WHEN RICH MEN DIE, WHAT HAPPENS TO THEIR PROPERTIES?

Monday

When rich men die in Nigeria, is seems the controversy over their properties lingers for years after their death and sometimes for a lifetime. Whether or not they leave a will behind,in many instances makes no difference whatsover to who gets the proceeds of his wealth. We have heard the stories of prominent families where the children have publicly been at war with one another for many years after the deaths of their fathers. Recently a prominent Nigerian died leaving the family home to his wife in his will. It is reported that the older son has taken up residence there, saying that in their culture, the first male child will take over the fathers property. What then does this make the law? An ass?

Tuesday

The Minister for works has promised that from next year, all construction projects below N5 billion (approx $157m) will be handled by Nigerian contractors with the necessary capabilities! He said that this policy was designed by the Federal Government to help build local capacity and promote local content in the industry and rely less on expatriate companies. He said that over 80% of the of the capital budget of all tiers of government is expended on in the construction and engineering industry, which is dominated by foreign contractors and consequently creating a loss in income for the country. The policy he claims is aimed at redressing the imbalance. We sincerely hope so.

Wednesday

The Federal Government has approved the allocation of N2billion(approx $63m) for the construction of the official residence for the vice president in Abuja!  In 2009 N7.1 billion was allocated for the design and construction of an official residence for the then Vice President. We are not clear what has become of that residence. The new official residence is reported to be contracted to Julius Berger and must be completed in 20 months as the Vice President currently resides in the guest house meant for president’s visits! Also 2.2billion naira was approved to construct an additional banquet hall to host presidential ceremonies

Meanwhile, N1.5 billion was allocated for the development of a rail line and N1 billion for health care facilities! Reporters were told at a meeting that the N50 billion allocated overall for infrastructure development for the FCT was inadequate and further intervention funding would need to be found!?……

Thursday

I had to visit some large estates along the Chevron Alpha beach area, which are still in the finishing stages of construction and still fairly inaccessible due to the untarred roads. What struck me about these estates that have been so widely marketed for years, is how poor the infrastructure and quality of construction is. The completed units have been empty for so long that they are already showing signs of decay due to the proximity to the ocean and the high salt content in the air. The developers are obviously having financial challenges as they are not getting the returns on these properties that they had projected for loan repayments. With so many properties lying empty it makes a mockery of the government policies to build more affordable homes for people

Friday

I got a call from a gentleman who wanted my thoughts on setting up an on-line interactive property site. Whilst I thought the call would be brief, he went into facts and figures, keeping me on the line for at least 20 minutes. I jokingly told him I would charge him consultancy fees, to which he spent a further two minutes laughing. I was certainly amused by his proposition, which is what kept me on the phone for so long, but what was clear to me was that he had not researched the property market well enough to realise that his proposal while having good intentions, may not work in the Nigerian property market, which in reality adheres to no regulations or law. I wish him luck anyway!

OWNING vs RENTING

Monday

Everyone I know in Nigeria wants to own their own home, yet not many can afford to do so. In a country where more often than not, you will certainly have to purchase a home outright or if you are fortunate (maybe unfortunate) enough to get a mortgage, then you spend almost double the purchase amount acquiring a property.

Apart from the actual cost of the property, there are other costs to be factored into the purchase, valuation and survey fees, mortgage fees, estate agents fees, legal fees, transfer fees, all the government tax charges etc. Some people are so interested in building the biggest and flashest mansion anywhere they can get land, they forget that the location may not be best suited for living in. They then find that they cannot live in, sell or rent out the property, due to location constraints.

Research needs to be carried out on area prospects (excluding your home town!) before building, as this may help prevent unfortunate mistakes that will make your property unliveable. Renting may be the best option until you can afford what you really want

Tuesday

On the topic of building in the “wrong” location, I was contacted by someone who had put up a 15 bedroom house which he wanted to use as a small hotel, in the Ogba area of Lagos. He started the project five years ago, and was not able to complete it due to over stretching himself financially. He now wants to sell it for “anything reasonable”?

I have said in past articles, that a property is only worth as much as someone is willing to pay for it. Especially a property built in a swamp area with no infrastructure around it.

Wednesday

It is almost the end of the year and the much promised 265 days of rain we were told to expect by the environmental agencies earlier in the year, did not arrive ( maybe it passed over Lagos!). Of course there has been the odd day of heavy rainfall, but nothing compared to last year’s flooding. The Harmattan season will soon be here and we can forget about rain for a while. Temperatures have been so high recently, hitting 32-34c most days, with humidity rates overwhelming. It makes it difficult to work or be outside. Viewings have to be conducted early morning or evening, to prevent heat stroke.

Thursday

Another building collapsed in Lagos, killing the only two daughters of an elderly mother. At the time of writing this the mother was recovering in hospital, but has not been told her only children have been killed! It is a travesty that is played out daily. Unqualified builders build properties that do not stand the test of time, collapsing one day and killing inhabitants. Who is held responsible? The owner of the property? The builders? Or the regulatory agency that passed the building as safe? In most instances none is held responsible and the surviving family members are left to mourn and foot the cost of their loss.

Friday

New residential estates are springing up everywhere in Lagos! Small, medium, big, serviced, unserviced, accessible, inaccessible, well built, poorly built, semi-affordable, very expensive (quoted in $ only), furnished, unfurnished. I could go on, but I am sure you get the drift.
This clearly highlights the need for good quality maintenance of these properties. It is sadly an area that is lacking and needs more input and expertise. A lot of good estates are built, but over a year or two, you begin to witness deterioration in the infrastructure. Facilities management has a long way to go