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It’s no longer business as usual for fraudulent estate agents, developers -Toke-Benson, SA Housing to Lagos gov.

Have you been duped by fraudulent house agents? Are you saving for an apartment but worried about the high agency fee?  With the high rate of fraudulent activities of agents and developers in the real estate, the Lagos State Real Estate Regulatory Authority, LASRERA, is saddled with the responsibility of regulating activities of real estate practitioners and agents, as well as punish those engaging in fraudulent practices.

In this interview with AYODELE OLALERE, the Special Adviser on Housing to Governor Babajide Sanwo-Olu, Mrs. Toke-Benson Awoyinka, who also doubles as Chief Executive Officer, LASRERA, explained challenges facing the agency and how it is dealing with activities of fraudulent agents in the real estate sector.

You have been here for the past one year, as the Chief Executive Officer of LASRERA. How has the journey been?

Well, I’ve been here for a year now; I was given this responsibility by Governor Babajide Sanwo-Olu. Lagos State Real Estate Regulatory Authority became an agency in February 2020.  It used to be a department under the Ministry of Housing. It was called Lagos State Real Estate Transactions Department.

It’s been adventurous; it’s been tasking; it’s been challenging because people are resisting change. People do not understand that with life, everything must change. What we did last year is not what we’re doing this year. The law that set up the agency was actually law from 2007.

So, you can imagine how stale it would be right now. The challenges in 2007 are not the same challenges we have now. Now we have more sophisticated markets, everything has gone e-transactions and done online. We have virtual tours of properties. We have virtual advertising agencies; we have virtual real estate practitioners.

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So, we also are trying to comply with the governor’s T.H.E.M.E.S agenda of the 21st-century liquid economy. So, we’re also moving with the times. It’s been a huge task. We’ve looked at our laws and we’ve done what we need to do to the laws.

Bills are actually right now at the House of Assembly and we hope to get it fast-tracked soon. We got our executive council approval of the law. So, we’re doing everything that we can to comply with global best practices.

Under Governor Babatunde Fashola from 2012, the law didn’t make it mandatory for people to register their businesses or register their companies or activities. Yes, it says we should have it compared to a register of real estate practitioners.

But in law, we were very particular about the words and the law. So, if the law says you ‘may’, it means it is not something that you need to do. But if the law says you ‘shall’, it means that it is the law of the land that you must do that thing.

So, we moved away from the ‘may’ to the ‘shall’ because the times have now shown that we were not having a database of real estate practitioners, which has been harmful to the citizenry as well as the government.

Right now, we are registering real estate practitioners. We have categorised them into like six different bits. We have practitioners, who are under cooperative societies. We have practitioners, who are public limited liability companies.

We have practitioners, who are just limited liability companies. And then we also have people, who are working under these practitioners. We have actually given them recognition as well. So, they are either marketers or agents. We expect that if you have practitioners working with you, you must register them as your brokers or your marketers.

So, for instance, we have companies, which have registered marketers on their name and have registered also brokers on their name. It also gives them a sense of entitlement and a sense of belonging. It gives them that recognition that they have always wanted to be part of the real estate sector. So, we have those developers.

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We also have agents we have also categorised as PLCs agents, cooperative societies and agents of limited liability companies. So, once somebody tells me he is a practitioner, who has done this and that, we want to know where that practitioner is and what that practitioner is doing.

So, one of the things that we have said is for every practitioner, you must have a registered business address. When you have your registered business address, it means that if anything goes wrong, you’re in our database, we know where to find you unlike now when we have the briefcase agents, and briefcase developers, who sell and lease properties to our citizens, and they get fraudulent and we don’t know where to find them.

So, we’re trying to curb all that. We’ve had resistance from some of them but we’ve actually interacted with them. We’ve engaged with them, we have shown them we’re only here to clean up the industry, to sanitise the industry and to regulate the industry.

We’re not here to meddle in the affairs of your associations. We’re here positioning ourselves as a government and do what government should do. So, we’ve had people who have kicked against it, asking why the government is meddling in their profession. And we tell them government is not meddling; government is doing what is supposed to do.

The job of Mr. Governor when he was sworn in to be governor of Lagos State is to protect lives and properties. So, we cannot have real estate practitioners, selling 15 units of apartments to 250 people and the government folds its arms and pretends like it’s not seeing what is going on.

So, we’ve had people with a bit of resistance. So, in the process, we’ve had to collaborate with law enforcement agencies and the law courts and put the agency where it should be in protecting the rights of citizens, protecting the rights of engagement among citizens, and also giving Lagos that position where it should be, not only in Nigeria, but in the world, and making sure that on the ease of doing business platform, we also rank very high.

So, what have you done to make this registration easy for practitioners?

We thought of the COVID-19 pandemic. We thought the best way to have people registered is to make sure that we open an e-platform where people can do that. We had an engagement in October last year where Mr. Governor promised that this platform would come into existence. It will be a marketplace for real estate practitioners.

It’s supposed to be a place where you can go and pick a practitioner, an agent or developer. Anything you want in the building sector. You can do it online, and we’re populating that platform with that information. The response of people in less than a month after the launch, we had over 1000 people, starting the registration process though some of them have had difficulties in concluding the process.

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So, a number of them have come in here to seek the assistance of our officers to complete the process.  I think it is encouraging and it shows that the industry is actually in need of that sanitisation and the yearning for the state to regulate the sector.

What part of the state has more registered practitioners if you consider the fact that estates are springing up on the Island more than the Mainland?

We are yet to compile that data but, of course, we know where their addresses are. We’ve visited their offices to know but generally, I can’t say which area is more because we’ve had practitioners, coming from the Mainland and the Island. It’s a mixture of a bouquet of flowers without wings. We’ve had the low, the medium and high.

In the area of fraudulent activities, you cannot say it is mainly the Mainland. We’ve had a highbrow estate and property, which has been forfeited to the state government, which we are going to sell and return the monies of the victims. We’ve also had in average areas.

So, there is no area of Lagos that is left out when it comes to these practitioners perpetrating fraud. We know that there are lots of developments ongoing in the Lekki axis and I can imagine what is going on there. Last night, I received messages from somebody in Oko-Oba, Agege, who is having issues with developers.

So, there’s so much going on and that is why we are insistent that we need to have a database of all practitioners. When we have a database of developers and our agents, then we can settle these matters amicably either through the committee of inquiries, which the governor is setting up to work within the agency or in collaboration with law enforcement.

That’s why we need law enforcement to cooperate with us when a crime is committed. We need the law enforcement officers to come in and then we charge the perpetrator to court through the Ministry of Justice, the Office of the DPP. So, we go through the normal legal process to make sure that we resolve those issues.

What advice do you have for prospective tenants?

We tell people not to talk to those practitioners, who are not registered with the state government. It is a buyer-beware thing and buyer-beware is mainly in real estate. So, now it has moved away from just the buying and selling to also the leasing and the agency business where a lot of people are falling victims of fraudulent practitioners.

So, my advice to everybody in Lagos is, before you deal with that real estate practitioner, make sure he is registered with the Lagos State Government. We issue them permits, which have numbers. They can call any of our officers to check if they cannot find the names of any agent on our website. It could be that such agent is still in the process of registration.

We are there to give all that information. Our website will be populated with that information as well. So, I think for every person in Lagos, do not deal with that person that’s not registered. We would tell them to pause before they pay that money. So, make sure that that person is actually registered and has been permitted by the state government to practise.

Does your agency also regulate agency fees because we have situations where agency fees are almost the same as the cost of rent?

Well, you know, there’s a law, the law of the land says agency fee is 10%. And for anybody who is willing to listen, we tell them, it is 10%. If you report to us, we will tell the agent or practitioner to refund your monies. That’s why we have our mediation team.

Agency fees are 10%. The law is on your side only when you tell the law what is going on. So, that’s why we keep driving advocacy that government is a two-way street. You tell me what’s going on, I help you with what is going on. So, we have to meet each other at one point. 

These are the challenges we have had and we have seen the challenges. And that’s why the governor came up with this agency, knowing full well that it is very, very critical. It is needed at this time. The real estate industry is a multi-billion dollar industry, and so, we cannot just leave it for charlatans.

We have responsible practitioners and the first challenge we had was the practitioners, saying that they did not want to be matched with miscreants in the industry and we told them we are here as a government. We know the needs of society. We know the way this practice works. We have the principles. We have the agents, we have the brokers, and it’s in categories.

It shouldn’t be an industry where anything goes. It shouldn’t be an industry where every layman or every unemployed person picks up a bag and says that I’m an agent or a developer.

That’s why we’ve had issues with the collapsed buildings here and there because people who are in the industry, nobody’s looking at whether they are supposed to be there.

And then you also have people collecting monies from multitudes of people. So, if I have a property now and people find out that it’s up for rent or for lease, next thing is you see hordes of agents, claiming that same property without knowing me, the owner.

I’ve had a case where a property in Banana Island was listed by an agent, who is actually going there to show that property. And the owner of the property was the one calling the approved agent that somebody else was showing his property to people whereas they had never met the owner.

A prospective tenant could have paid monies into a cloned account or something. So, those are some of the issues that we tend to look at and find a way to solve as well. But it’s a huge industry. The challenges are huge, but you know, as government, we don’t give up; we try to improve on our services and see how best we can help our citizens.

How do you ensure this industry generates revenue to the coffers of the state government?

We have regulations out there for them. We’re going to be having a roundtable policy meeting before the end of this month, where we engage the practitioners and associations. Also, we’re going to be deliberating on offline developments.

Every day we see real estate companies advertise rice and animals to give to prospective buyers. They tell people to subscribe to estate or apartments and at the end of the day, the subscriptions never come up. So, we’ve had complaints.

We are actually dealing with a few here right now, where those companies have not met up with what they promised the subscribers. So, when at that policy forum, we’re going to be deliberating on how payments received by developers are banked and how those monies are managed.

We’re also speaking to Lagos State Signage Agency, where we’re going to also be meeting with the advertising practitioners in the state and we’re going to put some checks and balances in place where we can see through who is a fraudulent practitioner and who is actually a reputable practitioner.

So, part of the other thing is to make sure that any practitioner that has been found wanting legally by the courts or by a committee of inquiry, we list them and we blacklist them on our website and we let the people of Lagos know that it’s no longer business as usual. People collect money from people for so many reasons that they’re not supposed to and nobody has been checking them or putting them in check.

We are also looking at mortgages too. We found that in the industry, mortgages have really not grown. And the reason mortgages are not growing is because the right to foreclose that property or to get your property back when people default on their mortgages is left to the law courts and it can drag forever. So, we’re coming in with the mortgage foreclosure law.

So, if you default on your rent or lease or that mortgage, we have processes in place that not only takes care of the landlord or the mortgage company but also makes sure that the rights of that person, who has failed are protected as to how much he has put in and how much he’s getting back.

So, most times, people have told us that the tenancy law is veered towards tenants but we’ve also sat down to see that for us to actually put more funds into the housing sector in the state, we needed to put some laws in place and so we’re looking at those laws and they definitely will be out very soon. These are the things that we’re looking at that we intend to do before the end of this year.

You said you have over 1000 registered practitioners. Do you do background checks on them to find out if they are professionally qualified to practise, or you just register them for registration sake?

We are being very diligent; we just don’t want people to pay the government and walk away. Cases of collapsed buildings could be traced to incompetent or unqualified developers, so we do background checks.  Our officers here go out to those offices.

We are not just issuing permits to people; our officers actually go to their offices. They look at your paperwork, your certificates of incorporation. They look at how many people are working with you and the kind of business that you’re doing. We’re taking references. We’re not just allowing people to pay.

We encourage them to belong to professional associations, professional bodies. We don’t want to register you for registering sake; we don’t want a database for the sake of having a database.

We want a credible database because people all over the world will pick up information from that database and will use, and we wouldn’t want to be culpable in promoting people, who would eventually bring disrepute to the industry or to the state government.

What are you doing on advocacy?

On that, we’ve had radio jingles and we are in the process of creating a docu-drama that is going to actually show people what we’re talking about. We’re having a drama series where it will show people what exactly we’re trying to protect them from.

We want to protect people from getting duped. It’s not a good thing, saving your money for so long to get a property and then on the day you are supposed to move in, you find that it belongs to 1,010 other people.

This year also, we intend to meet with the 20 local governments or community development associations. We’re going to go there and speak to them so that they can also take it back to the people and let the people know the government is here to protect them.

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