BUYING A PROPERTY OFF PLAN

Newly built properties on estates became popular in the 70’s and 80’s and even more so in recent years as bank mortgages became unaffordable and impossible to get. Due to rapid rises in house prices, buyers are happy to put cash deposits down on homes before they are even built. Developers now offer attractive payment plans for buyers spread throughout the building progress.
The biggest question to anyone putting down money on a property that they have not seen is how to reduce the risk of purchasing a property that has not been built yet?
 Buying off-plan does have its advantages. It can be cheaper to secure a property before it is finished and it usually allows buyers to sometimes have a say in design features, fixtures and fittings. But there are also significant risks to be aware of. You need to research the development plan, check the developer’s credentials and track record to see if there is a history of delivering on time or providing low quality finishing’s. Buyers should ensure the developer has insurance so that if they collapse, you will get back your deposit. Use a good lawyer to check the paperwork which you should be able to view before purchase. Look at other properties the developer has built to see the value for money you are getting and to get an idea of what to expect once it completes.
Make sure you are aware of the timeline of the project so you can plan your payments and when to move in. If your property is going to be part of a big development, find out when the other homes will be finished, otherwise you risk living in a building site for a while.

If however a buyer fails to go through with the purchase for whatever reason, they will usually lose their deposit on the basis that they have failed to fulfil their side of the agreement. When buying a property off-plan, buyers are usually asked to pay a deposit of 10-30 per cent and sign a contract, usually prepared by the developer, agreeing to pay the balance over about one or two years and complete the transaction when the property is handed over to them. If the buyer is forced to withdraw from the deal because they are unable to raise the balance of the purchase price, they can be also be sued by the developer.  When buying off-plan, most buyers do not realise that if they do not complete the transaction, then not only will they lose their deposit, but they can also be sued by the house builder for further payment of losses.

During the building stages It is hard to judge how a property will look just from the computer generated pictures but you can get an idea of what it will be like living there by finding out where in the development your property will be.
Make sure you visit the site so you can visualise what it will look like and ask questions such as how much sunshine you will get and what the surrounding area is like. Get an idea of the size of the rooms so you can get the right furniture and make sure it suits your needs. Keep an eye on the property throughout the building process and conduct a 'snagging' survey near completion so you can spot any defects and get them fixed by the developer. It is best to protect yourself and your investment whist also ensuring that you keep your end of the bargain by having your payments ready on time..

EBOLA FREE ZONES

With all the panic about Enola sweeping the country and the world, everyone seems to be on red alert about touching other people or even just breathing in the same air as them or God forbid, them sneezing or coughing near you. In all its seriousness, there are still causes for amazement when the driver turns up late, frantically chewing kola nut because he claims he was bathing in salt water as prevention against Ebola, or the Security men at the gate of an estate wearing winter wool gloves to hand you the visitors book and pen. I had to visit a vacant newly completed block of flats in Lekki this week and on getting there, I found the gate open and no gateman around, the gateman two doors away came rushing up to me and whispered that the gateman was inside the building and had been sick for a few days and no one was going near him for fear that it may be Ebola, you should have seen me practice Michael Jacksons fast Moonwalk and hot foot it to my car, whipping out my bacterial wipes to clean my hands, even though I had touched nothing. This panic is all a bit out of control, but we should be safe rather than sorry. I have actually cut back on my visits especially where it is a busy work sites. The truth is that the fear of Ebola, is the beginning of wisdom to many Nigerians. As I write this article, the virus has claimed its third victim, with many more quarantined. Those practicing in the Real Estate market, need to be very careful about interactions and staff safety

It was in the papers this week that the Nigerian Mortgage Refinancing Company(NMRC) which is a private sector company is being set up to encourage financial institutions to increase their mortgage lending by providing them with long term funds and assist in reducing mortgage rates. It has set 20 percent as the minimum equity contribution banks must consider when a loan application is made, if an applicant is to be considered for a home loan, of course earnings and assets will contribute to the acceptance, and the lease must be at least 20 years to work. It will take at least six months for loans to be granted.

I sincerely hope this will all become clearer as they start, as prospective home buyers are in need of financial help to secure their own homes.

PROPERTY HOTSPOTS

There are so many new areas of development coming up in Lagos mostly on the outskirts of Lekki, Magodo Isheri Sango, Akowonjo, Epe and the list goes on. Traditional built up areas like Ikoyi, Victoria Island, Ikeja, Surulere and Yaba are being transformed daily and becoming unaffordable. Take a drive through some streets in Ikoyi or VI and they are impassable with potholes and stagnant lakes of water everywhere. The price of land in some of these areas is now worth more than the properties that stand on the land that is why developers are putting up multi story high rises with prices being quoted in dollars. Of course these areas and these properties are out of the reach of most. In order to maximise ones investment and possible future property rises, it is best to consider areas that have access to good existing infrastructure like roads, schools, power and transport, I say “existing infrastructure” because in many cases people have bought in areas where infrastructure was promised and years later nothing has been delivered, leaving the residents signing petitions and making complaints to government regulatory agencies. It is important to check out the area before buying there. Areas like Apapa which it is rumoured that property prices are depreciating due to the infrastructural decay, pollution and heavy traffic is a fantastic area to invest in if you can afford something there. The reason for this is that it is centrally located has already been tried and tested and has good infrastructure. It may be going through a period of depression now but it will certainly improve in years to come. Abijo, Ibeju Lekki and the Lekki Free trade Zone are also areas to consider as urbanisation on this axis is rapid; it is acquiring the required infrastructure and is still relatively affordable. All the mentioned areas are on solid land and not sand filled or reclaimed. A lot of new estates being built near lagoons and beaches are on sand filled land and care needs to be taken that the developers have carried out the necessary filling of the land and waterproofing of the buildings.

 Areas that need an injection of good quality residential apartments, is Surulere,Akoka, Yaba, Ilupeju, Maryland and Ikeja. At the moment a place like Surulere and its surrounding areas like Itire, Masha etc looks like they are in a confused state of commercialisation. All available single dwelling units on major streets are being converted into banks, eateries, malls, bars etc. It will require someone with vision and a deep pocket to develop some luxury dwellings for the residents give the community back the finesse that it once held, as the rapid overdevelopment of these areas has put severe pressure on its infrastructure and aesthetics with electric cables crisscrossing the roads and buildings haphazardly. Any developer wanting to gentrify these areas will have to buy up and probably demolish what is already there in order to start properly from the foundation up.

New developers are now building town houses, terraces, flats, high rises etc. The days of building one unit on one plot is over and done with. The demands of building multi tenanted units are that residents expect some considerations from the developer, like parking spaces, airconditioner plumbing, fitted kitchens, security gates and external cleaning, generators big enough to supply the whole development instead of individual sets which more than likely will constitute a nuisance to other residents through noise and carbon monoxide pollution.

 If one takes time to look, you will find affordable land and properties that are set to rise in price in the near future

PHCN's DISAPPEARING ACT

I have written about this many times in the past five years but power supply is unfortunately getting worse. Getting access to reasonable supply of electricity by PHCN is getting less and less by the day despite repeated empty government promises and DISCO take over’s. Some areas have not had more than one hours supply in total in the last two weeks. People are spending hundreds of thousands to fuel their generators, just to have some reasonable quality of life, yet are still being hit with astronomically over inflated PHCN bills that do not reflect their supply and meter readings that they have fought so hard over the years to get installed and now the meters are installed, the readings are being ignored?

The country has been promised increased megawatts of power every other day for the last ten years or more. The latest being 10,000mw by the end of July 2014. In the last few years these promises were made by the Power Ministers and went out to privatisation, yet it seems that with each passing day and power report we receive, it is to say that one power station has closed down or a leak was detected in one or another plant. We are urged to be patient, yet it seems nothing is being done apart from blame being thrown about. Apart from a couple of years ago when a former Minister of Power as in charge and we could obviously see some improvements, we are yet to see any benefits of the current privatisation initiative. The current power output stands at about 2,500mw; five years ago it was 3,200mw.

We must however continue to rely on our trusted generators to power our homes and businesses and hope that one fine day we will see stable supply.  Estates must now provide power as part of its services in order to get buyers and renters. Individual home owners must now factor in two or more generators in their budget as well as servicing, fuelling and replacement of the generators. Interestingly, it is reported that Nigeria is the largest importer and user of generator sets in the world. It appears that we may hold this important title for many more years to come.

THE FUTURE IMPACT OF DIVORCE ON HOUSING

On the surface, it does not seem like divorce would cause such a great impact on housing. However, when you think about it a little more closely you start to see how it is already affecting housing provision around the world.  Divorce rates are rising alarmingly and with so many families being split up, it is only logical that more homes need to be provided and also smaller homes. For couples who “manage” to stay together for social or religious reasons, the two of them together are often beneficially greater than either one of them independently. While one of them may have health issues, the other may be strong enough to help with support and medication. In a sense, no matter what the faults or weaknesses, with a two person partnership it is far more likely that the two will be able to live independently in their one home for far longer than if it were just one of them. Once split up, each partner would require a great deal more support which would mean an increase in medical care and finances that could be quite significant and unavailable. It is sometimes pitiful when you visit an old uncle or aunt who used to be very vibrant and mobile back in their day and to see what has become of them now that they are alone living with a houseboy or housegirl or even a distant distant relative who has no real interest in their welfare other than pocketing the money that the kids who are spread far and wide, send home from time to time.  This is a growing problem and in the next few years will reach epidemic proportions. In Nigeria we have not really noticed the impact on housing yet because the older generation still manages to live in their old family homes which are decaying around them with no one to maintain them. Of course immediately they die, the kids sell the property to the highest bidder. If this family home is on a large plot of land in Ikoyi, Victoria Island or Ikeja, you can bet that in an apartment block will be put up in its place

Younger divorced couples are now buying or renting homes and apartments on serviced estates where essential services like security and power are provided, apart from their personal care. In the next few years we may need to consider going the way of other developed countries and building retirement homes for the growing divorced aging population. Abroad the Governments have already taken notice of this increase in divorce rates and have invested in research into understanding the increase as well as preventing its continuation. Many are stating that the UK Government needs to start investing in saving marriages if it has any hopes of keeping its current enviable housing and care system manageable!

Whatever the cause of this increase in divorce, the ramifications are clear; the housing sector will be severely affected should this trend continue. That being said, although Nigeria is not a “welfare friendly” country, it may be wise for the Government to start to look into ways to help ease the growing problem of divorce and its future impact, otherwise there may not be enough resources to sustain the looming housing provision for as long as it will be needed. This growing problem is something that should taken up by media and overall society awareness, especially as our health care system already cannot support all the strains being created simple health demands, not to talk of increasing health issues. In the UK, the Government has tried to ease the pain of home ownership for all by starting “The Help to Buy Mortgage Scheme” which program allows people to buy homes at a much reduced interest rate of something like 3%. It comes in two different varieties. The first of these is the interest-free loan opportunity. The second allows the Government to function as the guarantor for a portion of the borrower’s debt. The mortgage guarantees provided by “Help To Buy” are open to first-time home buyers as well as home movers. The purpose of this part of the program is to help those buyers who do not have enough money to put down as a deposit on their home. If this is the only thing preventing the borrower, the “Help to Buy” program will help to raise enough money for the initial deposit. In Nigeria it is unfortunately a case of “everyman for himself and God for us all” with no Government intervention, unless steps can be taken NOW to redress what is already a growing problem. Even with the rate of construction by private developers, it will not be enough to meet the needs of what is coming ahead. As the say “to be forewarned, is to be forearmed”

LEAVING INHERITANCE PROPERTIES, A DYING TREND

We all know of the tradition of parents leaving properties and large sums of money to their children in their wills when they die? Well it appears that this long held tradition is on its way out in the UK and USA and certainly is spreading to Nigeria. Many parents are still making huge financial contributions to support children and grandchildren even into adulthood due to current financial difficulties.  As people are living longer in many other parts of the world (apart from Nigeria it seems) they are spending more to support their lifestyles and retirement.  Many wealthy over 60s are travelling the world and treating themselves to luxuries they could not afford when they were younger. Bill Gates the owner of Microsoft and one of the wealthiest men in the world has famously said that he intends to spend all of his wealth and give very little or no to his children because he does not want to cripple them as he has already equipped them with good education and training. He wants them to know what it is like to work for their money and achieve their own wealth and have a sense of pride in what they do. Here in Nigeria, we hear so many cases of children fighting for many years after their parents have died, over one house or the inheritance that the parents have left them. Again in Nigeria, we frequently have families where there is more than one wife or numerous children from various women, which makes it a nightmare to share the inheritance left behind. Often you find the first wife trying not to let the children of the other “small” wives get their hands on the man’s inheritance. But it seems this is becoming a thing of the past as the older generation now need to use their money to fund their own retirement.

It is perhaps not something you hear about in the media every day, but statistics show that the divorce rate among retirees (over 50s) is increasing rapidly. Whenever we talk about divorce rates or couples separating, we typically focus on the impact that the divorce will have on the couple’s children. Very rarely do we discuss the impact on the individuals themselves, or on their healthcare and living needs. This is an issue that has been growing for a few years now and is now at a point that requires attention and action to prevent our society fragmenting into copy cat versions of developed societies which are already having problems catering for a rapidly ageing population with no obvious financial means of supporting themselves. Whatever inheritance that would have gone towards children, is now being diverted to cater for the needs of the parents. In the UK the divorce rate for couples over the age of 60 has grown by an amazing 30% just in the last ten years. Furthermore, there has been an increase in the number of elderly over age 75 that are now living alone. In terms of pressure on the care system, this could mean that adult social care costs could increase at a staggering rate, especially if divorce rates continue to increase in the same way they are now.

There is an ongoing argument that children are becoming even more reliant on their parents to help and support them financially for longer. Of course, there are a variety of different schools of thought related to why this is happening. One reason is the decline in our education system, the societal decay and the lack of jobs One thing to keep in mind when discussing the evolving family make up, is that not every parent manages their parental responsibilities in the same way or have the resources to support children or even themselves, and even furthermore, parents can really only do so much to manage how their children react to the everyday struggle of real life. That being said, adult children will essentially live their lives as they see fit, whether it was the way in which they were raised or not. Perhaps one of the biggest things to keep in mind when focusing on how children have grown to be so reliant on parents is the way in which parents now help their children, which is quite different from years and decades passed. The method of helping has certainly evolved and has grown to include much larger expenses and costs. It is no longer just that parents give their children a car for their birthday when they have reached the age old enough to drive. Now, parents seem to be taking financing to a new level. Some parents are even taking on the responsibility of using their own properties as guarantors for mortgages for their children or even giving the children their savings to buy land or property to support them. This is a growing problem

THE RISING GROWTH OF SHOPPING MALLS

There seems to be a rapid increase in the building of shopping and entertainment Malls springing up in Lagos and major cities in Nigeria. They range from large properly constructed malls to small unregulated malls. In Lagos alone we have seen at least twelve large major malls spring up in just a few years and hundreds of smaller ones. On the Lagos Island we previously for many years just had two major malls, Silverbird Galleria and The Palms which came with cinemas and food courts, many smaller shopping outlets like Mega Plaza and Lafayette mall were also trailblazers. Now all of a sudden, everyone is building shopping malls on every little space they can find. Just take a drive along major roads like Adeniran Ogunsanya in Surulere which also houses a large Shoprite, go to Opebi and Allen Avenue in Ikeja, drive along the Lekki expressway and Admiralty Road in Lekki 1, you will be shocked to see how rapidly residential homes are being converted into every kind of mall imaginable. Some of these malls have been so haphazardly converted, that you are unsure what is behind every door unless you enter. The stairways are poorly lit and there is usually insufficient sanitary provision even where there are restaurants. In the major shopping malls I can already see the signs of a breakdown in facility maintenance, like cleanliness of the public spaces and toilets, broken toilets, Air conditioners always not working, poor security, broken floor tiles, blown light bulbs etc. The list is endless. Last year I went to a major mall to watch a film and the air conditioners in the cinema hall was not working, it was like an oven, the toilets were locked because they was no water in the mall. You can never find that happening abroad. Take a trip to the Adeniran Ogunsanya Shoprite mall and you will be shocked to note that this is a recently built mall. It is dark with endless corridors not sign posted and empty. It feels like you are in desolate dark world that you see in Sci-Fi movies. It is really a strange place. Unfortunately a lot of so called “malls” do not have planning permission and have not been constructed/converted according to any architectural plan. The main reason for these malls is purely financial and not longevity, therefore many of them shut down in a couple of years.

Shopping Malls are really modern, indoor version of traditional outdoor marketplaces where we now have lots of different shops clustered together to form a network of shops under one roof.  Malls provide all sorts of convenience like time saving, safety, car parking and a calm environment that smaller shops may not be able to provide. There are a few advantages and disadvantages that need to be taken into consideration. The most noticeable advantage that Shopping Malls provide to the community is the ease of shopping for the consumers. There are usually car parking spaces available, security cameras in almost every shop to ensure that criminals are caught, moreover, there are security guards at every entrance and exits to the Mall in order to maintain a safe environment. In addition the creation of competition in one place can also helps to provide a better range of products and choices for the customers. Shopping malls are usually air-conditioned which is always beneficial from the heat and stress that you get in outdoor market places. The disadvantages are the high rents that some of the larger malls command without the attending customer traffic to buy their goods, leading to a short life span for businesses and loss in profits. Prices also tend to be inflated to take into account the rent, service charge and staff outlay. Malls also encourage people hanging around for needlessly prolonged periods. The security in large malls needs to be really good owing to the large traffic under one roof at any point in time. There can be serious implications if a mall is targeted for criminal activities.

There are lessons to be learned however from America where Mall business started and is such a part of the society there. Unfortunately due to the proliferation of malls in the US some malls in some states there, are being closed down due to lack of customers and are being turned into homes for the community after consultations with community leaders. There were too many malls in close proximity providing more or less the same goods. You can already see that this is happening in some areas here, as you may find that out of twelve shops in a small mall, six are selling clothes albeit different prices and quality, but how many shops will attract customers unless it is already known or a branded name. New areas are daily sprouting new malls and I do not foresee this unchecked growth slowing down anytime soon

PAYMENT OF AGENCY FEES, A CONTENTIOUS ISSUE

Why is it that when it comes to paying Professional fees, whether Agency, Legal or for any service, people seem to develop a deceptive personality?  I cannot count the number of times a client has asked us to find, sell or lease a property for them and after the job is done, has developed all manner of avoidance tactics not to pay the agreed fees. It does not matter how respectable or rich the client is, you still come across these clients performing disappearing acts after the job has been completed. I had a client who wanted to dispose of some family land and approached my company to do this. We shortly after found a buyer, that same evening my client rang to say that he wanted half of our fees, for introducing us to “his family land” but we should not mention this to his wife! I had a meeting in the office the next morning to discuss this development and we agreed that as the fees were quite healthy we would negotiate and give him a percentage. He agreed to this and we proceeded very uneasily. As the buyer was about to close on the transaction in the seller’s offices, the wife of my client summoned me to her office, to tell me that she would only be paying 1% of our fees regardless of what had been agreed in writing at the beginning of the transaction. She said she was just notifying me out of “politeness” To cut a long story short, the buyer overheard all this and decided that they were going to pull out of the purchase as the sellers had shown themselves to be untrustworthy. That was the end of that brief.

On another occasion a Judge called us to view one of our advertised properties, upon getting there, she met the developer who I had worked on many projects with and was a trusted colleague. Whist he was taking us around, she started asking him questions and found out that he knew her family. To my shock, the developer called me a few days later to say that the lady had called him and gone back to the property on her own to persuade him to cut my company out of the picture and deal directly with her! A judge? So who do you trust, when even the legal system is crooked?

Fee paying also seems to turn some other people into greedy opportunists, who expect a huge portion of the fees just because they introduced the brother of the cousin of the person who wants buy the property, to you. Some staff in offices, who have engaged your services to find accommodation for senior staff members, calls you day and night for a cut of your fees even though they are getting paid a salary. An example is a brief we got to find accommodation for some expatriate staff for a multinational company. I started getting calls at 10pm and 11pm from a certain member of staff in their finance department, urging us not to forget him and to remember that “this life is unpredictable and we shall all meet somewhere else so we should always do good”?  This member of staff had nothing to do with the lease transactions other than being aware of it. These calls kept coming in steadily every night for about a week, until I told him that I would sort him out. If you ask the gateman for access to a property, he expects to get a cut in your fees. Even your driver wants a cut, so at the end of day you may end up with hardly anything worthwhile in your pocket. People imagine that realtors, must be raking in tons of money daily and therefore need a share of the fees for doing nothing other than greeting you.

Some Agents also feel that they should collect fees from everyone involved in a transaction, the buyer, the seller, the tenant, the agent and whoever else they can get from without the other party being aware. These types of quack Agents give professional Agents a bad reputation and do not seem to care about the distress they cause to the people they are collecting monies from. It has become a way of life and a culture in Nigeria that everyone wants a cut of your cut, just because they can. If God forbid they are in a position to jeopardise your payments if you don’t give them a cut, then you are in trouble. A messenger in a company demanded a cut from the realtors and ensured that he did not get their cheques delivered to them on the Friday before the banks closed, until he was “sorted out”

As most will testify in this profession, the ears have heard, and the eyes have seen more than the mouth can say

TENANTS LEGAL RIGHTS

A couple of years ago Lagos State brought out a law to protect tenants, The Lagos State Tenancy Law.  The question on many people’s lips today is, is the law working? It is difficult to answer this question as I know that if you speak to ten people, you will get ten different perspectives. I guess that in itself is an answer that the Tenancy Law is not as cohesive as it should be. In my opinion as a property professional, the Law is not being followed to the letter, I guess this is because it is difficult to implement some of the requirements ie collecting only one year’s rent in certain areas and not in others. This creates confusion for landlords and tenants who cannot understand why Lekki should command one year’s rent and Victoria Island, two years. Some landlords, who are paying off mortgages, really cannot afford to take one year’s rent as they need to service their mortgages. Landlords will tell you that if the tenant cannot pay the two years or more rent that he wants, they are welcome to go and look for a property elsewhere that accepts one year payment. The landlord is well within his rights to decline a tenancy as long as monies and an agreement have not been exchanged, which can be tendered as evidence in a court of Law

A Tenancy Agreement must be given to each and every tenant before allocation of a unit of accommodation is made. All laws, rights and obligations must be stated in the Agreement. The Agreement must be read and signed by both the landlord and tenant, and the tenant should receive a copy of the Agreement. Landlords should provide the tenant with sufficient time to read the agreement and raise any questions they have before signing and agreeing to the terms. The landlord is also required to provide the tenant with their full name and address. All tenancy agreements should state the parties involved, the rental price, any deposit retained by the landlord, the property address, the start and end date of the tenancy, and the obligations of the tenant and the landlord.  All tenancy agreements must comply with statutory law. This is law that is enforceable by the judicial system and is therefore legally binding regardless of what is stated in the tenancy agreement. With all tenancy agreements there are rights by law for both landlord and tenant; even though these may not have been discussed between both parties in advance, they apply to all tenancy agreements.

The rate at which court decisions are made for the eviction of illegal occupiers is so slow, as they end up staying rent free for up to a year or more before a judgment is made. There is therefore a lack of confidence in the court system. The Property law is of course open to corruption and unregulated practices when one or all parties involved, try to cut corners. Agents who are mentioned in the Tenancy Law also give the business a bad name by going behind the backs of their main client and collecting fees from both parties. Some landlords will go with whoever closes on the property and not who they appointed and blatantly tell you that they owe no one any allegiance, therefore the property market regulations are really subject to the honesty of those involved in its practices.

A lot of tenants are still not aware of their rights and therefore get bullied by landlords who increase rents without notice or because they have received an offer of higher rent payments or they tell the current tenants to leave the property before their lease expires. If the tenant does not move out or increase the rent to match the offer being given by the landlord, they are asked to leave. Most tenants resort to begging the landlord instead of taking the matter to court. Sometimes Agents capitalise on this by demanding exorbitant fees and higher rent from the tenant in order to assure them of getting a sought after property. The responsibility of carrying out repairs is another area where tenants and landlords are not clear about responsibilities. Some landlords feel that a tenant should take their property in the state of disrepair as it is advertised and fix the repairs themselves. This is wrong! Some tenants carry out all sorts of alterations and works to their rented property without consulting the landlord. Both actions are wrong and can be taken to a court of law for resolution.

What is needed in the property market is closer monitoring of practices and instant enforcement of penalties from the monitoring agencies for those found breaking the law.

IS YOUR RETURN ON INVESTMENT HEALTHY?

Return on Investment (ROI) is very important when calculating profits on your property investments. Real estate return on investment, is a simple way to determine whether any given property purchase will yield a significant profit. Before you start the process of investing, be sure to gather all relevant information, such as what the rent payments, service charge payments, any property costs such as taxes and insurance fees and the original amount of your investment will amount to

A lot of investors set out to buy properties only thinking of the rental income, conveniently forgetting the amount they spent on building or buying the property, forgetting the amounts they spend on purchasing the land, all levy’s and all other charges if on an estate, forgetting the amount spent on putting in fittings in the property and other improvements. Many so called property developers and investors do not realise that they end up spending far more on their properties than what they can gain back in profits for many years to come. The first thing any wise investor should do is determine what their investment gain will be. Unlike profit, an investment gain tells you how much you receive before subtracting expenses. Determine how much you will receive from your investment on an annual basis. I will use a very conservative simple example although it is almost impossible to find good properties for this price in any city in Nigeria. Let us say you make N1.2m rent per year on a property you bought for N10million. The rent is your gains.  Add up all investment-related expenses. For example, if you are required to pay any taxes or insurance, be sure to include these figures. Repair costs are another important factor to consider. Let's say you spend N100k per year in taxes, N50k in insurance and N50k in other expenses. Add these figures together to get your real cost of investment. In this example the total cost of investment totals N200k. Subtract the cost of investment from the investment gain. N1.2m – N200k = N1m. Divide this number by the total cost of your investment. For example, since you bought your investment property for N10m. The calculation would look like this: N1m ÷ N10m =0.10. Convert the decimal into a percentage. In this example, this would be 10 percent. This means that you will receive a 10 percent return on investment each year from your real estate, which is an extremely healthy profit anywhere in the world. Anything over 7% should be aimed for, although many do not achieve the correct figures due to their micalculations.

Some estates along the Lekki Expressway axis sold their units for N24m –N30m about four years ago, these same units are going for N40-N55m today and climbing. As you can see, minus all charges these units have almost doubled in prices giving the owners over 30% ROI without them even lifting a finger. This can be likened to them winning the lottery! If they had bought two or more units, they will be laughing all the way to the bank. Wise investors will reinvest their profits in order to maximise their earnings. I get told all the time that these rapid increases will soon stop as the properties cannot be worth that much, but as a property speculator, I will not say that an investor should not buy or build just because they feel that the price increases will stop. There is a saying that “bricks and mortar” are the best way to save and grow your money anywhere in the world. Even if there is a property slump for a period, it will always appreciate again after a few years if one remains patient. Nigeria’s property boom is relatively new and will continue to grow for many years to come. The UK and the USA have been through many property rises and falls and have always come out of it better than the last. Of course there are some people who are just speculators and want to turn over their investment fast and see property buying and selling as a business. The location you buy in is the most important factor in buying for investment, as you will want the property rented out immediately and permanently, therefore the property will need to be accessible and near  amenities and infrastructure, it helps if it is serviced as well. This is unless you are building your dream country home in a remote part of your home town, where you can indulge your hears desires and have no worries about the property being empty for long periods and not earning an income from it..

Be a wise investor!

CUSTOMER SERVICE IN THE PROPERTY MARKET

This is one area that sadly needs a lot of improvement. With the property market flooded by Agents who have little or no training in Real Estate or even Customer Service, it is inevitable that service given to prospective clients is usually below acceptable standards. I guess the question that springs to mind next is “what acceptable standards?” The Lagos State Government has done a lot to bring some regulation into the property market, but without proper enforcement and provision of information, neither the Agent nor client is equipped to deal with poor service.
Ask any CEO of a company, Managing Director of a bank, manager of an office, telecoms company or even a tailor, and they will tell you how important the customer is to their operations and success. How you define service shapes every interaction you have with your customers/clients. Limited definitions of service based on an exchange of monies for goods or service misses the overall point of customer service. “Service” should provide the customer/client with more than a product or action taken on his/her behalf. It should provide satisfaction. In essence, the customer/client should walk away pleased at the result of the transaction – not just content but actually happy. A happy customer will continue to be a buying customer and a returning customer. Agents seem to think that once just one sale or lease transaction is completed, they are successful. They don’t realise that if the client is happy, he will refer other people to them and maybe even use the same Agent again.
 
Customers, buyers and clients who want to put their hard earned money into property investment will want to pay a fair price for quality service and outcome, and feel satisfied they have paid for a service/product and received what they have paid for in return. They also want someone to take care of them by guiding them in the right direction. They need someone to understand their needs and help answer them. They need someone to hold their hands and walk them through a process. Customer service starts with the ability to listen to the customer and find out through polite questioning what he/she needs or wants. From my experience some clients are unsure of what type of property they want and may give the Agent one specification, which the Agent runs around trying to meet, only to hear that the client as closed a deal on another property that did not match the original specification at all. The Agent therefore needs to have a wide choice of properties around the client’s specification and guide them or suggest other properties that may meet their needs. This requires a skill and thinking “outside the box” which is sadly lacking.
Customer service and contact with a client mean that the client must be heard and his/her problems will not go unanswered or ignored. It also means getting to know your client, his/her likes-dislikes, ideas, background, etc.

The other most important aspect to do is to listen to what the customer is saying. If people do not understand what is motivating the customer, they will not be successful in handling them or finding the right property. Do research on customers, their habits, and what they want and expect.
One common denominator among all companies or organizations that provide good service is the development of a system and attitude promoting customer friendly service. By “customer friendly” this means viewing the customer as the most important part of your job. The cliché, “The customer is always right” is derived from this customer friendly environment.
The two main tasks of successful customer relations are for the Agent to communicate and develop relationships with the client. This does not take a huge effort, but does not happen instantaneously either. Positive dialogue/communication with your customers and developing ongoing relationships with customers/clients are perhaps the two most important qualities to strive for in customer service, even if it is just ringing up from time to time to see how they are or letting them know what’s new on the market.  Agents should remember that good customer service results in consumer satisfaction and return customers and growth in business. Poor customer service, except for monopolistic businesses like PHCN, generally results in consumer dissatisfaction, poor reference, lack of returning customers and diminishing business. What is needed for property professionals is to invest in training for Agents and their staff if they are to maximise their business potential and earn a respected name in the market

RAPID DEVELOPMENT AND CONSTRUCTION ISSUES

I want to share a bit of history with you, seeing as the 70% of population of Lagos is under 35 years old. In 1914, Lagos was chosen as the capital of Nigeria by the British colonial masters and from then onward, the demographic and physical expansion of the city has been so dramatic that by 1960, it had grown into a metropolis with well over 1 million inhabitants, by 1990 it had 7 million inhabitants and the estimate today is between 15-20 million inhabitants. The inhospitable physical environment and the choice of location by the British colonial authorities to develop Lagos as Nigeria's capital are largely accountable for the rapid rate and nature of its land use development. The predominance of swamps and lagoons makes it necessary for large scale land reclamations as a precondition for land use development, while the administrative, industrial, commercial and transport functions in Lagos still make it function as the capital. The past Lagos Executive Development Board (LEDB) dominated land use development for many years and in spite of numerous constraints, the Board succeeded in carrying out extensive swamp reclamations providing residential and industrial estate development. The decision to transfer the capital to Abuja was expected to mitigate the rapid land use development in Lagos, but this has not proved to be the case at all. Above all this is clear evidence that urban planning alone has failed to tackle the growing population and housing needs in Lagos. The geometry of land use in Metropolitan Lagos is gradually changing under the influence of urban renewal and highway development radiating from the inner-city to the neighbouring towns and cities which have attracted new industrial and residential estates are springing up in border areas.

The Lekki Expressway corridor is home to the fastest growing number of construction sites in the whole of Africa and one of the fastest in the world? The rate of construction in this area has been so rapid between 1999 to present, that the whole landscape between Victoria Island and The Lekki Free Trade Zone has been transformed beyond recognition. A lot of reclaimed land has added to the land mass and size. Unfortunately much of this development has been unregulated, giving rise to buildings that have many design faults and will need to be demolished in the near future for safety purposes. The rainy season is here again which exposes a lot of problems with construction development and every year without fail this causes a lot of setbacks to construction works. As I have mentioned repeatedly, this is a good time to rent and buy as it exposes a lot of problems with the property and the surrounding areas. Property and road construction works are usually delayed during the rainy season as sites and access roads get flooded and always need trailer loads of sand and rubble for filling again after the rains have subsided. In many areas gutters overflow into roads, and drains and plumbing in homes get blocked. It must seem like a lost cause to developers who find that their workers also seem to spend more time in the rainy season sleeping and taking time off with illnesses, thereby delaying even further the project completion dates.

Visiting building sites during construction is quite interesting, as you find works are being undertaken at varying speeds depending on the flow of funds available for that project. For some, works have either halted or slowed down considerably. The ones that are continuing are often reviewing their spending on materials and fittings, which in many cases may mean compromising the quality of the finished property. At the best of times it is rare to find a really good finished property, but with frequent cut backs and compromise on materials it is even rarer to find a fairly well finished property. Developers are desperate to complete their projects on time and will often take on artisans through recommendation from a friend, brother or church member without proper checks, resulting in the finishing in a lot of properties being of poor quality; something as simple as fitting light switches is a challenge for some of these artisans they don’t have the right training or tools. Plumbing works is a major concern if done badly, of which I have had terrible personal experience. Shoddy and badly finished works can cause damage the property and cause a life of misery to the inhabitants for many years and possibly forever, so with the proliferation of building construction going on, it is important to ensure building works starts and finishes correctly

THE RISING GROWTH OF SHOPPING MALLS

There seems to be a rapid increase in the building of shopping and entertainment Malls springing up in Lagos and major cities in Nigeria. They range from large properly constructed malls to small unregulated malls. In Lagos alone we have seen at least twelve large major malls spring up in just a few years and hundreds of smaller ones. On the Lagos Island we previously for many years just had two major malls, Silverbird Galleria and The Palms which came with cinemas and food courts, many smaller shopping outlets like Mega Plaza and Lafayette mall were also trailblazers. Now all of a sudden, everyone is building shopping malls on every little space they can find. Just take a drive along major roads like Adeniran Ogunsanya in Surulere which also houses a large Shoprite, go to Opebi and Allen Avenue in Ikeja, drive along the Lekki expressway and Admiralty Road in Lekki 1, you will be shocked to see how rapidly residential homes are being converted into every kind of mall imaginable. Some of these malls have been so haphazardly converted, that you are unsure what is behind every door unless you enter. The stairways are poorly lit and there is usually insufficient sanitary provision even where there are restaurants. In the major shopping malls I can already see the signs of a breakdown in facility maintenance, like cleanliness of the public spaces and toilets, broken toilets, Air conditioners always not working, poor security, broken floor tiles, blown light bulbs etc. The list is endless. Last year I went to a major mall to watch a film and the air conditioners in the cinema hall was not working, it was like an oven, the toilets were locked because they was no water in the mall. You can never find that happening abroad. Take a trip to the Adeniran Ogunsanya Shoprite mall and you will be shocked to note that this is a recently built mall. It is dark with endless corridors not sign posted and empty. It feels like you are in desolate dark world that you see in Sci-Fi movies. It is really a strange place. Unfortunately a lot of so called “malls” do not have planning permission and have not been constructed/converted according to any architectural plan. The main reason for these malls is purely financial and not longevity, therefore many of them shut down in a couple of years.

Shopping Malls are really modern, indoor version of traditional outdoor marketplaces where we now have lots of different shops clustered together to form a network of shops under one roof.  Malls provide all sorts of convenience like time saving, safety, car parking and a calm environment that smaller shops may not be able to provide. There are a few advantages and disadvantages that need to be taken into consideration. The most noticeable advantage that Shopping Malls provide to the community is the ease of shopping for the consumers. There are usually car parking spaces available, security cameras in almost every shop to ensure that criminals are caught, moreover, there are security guards at every entrance and exits to the Mall in order to maintain a safe environment. In addition the creation of competition in one place can also helps to provide a better range of products and choices for the customers. Shopping malls are usually air-conditioned which is always beneficial from the heat and stress that you get in outdoor market places. The disadvantages are the high rents that some of the larger malls command without the attending customer traffic to buy their goods, leading to a short life span for businesses and loss in profits. Prices also tend to be inflated to take into account the rent, service charge and staff outlay. Malls also encourage people hanging around for needlessly prolonged periods. The security in large malls needs to be really good owing to the large traffic under one roof at any point in time. There can be serious implications if a mall is targeted for criminal activities.

There are lessons to be learned however from America where Mall business started and is such a part of the society there. Unfortunately due to the proliferation of malls in the US some malls in some states there, are being closed down due to lack of customers and are being turned into homes for the community after consultations with community leaders. There were too many malls in close proximity providing more or less the same goods. You can already see that this is happening in some areas here, as you may find that out of twelve shops in a small mall, six are selling clothes albeit different prices and quality, but how many shops will attract customers unless it is already known or a branded name. New areas are daily sprouting new malls and I do not foresee this unchecked growth slowing down anytime soon

SINKING SAND OR SOLID HOMES

I am sure most are familiar with the parable of the house built on sand and the one built on rock. It says a house built on sand can never stand as the sand will be washed away from under the house because there is no solid rocky foundation.  If you apply this literally to the amount of property development going on in sand filled areas, it does not look good. A large amount of property construction along the Lekki Expressway axis as well as the coastline of Lagos State is on reclaimed sand filled land. A look at the Eko Atlantic City will reveal how much land has been reclaimed from the sea at a cost of billions of dollars. The Bar beach waters which was on the doorstep of the streets of Victoria Island has been pushed so far back into the sea that you cannot see the ocean anymore, This water that has been pushed back will of course have to find other outlets, so will be redirected to areas that did not have so much water previously. Lagos State coastline has been suffering ocean surges and flooding in the last few years, could this be the reason why? I am not an expert on this issue and am just wondering where all the redirected water will go and if the sand filled land will ever be washed away.  Are we facing a future environmental problem?

The rate of property development along the Lekki Expressway corridor is so rapid that the traffic on the only access road to this axis is gridlocked every morning and evening during rush hour traffic. One of the days last week I decided that instead of sitting in the long traffic jam, I would explore some of the side roads that I very rarely go into. One of these areas was an eye opener, there were beautiful houses and apartments under construction and there was a particular red brick development that would not have looked out of place in London or America. It was beautifully finished both inside and outside, the garden was landscaped to perfection. To be honest it was better than a lot of properties in Ikoyi or Banana Island. The only issue was that the road leading to it as not tarred and gets flooded each time it rains. Most of this area was under water seven years ago. It got me thinking that a one can actually create their own little paradise in an unknown area and this usually encourages other developers to start construction the area. Many people are still focused on living in Lekki1, Victoria island and Ikoyi, not realizing that they could live in a better built property for a quarter of the price, just ten minutes down the road. and still have all the comforts

On some of the newly built estates in Lagos you have nature and human beings co-existing side by side in some sort of imposed harmony. It is not uncommon to find crabs and snakes in people’s gardens, on the roads and even inside the uncompleted houses. I had to take a client to a property on one of these new beautiful developments which has risen out of water, and while waiting outside the estate gates, I had a look around and could have been in a remote village in Oyo or Bayelsa state. There were goats and chickens running around, naked children blissfully happy in their God given skins, untarred dirt roads and bush as far as the eye could see, women cooking on firewood stoves. Yet when you drive through the estate gates, you are transported into another world with evenly laid out plots and houses with landscaped gardens. It is sometimes disconcerting to go from one environment to the other in one second. But the beauty of this type of living is that both communities feed off one another. Local shops are set up in the local communities which cater to the needs of estate community.

Last year a friend abroad had purchased some plots of land on the basis that it had been highly recommended. The plots of land were purchased with the intention of selling them on at a much higher price in a few years when prices should have gone up.  Unfortunately it is proving difficult to get the paperwork and therefore will be difficult to sell on. This is fairly common with land purchased from land owners who are happily cashing in on the demand for land even if on water logged or inaccessible land. The cost of land is going up alarmingly even though one can still get fairly affordable plots of land nearer the Free Trade Zone and the further outside Lagos you go go. Be sure however that you get all the paperwork for the land before exchanging any money.

It will be interesting to watch this trend of land reclamation and see what happens to these homes in ten years time

THE NEED FOR A “REBASED” PROPERTY MARKET

There is a newly found over used word floating around the country at the moment which comes on the heels of our recently discovered very high GDP(Gross Domestic Product). It is called “Rebased”. In the Oxford dictionary the word “rebased” means “establishing a new base level” Since our GDP has found a new improved rebased level. I certainly hope our mortgage rates and housing finance structures can be also “rebased” in the near future. Mortgage rates and property prices at the moment are both too high to be affordable for the general population.

I have recently spotted two new Mortgage banks opening up in Lagos, which is hopefully a pointer that there is an interest in supporting the population in getting better mortgage rates to buy a roof over their heads. Mortgage interest rates still hover between 18% at the lowest and 22%, which is still much too high for comfortable payback on any loan, and does not make any real common sense! Why take a loan of N10million over 5 years, and have to pay back N2m in interest every year, without even paying off anything on the principal loan itself?  It is widely written how Nigeria now has the highest GDP in the whole of Africa surpassing South Africa for the first time even though we have also been internationally rated as one of the poorest countries in the world where over 70% of our population live in poverty conditions and can hardly afford one square meal a day. Between 1980 and 1996 the country’s poverty level rose from 28% to over 70%. High GDP anywhere else in the world usually translates into fair/good living conditions and access to housing and infrastructure, but as we can all see, this has not yet been passed on to the general population in Nigeria. It therefore appears that there is some sort of disconnect which needs to be rectified. Hopefully this will be done partly by recognising the need for affordable mortgage finance and homes. In Lagos state alone there is allegedly a housing shortage of over two million homes. I must in all fairness recognize the Lagos State Governor who is already doing something to rectify the shortage quite successfully under his administration with the HOMS scheme which provides low cost homes at affordable mortgage rates. We need many more of these schemes in the state and country as a whole. Most private developers now work out payment plans with buyers which suits both parties better due to the unaffordable high mortgage rates available from banks and private mortgage institutions

The recently concluded Lagos State Economic Summit Conference (Ehingbeti) covered the need for affordable housing, but agreed that this was not achievable without stable electricity supply! The Power Minister addressed the appalling power situation and stated that the country as a whole should not expect improved power supply anytime soon due to the ageing and decrepit power infrastructure that is currently in place and cannot adequately transmit the available power. The growing unstable power supply has slowed the country’s real estate growth enormously due to the inability for our industries to manufacture cheaper home grown building materials like tiles, plumbing and electric fittings, sanitary wares, light fittings etc. A lot of developers choose to buy materials from China and Europe, adding to the cost of the property which is already out of the reach of most people. As more and more developers are building apartments and multi storey units to maximise their costs, the Lagos State Government has put a limit on the number of floors for residential buildings outside of Ikoyi and VI at four floors only. Anything four floors and above will need lifts and the unstable power supply makes this unachievable for low cost to medium cost developments and buyers. Getting electricity alone right, would see an immediate improvement in all aspects of the economy including housing and standard of living. Housing provision is not just a private developer responsibility, but must involve all aspects of government, federal, state and local, to ensure quality affordable homes are provided under regulated standards. I know it is a lot to ask right now, but it is achievable if small steps are undertaken by all sectors to ensure that the next few years show some transformational growth in the much needed property market

DON’T FORGET THE SERVICE CHARGE

A lot of people want to live on serviced estates but fail to realise that the estate needs extra funds apart from the rent in order to run the estate properly. Many conveniently forget to pay their charges after the first few times. Service charges can be expensive and can vary from N200,000 per year on medium income estates to N2.5million a year in highbrow areas like Ikoyi and Banana Island. The most common services can include general repairs and maintenance, cleaning of the communal areas like the roads, compounds and staircases, paying for the security, even if it is a mallam, also paying for the maintenance of the boreholes and water treatment. Residents can usually get away with paying minimal service charges for just the above mentioned services only. When residents expect swimming pools, gyms, tennis courts, club houses and 24 hours power, air-conditioners etc they must expect to pay heftily for these.The service charge is usually an estimate prepared each year of the running costs of the development. These could include for example Landscape Maintenance – from cutting the grass, maintaining communal gardens, watering and sweeping. This is particularly important in multi tenanted developments and those with commercial properties such as bars, restaurants or retail outlets that have communal areas accessible to non-residents. For high rise blocks of luxury flats, window cleaning would typically include all external windows as well as internal windows in communal areas. Lift Maintenance is another service that would require huge payments for servicing and repairs. Fire Equipment Maintenance in high rise blocks of apartments, offices and leisure facilities need to be installed and serviced regularly which adds to the charges. Buildings Insurance – in the case of apartments, full buildings insurance is required under the terms of the lease to cover the risks relevant to the development. Standard insurance risks might include fire, explosion, flood, sprinkler leakage, subsidence etc. Audit fees, management fee and salaries of all onsite staff must be factored into charges. Most estates in high brow areas are rented to multinational companies who pay rent and service charges three to five years in advance so it is easier to manage their services.

Service charges are typically paid monthly, but on some estates, commercial and leisure facilities; this is requested in six monthly intervals or yearly, to prevent nonpayment from residents. Even with these steps in place, it is common to get residents who will not pay or challenge the authenticity of the bills they are presented with. This can cause a breakdown in service provision as service provision must be continuous and if some do not pay the ones who pay will have to cover those that have not paid. It is therefore wise for the service providers to ensure a quarterly or bi yearly audit of service costs and present this to all residents individually and at Residents meetings. Services should as much as possible be collected in advance

Diesel amounts are best paid separately from service charges to prevent confusion with the two amounts. Diesel is usually on an as used basis and can vary from week to week depending on consumption and price, so auditing of diesel amounts needs to be accurate and detailed. Unless the estate provides prepaid meters that run on a fixed amount for both PHCN and generators power, it is usually a battle to get diesel payments from residents. A number of large estates have installed prepaid meters in individual home as a fixed amount per kilowatt hour. The residents are usually made aware of this when buying or signing up to their tenancy, so there is no dispute about the amounts later into the tenancy. On a particularly large estate in Victoria island, Service Charges has been a major source of dispute between the residents and the Management Company overseeing the provision of the services. Diesel and Service Charge amounts and have increased many times since inception, causing residents to challenge the amounts and services. This has become so bad that both parties have instituted legal action against one another. On another smaller estate in Lekki, service provision has broken down completely due to nonpayment of charges from some residents. The communal generator has stopped running and all the residents now have individual generators in their flats and terraces.  The borehole has not been serviced for months, a mallam now opens and closes the gates. Residents are not happy but realise that unless they all agree to pay collectively for the services and the staff, they will not enjoy living on the estate.

Service charges need to be factored into the rent and household budget in order to cope with the added costs of living on a serviced estate

LEARNING LESSONS FROM FOREIGN HOUSING MARKETS

The Nigerian housing market to all intents and purposes is an evolving market. It is evolving within an unstructured framework as there are no real working laws and regulations to cover the whole property industry. The few laws and regulations that have been put in place are not strictly enforced with no proper monitoring structure in place. I guess if we were to analyse this industry properly we will find that the problems with the property and building industry as with a lot of other industries is largely due to the lack of importance placed on legislation, weak enforcement and the mindset of the people. I believe that if these can be taken care of, then we will see proper working structures enhancing and growing the property market.

In the UK, before you do anything, there are laid down processes to follow and swift penalties if these are breached. Everyone there knows this, the laws are available and known to all, builders, artisans and users all have a duty to understand the law before they start work. The Developer and Estate Agent have a duty to let the client know what their rights are and how they are covered by their purchase. Everything is transparent and regulated from the price of building materials, salaries and house prices. House prices abroad in a certain area and of a certain size commands roughly the same price in sales and rent despite the finishing and decoration, but here in Nigeria, it is not unusual to find a three bedroom apartment in Lekki1 selling for N50m and a similar apartment next door asking for N70m because  the landlord used Dulux paint!  As there are so many ”developers” and landlords now in the property market who were previously into other professions but have some money in the bank and want to maximise their income, the property market seems to be the most lucrative at present. There is a lack of adequate training for many of these new fortune seekers who do not know how to select Surveyors, Architects and builders or know the difference between them. As a result we have some terribly built properties on the market that are sold to innocent investors who sooner or later will count their losses or spend many more millions bringing the property up to some decent liveable standard. In some unfortunate circumstances, these properties are rented out for two years or more and the tenants left to do all the repair works. The Lagos Tenancy Law has provisions to protect tenants from unscrupulous landlords, but not many tenants are still aware of this or how to start the legal process.

Many countries like America, Asia, Dubai, parts of Europe and the UK have gone through their own housing boom and crash and have developed robust systems for monitoring and controlling their systems. Maybe we need to go through our own unique mistakes to learn what works for us instead of just copying and pasting their own structures which are so inherently different from ours.

TO BE AN ESTATE AGENT IS TO BE A HUSTLER..

You might look at the above title of this article and wonder how that came about? But seriously if you think about it, Estate Agents have to understand when and where there is a market and who to target. An estate Agent may show ten clients twenty properties in a week spending 30+ working hours, and not sell or let any. The job is not as financially rewarding as many may think although if you do strike it lucky you may pocket in one day what you have struggled two years to make. You have to be persistent, you have to be patient, you have to have a thick skin, to be smart, intuitive and have a hustlers mind. It is not a job for anyone who does not like “wahala” because sometimes the “wahala” knocks you on the head when you are least prepared for it.

For example, recently a fellow Estate Agent I know received a brief from his “friend” to find some office space on the Island for a US based company that wanted to set up in Lagos. The friend gave him specific details of floor plan requirements and price range. All this was done over the phone with nothing in writing. The Estate Agent set out to get all the information he could on luxury office spaces in VI, Ikoyi and Lekki. This took about a week to get all the information together. He asked his friend to instruct his company in writing, but nothing was sent. He went ahead to send his friend the information he had gathered, only for the friend to say that the company only wanted old Ikoyi. You might wonder what role the friend who was sitting back and sending the Estate Agent running all over the place would take in all this. The friend had instructed at least three other Agents without any of them being aware of the other.  The fact that nothing was put in writing should have been an indicator that this brief may not be straightforward.  The Agent went back to look for suitable properties in old Ikoyi and found four that he sent to his friend. The friend took the property list and instructed one of the other Agents to double check and shortlisted to one property which an offer was made on. The lease was accepted and signed for 5 years without the first Agent knowing. His friend pocketed the fees which came to almost half a million USD and gave the second Agent one million naira.  Meanwhile the first Agent waited to hear from his friend and when he did not hear anything after a month, rang his friend who did not take or return his calls, so he rang up the management companies of all the shortlisted properties and found out that his “friend” had closed the deal on one of them and the property was now occupied by the US company.

His “friend” will not talk to him so he is considering legal action but has been advised that there is no evidence to prove his allegations so will more likely not have a case in court. What can he do? This is the brutal world of Estate Agents that many do not see

CAN A HOUSE BUILT ON SAND STAND?

I do not aim to preach to anyone, but I am sure most are familiar with the parable of the house built on sand and the one built on rock. It says a house built on sand can never stand as the sand will be washed away from under the house because there is no proper foundation.  If you apply this literally to the amount of property development going on in sand filled areas, it does not look good. A great number of property constructions along the Lekki axis as well as the coastline of Lagos State is on reclaimed sand filled land. A look at the Eko Atlantic City will reveal how much land has been reclaimed from the sea at a cost of billions of dollars. More billions of dollars will be poured into developing it into a world class mega city. The Bar beach waves which was on the doorstep of the streets of Victoria Island has been pushed so far back into the sea that you cannot see the sea anymore. The water that has been pushed back will of course have to find other outlets, so will be redirected to areas that did not have so much water previously. Lagos State coastline has been suffering ocean surges and flooding in the last few years, could this be the reason why? I am not an expert on this issue and am just wondering where all the redirected water will go and if the sand filled land will ever be washed away?

During the week, the traffic on the Lekki Expressway was terrible due to long queues at petrol stations. On one of these days I decided that instead of sitting in the traffic jam, I would explore some of the side roads that I very rarely go into. One of these areas called Idado was an eye opener, there were beautiful houses and apartments under construction and there was a particular red brick development that would not have looked out of place in London or America. It was beautifully finished both inside and outside, the garden was landscaped to perfection. To be honest it was better than a lot of properties in Ikoyi or Banana Island. The only issue was that the road leading to it as not tarred. It got me thinking that a one can actually create their own little paradise in an unknown area and this would encourage other developers to build similar types of properties in the area. Many people are still focused on living in Lekki1, Victoria island and Ikoyi, not realizing that they could live in a better built property for a quarter of the price, just ten minutes down the road and still have all the comforts of 24hours electricity, clean running water and excellent security.

 

OUR DISAPPEARING AND APPEARING LANDSCAPE

The landscape around us, especially on the Lagos Island is a daily disappearing and transforming event. The land along the Alpha beach and Eleko beach area is disappearing at an alarming rate. A colleague, who used to jog along the beach at Alpha beach six months ago, says that stretch of beach has now vanished. The waves from the ocean are hitting the barriers that separated the beach from the residential areas and now flooding the roads in that area. This is a hidden growing environmental disaster that no one is talking about. Let us for a minute forget the ocean erosion, let us examine the rate at which land is being sand filled and developed. The Lagoon along Osborne/Third Mainland bridge area has almost fully disappeared over the last ten years. Estates like Osborne Foreshore 1 and 2 have sprung up and more developments are planned further along the Lagoon shores.  In high end areas like Ikoyi, Parkview and Banana Island, you will find so much land reclamation going on and luxury developments springing up. The once famous Ikoyi Park is gone, giving rise to Parkview Estate. Banana Island came out of the sea and now provides homes for some of the wealthiest Nigerians and multinational companies. On Banana Island you will find Ocean Parade Apartments which is one of the most expensive pieces of real estate anywhere in the world. Apartments here can go for N200 million, which is almost $1.5million.  Not many people can afford to spend this amount on a property, yet the apartments are being snapped up quite quickly both for private us and as investment, of course it provides everything from central air conditioning, gyms, tennis and squash courts and swimming pool.  If you travel to Victoria Island’s Bar Beach Road, you will notice that the Beach has disappeared and will be giving way to mega luxury high rises in the next few years. In Oniru Estate which was previously a poor wasteland called Maroko where the people living in shacks were driven out, the land was sand filled further and is now sold for about N150 million per plot. Further along the Lekki Axis, you find that both sides of the Expressway are being rapidly filled up with new estates and businesses and giving rise to new areas springing out of the Lagoon and bush. Some of these areas were well known fishing and hunting grounds for hunters and villagers until a few years ago when developers started offering millions of naira for plots in the lagoon! Ten years ago you could buy a plot of land in Elegushi, Osapa, Agungi and Chevron for less than N500k, today those same plots for between N40-N100m. Just two years ago, you could buy a plot for N15million in these areas. No one is interested in building single homes on these over inflated priced lots of land. The areas are full of apartments, high rises, townhouses and quadruplexes with no gardens and almost no parking spaces inside the compounds. One thing that is obvious about all these new developments is that they are all sited behind high fences, high gates, electric barbed wire and all manner of security measures. Residents now demand tight security in their homes. You find estates within estates and self contained estates where power, clean running water, paved roads, manned security and other services provided. There is hardly any need now for residents to go outside their estates apart from for work or visiting. The whole environment has changed and is still changing beyond recognition