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Real Estate Expert, OLA JAGUN Revealed
The issue of house agents, particularly in Lagos, has become a serious problem in the rental sector. It seems that everyone has turned into a house agent without any form of license or approval. This practice is causing numerous issues in Lagos, leading to a sharp increase in housing prices. The typical 10 percent commission that agents used to charge has now escalated to 40 to 50 percent in many areas of Lagos.
Recently, City People spoke with Pastor Ola Jagun, a former Chairman of the Nigerian Institution of Estate Surveyors and Valuers, Lagos Chapter. ESV Jagun is one of the most qualified and respected members of the institution, known for his expertise in real estate matters.
During the conversation with him about the increase in commission fees and the undue charges imposed by house agents, which are affecting ordinary Nigerians’ ability to rent decent apartments, ESV Jagun shared his insights. As the Chairman of the Property and Facility Management Faculty of NIESV and a past President of the Nigerian Chapter of the International Facility Management Association (IFMA), he offered valuable perspectives on the situation.
When asked how the government could regulate the activities of house agents in Lagos, his response was brief yet poignant. “This is a pertinent issue. I’m telling you, some of these individuals are a menace. Even I, as a practicing estate surveyor and valuer, sometimes avoid them due to the fraudulent activities they engage in. I remember how desperate they can be at times.”
The estate surveyor and valuer registration board in conjunction with the Nigerian Institution of estate surveyor and vaulers , we are clearly making an attempt at that. That’s why we set up the Association of Estates Agents of Nigeria, that we are training them and monitoring them. But there are so many splinters, small, small bodies all over the place.
Because the agency is not really regulated, I mean, there’s no law that says somebody cannot engage in buying and selling of houses. But you see, the truth is that we actually have laws to take care of many of these things. All the needs, number one, is for government to create awareness for people to speak out when these things happen so that the law can take its course”.
He stated further “But you see, unfortunately, like let’s say government keeps hammering on this, and that’s why they want to register again. But unfortunately, if we want to be frank with ourselves, they are going about it the wrong way. They are more about the revenue they want to make, money they will make from people registering, categories of registration.
Although they are trying to claim that they are not collecting money right now, but it’s a trap. Estate Surveyor and valuers are making efforts, and they are registered. No estate surveyor and valuers will be involved in any of these things.
Even if they have such infractions, you have a body you can refer them to. They will be disciplined accordingly. And if they are reported to estate surveyor and valuers registration board, I was in the panel and tribunal before, they can be removed”.
He continues “They can be deregistered, and that is going to bar them for life, sometimes suspend them, depending on the gravity of what they have done. Government should support professional bodies more, instead of thinking of revenue. Collaborate with the estate surveyor and valuers registration board to strengthen that area, and then it’s going to be better.
And then publicise it and let people know that this is happening. In fairness, those people sometimes can be heartless. Sometimes the fees they collect on renting houses could be up to 50, 60, 70% of the rent itself.
Sometimes I tell them, I’m making 10%, so where am I going to pay 30%, 40%? And sometimes they collect money from 2, 3, 4, 5 people, and they just manage to detain here. But I believe the menace can be curbed if the government will genuinely sit down with registered people, the estate surveyor and valuers, and we can be creative to work together to deliver value to our people”, he concludes.
Meanwhile, Lagos State has begun the regulation of house agents and rent through a new tenancy bill that mandates agents be registered with the Lagos State Real Estate Regulatory Authority (LASRERA), limits agency fees to a maximum of 5% of one year’s rent, and requires all rent to be receipted. The new law also sets a maximum payment limit of one year’s rent, regardless of the tenancy agreement, and establishes penalties for violations, including fines or imprisonment.
Lagos State has also reformed the real estate industry in Lagos, as authorities have indicated that it is now prepared to commence the enforcement of the state’s estate agency regulatory law.
The law approved in 2015 establishes the state’s Estate Agency Regulatory Authority, currently managed by the Real Estate Transaction Department (LASRETRAD) under the Ministry of Housing, prepares rules and regulations for the practice of estate agency in the state.
The authority will also maintain a register of estate agents, sanction unlicensed estate agency practitioners, collate data on property transactions, investigate complaints and petitions against licensed practitioners as well as ensure the payment of fees, taxes or charges on property transactions.
Under the proposed reform, any developer that wants to practice the business of estate agency must obtain a license from the authority and has powers to monitor completed or uncompleted structures as well as recommendations for the revocation of subsisting right of occupancy on the property that failed to comply with notices.
Essentially, the new agency regulatory organ has fixed agency fees of 10 per cent of the total rent collected on any transaction, imposes 15 per cent fees on any sale or purchase of land or building where two or more agents are retained by the owner/vendor. Every tenancy agreement will also attract 12.5 per cent legal fees.
This vision is to provide an enabling environment and transparent real estate sector conforming with international best practices, while safeguarding the interests of all stakeholders, our mission, however, is the creation of an innovative and sustainable environment to promote Lagos as a real estate investment destination in Africa and the World.
Pastor Ola Jagun is a Certified Facility Manager (CFM) of the International Facility Management Association (IFMA) based in America, a Certified Facility Manager of Japan (CFMJ); member of the Project Management Institute (PMI) of America; Fellow of the Royal Institution of Chartered Surveyors (RICS) of United Kingdom (UK) and fellow of the International Facility Management Association (IFMA).
