Estate residents, buyers worry over ownership dilemma
Since after Olusegun Obasanjo’s new town development initiative that led to the building of Festac Town in 1977, and Shehu Shagari’s low-cost housing estates replicated in some states, estate development and ownership have literally been left in the hands of private sector operators.
A close look at modern real estate development and practice shows what a group of subscribers that bought into one estate described as ‘a big rip-off.’
For some inexplicable reasons, private estate developers have changed the meaning and essence of estate ownership. Whether it is a site and serviced scheme where an investor buys a parcel of land, provides basic infrastructure and sells the land per plot, or a fully built up estate, the practice and style of ownership remain the same.
Unlike what obtains in advanced societies where an investor buys a parcel of land or builds houses in an estate, sells same per plots/units to interested buyers/subscribers and exits, investors and developers in Nigeria more or less enslave estate buyers/residents by retaining ownership of the estates after selling and recouping their investment.
These developers don’t stop at just retaining ownership of the estates, they take it a step further to impose all sorts of levies on the residents and subscribers who are supposed to be the ones deciding what should be done in the land or house they have paid for.
A group of subscribers who said they represented the interest of over 3,000 other subscribers to an estate along the Lagos Ibadan Expressway being developed by an Ogun State-based property development company, recently told property writers in Lagos that the company, sometime between 2006 and 2008, advertised in various newspapers, availability of plots of land in the estate for sale.
They recalled that the company promised to deliver to all subscribers upon completion of their payment, which the company agreed to collect in different installments.
“The company after several years, and despite collecting different sums of money ranging from N350,000 to N1 million per plot, began to ask for further payments ranging from N200,000 to N1.2 million, which they termed development levy,” the subscribers said.
According to them, the company insisted on collecting these monies on the same plots, which had been paid for, even when no single subscriber among those who had finished payment had been physically allocated their land.
Subscribers to two other companies, which have estates in the Agbara axis of Lagos, also shared their experiences with BusinessDay.
To them, while one of the companies is selling its land for N650,000 per plot and demanding N500,000 development levy plus N100,000 survey fee, the other is selling its land for N1 million per plot and demanding N700,000 development levy.
“This is a rip off and it pains me. How can I buy a plot of land for N650,000 and the developer is still asking me to pay an additional N500,000 for development levy. Is it the business of the developer or that of the residents to charge development levy,”? Godwin Egwuatu, a subscriber to one of the estates, queried.
Egwuatu, who spoke in an interview with BusinessDay, was bitter that a lot of things were done in a wrong way in Nigeria, likening an estate developer to any other trader “who buys his wares in bulk and sell to interested buyers in bits.”
“If a trader buys a carton of cigarette, for instance, and decides to sell by packets to buyers, as soon as he sells the last packet, he walks away, having made his profit,” he said, lamenting that estate developers after making huge profits from their estates, still retain ownership of an area already sold out.
The story is not different in built-up estates where developers also come with another variant of the rip off called Service Charge through which facility managers collect large sums of money from residents for general maintenance of the estate.
Explaining the whole essence of facility management and the justification for the high service charge on asset maintenance, Muhammed Balogun, managing director, WSP Facility Management Company, said, “The idea is to guard against infrastructural decay in residential accommodation, roads and public institutions.”
Egwuatu takes this explanation with a pinch of salt, insisting that it’s all aimed at ripping estate residents off, as “government should beam its search light on private estate developments; many of the developers have set up facility management companies to maintain their estates and collect money from residents.”
