1. chudi s. ubosi – fnivs mrics
PREVALENCE OF FRAUDULENT ACTIVITIES IN REAL ESTATE TRANSACTIONS IN NIGERIA
chudi s. ubosi – fnivs mrics
Lead paper presented at the 2nd Edition of LASRETRAD 2017 Stakeholders Forum held at Adeyemi Bero Auditorium, The Secretariat, Alausa, Ikeja.
Tuesday 19th December 2017

2. A. INTRODUCTION Why fraud is possible What is real estate fraud?
16 million housing deficit nationwide
By UN standards we need to add 750,000 units annually to bridge the gap
Currently annual addition to the housing stock is less than 50,000
Lagos 3.50 million with deficit
Net daily inflow to Lagos is about 800 persons
Annual addition to the housing stock in Lagos is less than 10,000 units

3. These statistics paint a vivid picture of huge demand over supply.
Source: Centre for Affordable housing Finance Africa
These statistics paint a vivid picture of huge demand over supply.
Creates a market for price hike
Makes black market profiteering possible
Source: Centre for Affordable housing Finance Africa
…. Average annual household income needed for the cheapest newly built house by a formal developer 2017
… Average annual household using expenditure, 2015 (PPP$)

4. B. REAL ESTATE FRAUD AND THE NIGERIAN EXPERIENCE.
High demand over supply makes it easy to fall prey to fraudsters
Variations of fraud --
- Sale of a plot of land or property to multiple buyers
- Sale of a property using forged or fake documents
- Letting of a property to multiple prospects
- Letting of an occupied property to a new tenant
- Letting of an unfinished property to tenants
- Collection of consultation fees etc before showing properties or real estate available

5. - Forcible ejection from or by land grabbing omo-onile for property already paid for
- Collection of multiple fees by omo-onile – foundation fee, decking fee, roofing fee, painting fee etc
- Non disbursement of sale or rent proceeds to the vendor or principal
- Placing of “top up” or “mark up” on sale/letting figures approved by vendor or Landlord etc.
- Possibly the reason why LASRETRAD was created

6. How did we get here?
Classification of estate agency as a general business
Low entry and exit barriers
Perception of estate agency as a business with huge cashflow and fees

7. OFFENCE AGAINST PROPERTY PERCENTAGE SHARE OF TOTAL
Real Estate Fraud Statistics
STATE
OFFENCE AGAINST PROPERTY
PERCENTAGE SHARE OF TOTAL
FCT
9350
14.30
Abia
113
.17
Adamawa
1417
2.16
Akwa Ibom
333
.51
Anambra
1413
Bauchi
1713
2.62
Bayelsa
837
1.28

8. OFFENCE AGAINST PROPERTY PERCENTAGE SHARE OF TOTAL
STATE
OFFENCE AGAINST PROPERTY
PERCENTAGE SHARE OF TOTAL
Benue
497
.76
Borno
479
.73
Cross River
1154
1.76
Delta
2502
3.82
Ebonyi
595
.91
Edo
307
.48
Ekiti
1008
1.54
Enugu
1094
1.67
Gombe
1350
2.06
Imo
873
1.33

9. OFFENCE AGAINST PROPERTY PERCENTAGE SHARE OF TOTAL
STATE
OFFENCE AGAINST PROPERTY
PERCENTAGE SHARE OF TOTAL
Jigawa
214
.32
Kano
2375
3.63
Kaduna
502
.76
Katsina 65
.01
Kebbi
370
.56
Kogi
480
.73
Kwara
614
.94
Lagos
22885
34.99
Nasarawa
725
1.10
Niger
1083
1.66

10. OFFENCE AGAINST PROPERTY PERCENTAGE SHARE OF TOTAL
STATE
OFFENCE AGAINST PROPERTY
PERCENTAGE SHARE OF TOTAL
Ogun
1112
1.70
Ondo
1934
2.95
Osun
540
.82
Oyo
1752
2.67
Plateau
1928
2.96
Rivers
897
1.37
Sokoto
1055
1.61
Taraba
998
1.52
Yobe
520
.79
Zamfara
303
.46
Total
65,397
100%
Source: National Bureau of Statistics

11. C. GLOBAL PRACTICES Real estate practice is highly regulated
Professional bodies conduct exams
License to practice
Annual renewal

12. D. PROTECTING YOURSELF FROM REAL ESTATE FRAUDSTERS
Never be desperate for any property
Undertake proper due diligence on any transaction
Be wary of cheap properties
Use the right professionals
Document transactions
All payments must be made with cheques not cash

13. E. WHAT THE GOVERNMENT CAN DO TO PROTECT
CITIZENS FROM REAL ESTATE FRAUDSTERS
Greater regulation
LASRETRAD
Licensing of practitioners and continuous education
Public awareness campaign
Legislation on practice of estate agency
Serious penalties to serve as deterrent

14. F. CONCLUSION Real estate fraud is not limited to Nigeria
May be difficult to eradicate, but can be brought to a bare minimum
All stakeholders have a role to play
More intense regulation
Stiffer penalties to serve as deterrent