CURBING THE MENACE OF QUACKS IN REAL ESTATE

ESV IWUOHA CHISTOPHER IFEANYI. (ESTATE SURVEYOR AND VALUER)

Real Estate in Nigeria is very lucrative and has contributed towards economic growth in provision of jobs to our teeming populace. It promises huge returns as it could easily be practiced by non professionals or quacks. The activities of these quacks are uncoordinated and have posed a lot of issues making the real estate market in Port Harcourt to be porous with an increasing demand on high agency fees and other related charges from prospecting tenants. This makes houses much less affordable and curbing the menace of these quacks could have a positive impact on real estate business.

The text deals on few analysis of problems, challenges, policy and practical recommendations on how to curb the menace of increasing high agency fees charged by agents/quacks in real estate in Port Harcourt.

Estate agency is one of the multi-faced professions of the Estate Surveyor and Valuer. It means acting on behalf of the principal in purchases, leases, sale of landed property with the aim of charging a fee that is 10%. The agency practice could be sole, joint or multiple.

The Nigerian Institution of Estate Surveyors and Valuers (NIESV ) in its quest to control the menace of these quacks inaugurated the Association of Estate Agents of Nigerian (AEAN).

The fundamental role of Estate surveyors and valuers in real estate investment includes; property management, valuation, directing and guiding investors towards sound real estate decisions such as provision of shelter.

In Port Harcourt, the market is so large and not all agents are licensed/registered with the Association as anyone can practice agency be it traders/shop owners, tailors, mechanics, farmers etc and it has posed a lot of problems because their activities are not fully regulated.
The problems are stated as:

High Agency Fees
Many residents in Port Harcourt, are charged with excessive fees by the quacks like; 20% Agency fees, movement fee, call money, legal fees and finder’s fee. All these practices are exploitations and unregulated, placing a huge burden on the prospecting tenants.
Informal Agents:
In Port Harcourt, Many agents operate informally (without registration) making it difficult to enforce professional or legal standards.
Inadequate Enforcement by Professional Regulatory Body.
The enforcement by Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON) being the professional regulatory body of Estate Surveyors and Valuers are not enough even some are now being compromised.
Lack of Regulatory Gap
Unlike Lagos State which has made efforts to cap agency to 10% in some places through regulations, there is no clear regulatory cap in Port Harcourt, local governments or standardizing agency fees.
Limited Bargaining Power
There is often a limited bargaining power for tenants in high demand rental markets. The landlords and agent may dictate terms and the tenant may accept just to secure the apartment.

Lack of receipts, contract or formal documentation of what fees charged
STRATEGIES TO CUB THE MENACE OF INCREASING HIGH AGENCY FEES IN PORT HARCOURT.
Advocate/Establish A Regulatory Cap on Agency Fees;
The rivers state government should pass a bill on tenancy laws that cap agency commission to only 10% in Port Harcourt as similar to that of Lagos State. The cap should introduce and Demand Greater Transparency and standardized agency fee invoice /receipts for letting transactions, legal fee and others
Mandatory Registration of Estate Agents.

The Law should mandate All Estate Agents to register with a regulatory professional body as only licensed agents can operate and collect fees. Disciplinary Committees should be reported to where offenders would face penalties, license suspended or deregistered
International best practices;

The law could also base the agency fee on the type of accommodations and how much should be charged.
Public awareness campaigns on radio, Televisions and Newspapers should direct landlords to only deal with registered/Licensed Agents
The Cap should require from agents to sign written agreements with clients (landlords and tenants) stating clearly how much charged and services rendered.
The Cap could also set up tenant’s complain desk or hotline under the Rivers State Housing Development Authority/Greater Port Harcourt where tenants can report Agents charging excessive or hidden charges.

NGO’s could also organize workshops and seminars to educate people on what is fair as commission, how to negotiate and report complaints.