The low standard in estate agency as being currently practised in the country, if not checked, can result in a great economic decline for the practitioners. It is believed that this lack of standardised practice explains why Nigerian estate agents are not getting good deals, especially from international companies.
Source: The Nation
“Can any of you here claim he is managing any outlet in Shoprite, or in any other multinational facility? Except you improve and up your standard, you will never play in the big league of estate agency. The best of transactions now are going to multinationals,” said Tope Ojo, guest lecturer at the Lagos State Real Estate Transaction Department (LASRETRAD) stakeholders’ conference, held in Alausa, Ikeja, last week.
The theme of the conference was “Standardising Real Estate Agency Practice in Lagos State.”
According to Ojo, there is an urgent need for the review of certain provisions of the law governing estate agency in the state and country. For instance, he explained that under the Lagos State Estate Agency Regulatory Authority Law 2007, the practice is open to anybody from the age of 18 years, including having a minimum of educational qualification of secondary school leaving certificate or a proof of sufficient experience in estate agency practice.
Other requirements under this law include evidence of registration of estate agency business under Companies and Allied Matters Act (CAMA), including but not mandatorily being a member of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) or any other professionally recognised body or any registered association of Estate/rent/commission agent.
However, the guest lecturer criticised the 18-year-old clause, arguing that it is very unlikely that any investor will be willing to hand over a N50 million asset to an estate agent of that age to manage on his behalf.
Ojo regretted that the features of estate agency practice in the country are characterised by lack of adequate regulatory framework; free entry/ free exist, which requires no training nor certification; and are laden with high market risk. Others, he said, include small size of offices; lack of information the on transaction; poor public perception; large presence of non-professionals; unorganised market; multiplicity of local agents association; fraudulent transaction; lack of standardisation; and largely unregulated. These features, makes the profession have perception issues among the public.
Proffering solution, Ojo, therefore, called for a national/state body; effective regulatory framework; establishment of a licensing authority that will register all certified estate agents; professional indemnity by way of insurance of estate agents.
There should also be categorisation of licensed estate agents into principals and ordinary agents, including the creation of a state estate agency board in conjunction with NIESV.
“This will give confidence to the profession. If a client knows an agent has insurance for professional indemnity, then he can be assured that if anything happens to his money the insurance will pay him back. For now, estate agents are traders and not professionals,” he explained.
Explaining how the practice works in other climes such as South Africa, Ojo said an aspiring practitioner will first complete further education and training certificate in Real estate; undergo a 12-month internship mentored by a professional; write and pass Professional Designate Examinations (PDE); and register with the country’s Estate Agency Affairs Board. To be a principal of a firm, such person will also have to write and pass another examination. Over 40,000 Estate Agents are registered with the board.
Earlier in his keynote address to the gathering, the Lagos State Governor, Mr. Akinwunmi Ambode, who was represented by his Special Adviser on Housing , Mrs. Aramide Giwanson, observed that over the years, the activities of estate agents have been a source of concern to government because of the several unsavoury tales people have had to tell about the sharp practices of the practitioners, which usually leads to people being defrauded.
Ambode agreed that unethical practices have thrived in the profession because it is largely unorganised, unregulated and unprofessional. This has been further buoyed by the by the lack of a central professional/regulatory body that will set minimum standard and code of ethics for practitioners, leaving the door open to all comers including those who do not have the basic training and qualification.
He explained that with the establishment of LASRETRAD, the government hopes to redress the situation, by not only guiding the real estate agency through rules and regulations but by also ensuring that violators of these rules are made to account for their actions.
“We believe that this will ensure protection for citizens and reduce the tendency for fraudulent practices. In addition, it will also enable the government to adequately capture data on property transactions on a regular basis as it is being done in most developed parts of the world,” Ambode said.