must have an origin where he emanates from. It is either he belongs to our association or to the Association of Estate Agents in Nigeria, which is being facilitated by the Nigerian Institution of Estate Surveyors and Valuers. He must also go through the process of licensing with the Lagos State Government. This entails that he must have an office and his business must be registered, and he must be knowledgeable in the profession; all these should be in place before he can obtain a licence. The licence is like a document from the government that you are capable of transacting that business and differentiates you from the quacks on the street.
If members of the public are looking for properties to buy or rent and they come into an estate agent’s office, they should first ask if he is licensed and also ask to see the licence issued by the government, which is an authority for the person to practice.
