New Escrow Rule Sets A First Floor For Off-Plan buyers, Second is Still Being Drafted

Fadekemi Ajakaiye

Muttaqha Rabe Darma, the Minister of Housing and Urban Development, told delegates at the BusinessDay Abuja Real Estate Conference 2026 on 23 July that the Federal Government is finalising a framework to reform how Nigerians buy homes off-plan. Central to the framework is a rule requiring deposits and staged payments to be held in a licensed escrow account rather than paid directly to the developer, with releases expected to be tied to construction progress. How those releases will operate in practice is among the questions the stakeholder consultation now under way is expected to resolve.

The significance for buyers is immediate. Off-plan purchases have produced a familiar failure pattern in Nigeria: money leaves the buyer’s account, the developer spends it on obligations unrelated to the specific flat paid for, and construction stalls with little left to recover. Escrow is designed to interrupt that pattern. Ring-fenced funds sit outside the developer’s general accounts, and if a project stalls, the balance remains traceable to the buyer or a court.

The reform sits within a broader policy, the Ministry’s National Housing and Built Environment Regulation Policy, which also introduces developer licensing, professional registration, construction quality assurance, and a National Housing Industry Data Observatory. Darma has been explicit that the framework is under active drafting and that the stakeholder consultation is the moment to shape it before it is submitted to the Federal Executive Council.

One question will determine whether the escrow rule works in practice: who certifies that a milestone has been reached, and to what standard, before money moves against it.

“Escrow controls where money sits. Whether the works behind the release match the certificate is a separate question, and it belongs to the professional who signed the certificate,” said Mayowa Adeosun, founder of Assetrica.

“Off-plan regimes that have earned buyer confidence do two things. They ring-fence the money in a trust account and name a licensed professional whose signature authorises the release. The certificate is a record that a regulator and a buyer can go back to.”

Adeosun credited the sequence the Ministry has followed. “The framing was that the framework is being written now and that stakeholders should come and help write it. That is the moment to specify who verifies, on what basis, and where the record lives.”

The Ministry places the country’s housing deficit at 15 million units. Off-plan sales remain among the more accessible entry points to first-time ownership and among the more common venues for buyer losses. No professional monitoring companies have yet been certified under the framework, and the policy remains open to stakeholder input.

For buyers preparing to enter into contracts under the new rule, the takeaway is measured. Escrow removes a specific, long-standing risk: the deposit disappearing into a developer’s general accounts. What escrow does not, by itself, do is verify that what the buyer is paying for at each stage has actually been built to the promised standard. That protection depends on the verifier the framework names and on the record that verifier leaves behind.

“A licensed trustee holds the money. A licensed professional stands behind the release. Together they are the protection an off-plan buyer is actually buying,” Adeosun said. “The account is the first half of the assurance. The certificate behind the release is the second.”
Which of those halves the final framework carries in equal measure will decide whether the rule sets a floor Nigerian off-plan buyers can trust, or a threshold that still leaves the harder question open.