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

A FOREIGNERS VIEW OF LAGOS

I attended a conference during recently where I met a delegation from Cape Verde island which is a small relatively unknown island surrounded by water just off the coast of West Africa by Gambia, They were in Lagos to seek investment in their growing property and tourism market. Although they only have a population of about two million people, they are aiming to be the next Dubai in terms of property and tourism development. Their population has 97% literacy rate and their standard of living is very high. Their minimum wage is set at about $140 per month, which in naira is about N23,000.00 This is for a country that does not have electricity or transport issues or any other major issues to spend their money on. They have four international airports which meets international standard, which brings me back to the point of this article. I was talking to one of the delegates who told me that he was shocked by the standard and state of our MMI Airport. This is his comment in full “For a country the size and wealth of Nigeria, the condition of the airport is shocking! I have travelled all over the world and the airport here in Lagos is the worst I have seen anywhere. It is not good for the image or reputation of the country”

I am sure you are also feeling the shame I felt. For an outsider visiting Nigeria, a country he has heard so much about and looked up to for the first time with high expectation, it is indeed a shame to hear this, and he is no way alone in his views, some are just too polite to tell us. However we must be honest with ourselves. The Airport and infrastructure all around is not a pleasant welcome into Lagos. I have written about this so many times over the years, yet it just seems to get worse. These are so called “small” countries coming to look to their “big brother” for money and advice to develop their country further, yet we are unable to provide the same in our own country. Cape Verde is already rich in almost every aspect of their economy but still want to grow further. Maybe Nigeria should visit Cape Verde and learn some lessons from them.

I also gathered some interesting facts on our own population and property market which is fascinating. It is reported that the population in Nigeria is now between 170-190 million and over 90 million are under the age of twenty. What this shows is that even though there is already a critical shortage of housing for those who can afford it, there are millions of young people still living with mum and dad who will in the near future need their own homes. Therefore there is going to be a massive demand for land and housing in years to come. There will also be a growing demand for infrastructure like roads, hospitals schools and shopping outlets to support the population. A city like Johannesburg has 2.1million people yet has 74 Shopping centres. Lagos has a population of over 10 million, yet only has 16 Malls/Shopping centres. Lagos as the capital is growing so fast, that demand in most areas will outstrip supply. For the housing industry this means that there is room for so many more developers to make their mark in providing affordable accommodation. There is an oversupply of high end accommodation already, many of which sit empty for months or years. So for wannabe developers, start working on your business plans!

PROPERTY MARKET SPECULATION

There are so many views on the property market. I was speaking to a property professional, who is of the opinion that the market has remained the same as last year; another says it is picking up. I personally believe that it is all a risk and you just have to take the plunge whenever you feel comfortable to do so. Banks should inject some mortgage incentives into the property market and reduce the high interest rates which are being charged at the moment, the conditions that also come with them are unrealistic. This high pay back rate is precisely the reason why so many people fail to take out mortgages or to make their existing repayments.

I was surprised to see a block of flats in Ikoyi back on the market after I had been told earlier this year that it had been taken by a corporate client. Apparently the client promised to take all the 6 units if the landlord carried out some remedial works to the apartments before they moved in. The landlord proceeded with the works, and then the clients decided they did not want the apartments anymore! After a prolonged battle with the clients, the landlord had to put the properties back on the market. Landlords should never proceed with extra works requested by clients unless a commitment has been made in writing and a deposit paid. I have also noticed a trend of new developers excluding boys quarters in their properties and instead build an extra room within the house, which is referred to as ‘the maids room’ or provide nothing at all. This can be quite limiting if you have staff as there is the lack of privacy on both sides as well as having to install extra security in the house because you have a stranger living with you. It helps when you have a BQ outside the house as drivers etc may need to use the bathroom or sleep over if they have been working late or you travel.

I must mention that on the Lekki Expressway, though the VGC roundabout has opened wich is a blessing for the residents, the entrance into Ikota Shopping centre has been removed, creating a bottleneck of traffic. People going to Ikota shopping centre now have to go all the way to Ajah roundabout, which for some strange reason is always gridlocked even though it is always fully manned by traffic police, and have to turn back round at the roundabout to come back all the way to Ikota, wasting so much time. It is unreasonable that VGC residents who need to shop in Ikota, which is a few yards away from their gate, have to take a trip all the way to Ajah first! The road works being carried out by LCC has caused misery to the lives of Lekki residents for years and seems to be getting worse. I will admit that some parts of the road have improved, but it is safe to say that the works remain uncoordinated. As for the toll gates, that is a chapter for another day!

EKO ATLANTIC MEGA CITY FUTURISTIC PLAN

I am sure we all remember Bar Beach and either going for day outs there or just viewing it from the Ahmadu Bello coastal Road which ran along the beach front. We all knew just a few years ago when the waves from the beach flooded the roads and buildings in the surrounding areas. Well, the beach has totally disappeared, I mean TOTALLY. I was driven two miles unto the newly reclaimed sand filled land, where the ocean waves recently surged. It was an unbelievable surreal experience, I literally felt sea sick. A year ago you could see the ocean a few yards away, now it has been sand filled two miles into the sea and will be filled six miles along the coast line. It is a real ongoing transformational miracle of this generation. 

 Lagos State is more than a fifth covered in water with Lagoons all around with prime land like Victoria Island sitting at the edge of the Atlantic Ocean. The former governor of Lagos State when he was in power was worried about the sea eroding the island’s coastline which lay above sea level, and businesses along the coastal highway being regularly flooded. He enlisted the Lebanese-Nigerian property developer G Chagoury of Nigeria’s Chagoury Group in 2003/2004, to reclaim land from the ocean and put up a sea wall along the island’s original coastline. The newly reclaimed land between the former shore and the new wall will eventually be a total of ten square kilometers. Luxury apartments, retail outlets, skyscrapers with businesses, parks, and a man-made marina providing accommodation selling from $600,000 off plan for more than two hundred and fifty thousand super wealthy residents will be built on this reclaimed land. This is a multi-billion-dollar project which also includes plans to build the tallest building in Africa, sixty floors high. The irony of all this is that Victoria Island which adjoins this Mega City is no longer properly maintained. There is inadequate parking facilities and failing infrastructure with the over development of commercial businesses. The original master plan has not been maintained which was for VI being a residential area only. This is the access area to our future Mega City!

What cannot be ignored is that with the daily increase in population in Lagos, there will be the need for regeneration of more areas and accommodation at much more affordable prices. Ninety eight per cent of the population in Lagos will not be able to afford to live in the Mega City. Where will the houseboys, cooks, drivers etc live if accommodation cannot be provided for them on this gold mine? Whilst our current Governor has done so much to improve the lives of the residents, much more still needs to be done, he cannot do it alone and will need investors who have the vision and means to improve the city. Roads are still bad, schools and hospitals falling apart, erosion eating out the coastline  and damaging homes along the Lekki Expressway which seems to be increasing alarmingly since sand filling works started.

Looking at the Eko Atlantic Project on paper now seems like futuristic dream that will unravel between now and 2020. I guess if Dubai can do it, then just maybe Lagos can? Maintenance will need to be first class priority

RESIDENT LANDLORD

I came across an incident the other day in which a property owner had a house that was too big for him to live in alone whilst his family was abroad and rented out part of it to a manager in one of the banks on the Island. He did this on a gentleman’s agreement for one year and felt there was no need to put anything in writing as it may offend the banker who he felt lucky to have found. At the expiry of the agreement, the banker refused to leave even though the owners family was due to return, the owner thought that if he gave him an extra month rent free, he would leave at the end of that month. Unfortunately the banker has refused to move and the owner is now stuck as he has no legal redress and cannot throw him out

If you are the owner of a property and decide to rent a part of your home to a tenant, the legal situation in terms of the tenancy is quite different to that which governs and assured or shorthold tenancies. If the tenant does not have exclusive use of the property, it usually means that they will have a 'license to occupy' the property. You should still sign a legally binding agreement with the tenant, but this will not be a standard tenancy agreement. The document should be a licence that specifies that the landlord has the legal right to unrestricted access to the occupant's property, It may turn out that he never goes in there, but he will retain the right to for such activities such as repairs or decoration.

Licenses to occupy also usually replace other types of tenancy ie for mini flats within houses. The internal arrangements of the property may mean that you do not share any portion of the accommodation with the tenant, but the tenancy will still be legally seen as a license, it is normally no problem for the tenant to extend the term of the license agreement, but make sure that you renew the agreement in writing. If you are using a lettings agent, there will normally be a renewal fee and you will also have to pay lettings agent fees again. A written document makes it very much easier to sort out any disputes that occur. If you do not have a written tenancy agreement, you are obliged by law to provide the tenant within the main terms of the tenancy in writing within 28 days of their requesting it. This includes the start date, expiry date, amount and frequency of rent payments and rent review arrangements. It is usually best to get a tailored tenancy agreement drawn up. This will make sure that it addresses any issues that are specific to the property

If you are a little more confident in your understanding of legal documents, you can use a standard tenancy agreement and remove any unnecessary clauses or add any additional ones that are required. The agreement can be modified to cover the specific needs of your property - garden maintenance, pets, security and so on.The agreement that you draw up should always include a clause that permits you to take back possession of the property if the tenant does not pay the rent or is in any other way in breach of the contract. The tenancy agreement should be signed by both tenant and landlord, although a lettings agent can sign it on his behalf.

RECHARGE CARD OFFER

As the popular saying goes “wonders shall never cease” when I think I have seen and heard it all, something always crops up to surprise me. During the week I had a viewing request from an estate agent colleague for one of his clients. I agreed to meet them at the property, only to get there and he said the client was running late. After a few minutes, he rang to say the client had already viewed the property the day before and was in the process of negotiating with the estate managers!  He said his client was offering to send me phone recharge cards as an apology for wasting my time…Words failed me but I actually found it very funny! I did tell my colleague I had to write about it even though he begged me not to.

On Monday 30^th September 2013 six of the new private electricity investor companies and nine distribution companies were awarded certificates by the Federal Government to commence works immediately. What this potentially means for millions of Nigerians is “hope” that our homes, businesses and lives will be improved. In reality power generation has never been worse; most areas in Lagos have little or no electricity. The task ahead for these new private companies is daunting. I read that things will get worse (if that is possible) before we see any improvements. God help us all.

It will be interesting if an analysis is done on our property market from Independence to date, which is 53 years of market research. I am sure we will see major changes in the last thirty years and in particular in the last ten years. In Lagos alone where we have seen the population rise from 7million just fifteen years ago, to over 17 million today. Nowhere is it more evident that there is a shortage of affordable housing, than in Lagos State where prices are over inflated yet massively in demand. On the topic of demand, an International property internet company has set up shop in Lagos on the Island. Of course they know there is money to be minted in Lagos and there is a gap in our internet presence, so they have moved in. I visited their offices and was amazed at the set up, it was like being in Silicone Valley, rows and rows of people at desks in open plan offices, both Nigerian and foreign, running various online companies with head offices in France and Belgium. It brought to mind the incongruity of Nigeria importing oil when we already have oil...The property company is aiming to hit Nigeria and the world with a sledgehammer, they want property companies and owners to pay them vast sums of money to advertise their properties, the only problem is that property companies do not get paid by property owners to take on properties, so how can you justify paying an internet company thousands of naira to advertise properties that you have no guaranty of selling or letting out through your company, when everyone knows that property owners place their properties with as many agents as they can, to maximize coverage. So, as you can see there appears to be a loophole here. The Nigerian market unfortunately does not follow any laid down rules. They however seem to be doing a good job of advertising and getting good quality properties on their site. They have the money and the international backing to make a difference, something that a lot of small property companies in Lagos do not have, so, are we a dying breed?