17 Mar 5 SCAMS By Property and Real Estate Companies in LAGOS, Nigeria
Everyone now is prefers to buy a property from Real Estate Companies in Lagos, because they want to invest right and not lose their money.
Before the emergence of property and real estate companies in Lagos, there were several reports by several Nigerians here and abroad. On the different menace they experienced when they bought a property in Lagos from a family or community.
Some bought land and find it hard to build on the land, while some years after, they realized they just bought a Government land and were forced to evacuate.
Starting from 2009, with the Lekki boom, then rise of Ibeju-Lekki, private companies in Lagos started venturing into the real estate space. They started acquiring and selling land and houses, to investors both in Nigeria and in diaspora.
Thereby, providing a more transparent and accountable process of investing and buying real estate in Lagos, and transforming places like Epe, Ibeju-Lekki and Mowe.
Several estates started springing up in places like Simawa, Ajah, Sangotedo, Chevron and Lugbe in Abuja.
This switch from buying a property from communities to buying from a real estate company, and the rapid urbanization of places like Ibeju-Lekki, Epe, Mowe etc set a trend. This trend attracted a lot of investors particularly Nigerians abroad into finally tapping into the opportunities of the Lagos property market.
However, things weren’t rosy for long, as the Nigeria real estate industry started blooming, more private companies started springing up.
These companies started as property developers, estate developers, builders etc thereby saturating the real estate sector. With a lack of a strict regulatory body, that will provide guidelines to the operations of these private companies.
It was only a matter of time, before some real estate companies in Lagos. Started to create the same problem they were meant to solve and started scamming innocent Nigerians.
There are still reputable property companies in Nigeria, that have created a trademark for prompt delivery, property security and transparency. But, to save a lot of Nigerians ,particularly those in diaspora, from falling into the wrong hands.
We will be sharing 5 ways some fraudulent property and real estate companies in Lagos, use to scam people through buying or investing in real estate.
1) Overselling
This might sound a bit strange to you, but some estate companies in Lagos, in the name of selling land in an estate, sell more than what is available.
It is strange but true, and some popular property companies in Lagos, are also involved in this property scam.
For example, after these private real estate companies launch a new estate with a given name and price. The land is divided by an estate surveyor into 500sqm/600sqm for full plot and 250sqm/300sqm for half plot.
But because of greediness, some Lagos estate companies continue selling even when all these plots of land are fully bought. So, if they have sold beyond what they have, how do their customers get their land?.
It’s simple, the estate companies usually solve this, at times by launching a phase 2 and delaying allocation.
Since most Nigerians buy land in Lagos and just leave it for years, and most investors have a sense of security, when they buy a property from an estate company. Some investors don’t bother asking for allocation.
Eventually, when buyers need their land, the Lagos property company can write, stating that because of some charges or fees that were not paid. The investor can’t get allocated at phase 1 any longer, but at phase 2 or phase 3.
Solution:
Whenever you buy any property from a real estate company in Lagos, always ask for a physical allocation of your property and get an allocation paper from them as a legal backing.
Don’t delay it, and don’t just be rest assured because you bought a property from an estate company, tell them to show you your exact slot of the land or house you paid for.
2) Fake Title Documents
Fake papers is a common scam in Nigeria, so it’s unsurprising it has trickled into the real estate industry too. It is important to perform a search when you want to buy any land in Lagos.
But, what if the land papers that were given to you to search with, are even fake?, it means the search results will be fake too.
It has become widespread, from some fraudulent property companies, to share fake coordinates of their estate just to deceive buyers.
Some of these lands or estates, does not have the titles, they were advertised with e.g. C of O, Approved Excision, Gazette, R of O etc. What some of these fraudulent property companies in Lagos do, is to find a coordinate around the same location where their estate is situated.
Then, the coordinate which belong to another property with good title, will be shared and given out to buyers to verify.
Unknown Nigerians will fall for it and buy this property, only to realize years later, they have just been scammed.
Solution:
Buy from reputable property companies in Nigeria only, don’t buy from anyhow company without a solid brand reputation, ask for how long the real estate company have been in operation and the number of estates they have.
In addition, if possible, visit some of the other estates they have just to be sure they have a good reputation, some of these property companies would only exist for 2years and then disappear, all those that bought their property are left to their fate.
Document in view or in process
Several estate land in Lagos are selling with a document in view or in process, it’s always in the advert fliers and write up. You will see something like C of O in view, Excision in process etc.
But how through is it?, the land documentation process in Lagos is not easy, processing of land titles in Ministry of Land, Alausa, Ikeja can take weeks or years. So, some estate companies in Lagos truly applied for this document and is in process as advertised.
However, this has also become a scam opportunity for some Lagos real estate companies. Some companies don’t apply at all, or just start the initial application only, then abandon the application.
Incomplete land title application in Lagos is a big risk, and it might be innocent buyers of this land that will take the brunt .
Hidden Charges and fees
Some people avoid buying an estate property in Lagos, because of the other fees they will have to pay. Some investors feel these fees are too high.
However, these other fees known as statutory fees are applicable either you buy inside an estate or not. Survey and Legal fees applies to all land transactions, either you buy from Omonile or in an estate.
Apart from the usual statutory fees of survey, legal and so on, property companies in Lagos still include some scary default charges in their contracts. Some developers charge very high administrative fees for a refund.
Moreso, some Lagos estate developers use terms like “to be determined later” to milk buyers. Because this fee when eventually charged, can even be 50% of the amount of the property.
No Allocation
Several estates in Lagos are advertised with “instant allocation”, meaning when you pay, you’re shown your land instantly. But, estate developers would require you pay the Legal and survey fees, before they allocate you.
They are right, there is no reason why a property should be allocated when it’s not yet legally yours. Despite paying for the survey and legal fees, some real estate companies in Lagos, still delay allocation.
As I explained above, when allocation is delayed, it’s a scam opportunity for a real estate company, to sell more than the land available in the estate.
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