Real Estate Agency Practice In Nigeria

Project and Seminar Material for Estate Management

Real Estate Agency Practice In Nigeria


Chapter One


Introduction

1.1 Background to the Study

Real Estate agency is essentially a land based profession that deals with the business of buying, selling and leasing of interests in real estate, which may be land or building or the interest therein. Practitioners of this trade are generally addressed as Estate agents in our environment. Considering the importance of housing in mans hierarchy of needs and the huge deficit that exists in the housing sector in Nigeria, Real estate agents generally play a very important role in the socio-economic life of the country, Generally a real estate agent is a person, who possesses the authority to act on behalf of another person with a view to establishing contractual relationship between his principal and a third party. The person, who employs the agent, is usually called the principal (olatunji, 2008)
Commercial activities have been on the increase in Nigeria in the past few years. This is also reflected in the fact that there has been an increase in real Estate activities. The Real estate agency practice has therefore in the recent time become a business for all comers; mechanics, market men, lawyers, taxi driver etc. The practice of real estate Agency in Nigeria at present remains largely unorganized, unregulated and unprofessional. Apart from the Nigeria Institution of Estate Surveyors and Valuers that has set standards for its practice by its members i.e the Estate Surveyors and Valuers, the large majority of those who practice estate agency do so without the basic training in that field, without any certification or qualification, without any regulation and largely in an unprofessional manner (Gambo & Ashen, 2012)

In Nigeria, Section 25&26 of Decree 24 of 1975 empowers the Estate Surveyor and Valuer in carrying out operations as an estate agent. The organized body recognized for the regulation of practice is the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON). However, the Corporate Affairs Commission (CAC), body statutorily empowered for registration of every business outfit in the country, regards estate agency as a business concern and classifies it under general business practice (Akomolede, 2006; Oni, 2009).

The agency practice is regarded as an all comers’ affairs as lawyers, engineers, accountants and even laymenlearned in numeric details carry out this operation. An expression has become synonymous with the estate surveying profession calling every other profession dabbling into agency as quacks. However, there are no clear cut-out edicts granting the estate surveyor and valuer the exclusive preserve of operation even when series of protest has been made to that effect.( Iroham et al, 2011)

A multiplicity of local estate agents associations exists but these are essentially local bodies without the right structure, leadership or plan to advance the practice of real estate agency beyond the parochial interest of the founders (Hemuka, 2002).

The real estate agency is one major and vital aspect of estate management practice that deserves some level of decorum and adequate attention to be given to it so as to ensure that real estate agency practice in Nigeria maintains its course, goals, vision, mission and objectives with regards to the real estate market.


1.1 Statement of Problem

Real estate agency practice in Nigeria like other countries of the world contribute massively to housing delivery system for residential and commercial purposes. It helps to meet as well as cater for the accommodation, office space, and shop demand of people. Due to the important roles real estate agents play in housing and accommodation delivery sector of the economy, in recent times real estate agency has experienced the influx of untrained and unqualified agents in the real estate practice. So many people have become victims of fraud and other related activities that are not internationally regarded as best practices from the hands of some of these agents who go about duping genuine property seekers, which has been the reason for calls from many quarters on the need to professionalize the profession in Nigeria. Identifying the challenges associated with real estate agency in Nigeria will benefit not just the consuming public but also the practitioners.


1.2 Aim and Objectives

The aim of the study is to examine the challenges associated with Real estate agency practice in Ilorin, Nigeria

  1. To assess the various types of agency practice in the study area.
  2. To examine the system of real estate practice in the study area.
  3. To examine the challenges associated will real estate agency practice in the study.
  4. To recommend a reasonable solution to the challenge above

1.3 Scope of the Study

The study is to examine the challenges associated with real estate agency practice in Ilorin, the study will cover the activities of real estate agency professionals (The Estate Surveyors and Valuers) in Ilorin in dealing with real estate agency practice considering the policies been set aside to guide practice of real estate agency in the country with the aid of administering questionnaires to sample the opinion of selected Professionals.


1.4 Significance of the Study

The contribution of this study would be of interest to Estate Surveyor and Valuers, the general public and also to the government. It will be of benefits to the Estate Surveyors and Valuers through proper regulation of the practice by ensuring that only qualified persons practice real estate agency.

Also important to general public by educating them on the need to patronize the professional real estate agents and the criteria that makes someone a real estate agent i.e the qualifications of the real estate agent and the professional bodies such agent belong to. General public will also benefits through improved and quality agency services from reliable and well referenced real estate agents. It will help the government in tackling the issue of fraudulent transaction in real estate agency practice

And lastly, this research will also serve as a future reference for researchers interested in carrying out further research on the study of challenges associated with real estate agency practice


1.5 Limitation of the Study

During the course of gathering data for the study there were constraints which was encountered which are:

  1. The time limit for the research work is short for a more comprehensive work and due to the time frame of the research.
  2. Also some of the respondents did not provide all the necessary data required from them due to confidentiality
  3. The researcher found it very tedious in getting necessary data from the principal partner as they were seen to be busy carrying out their daily activities
  4. Lastly there is problem of human and financial resources in carrying out the research.

1.7 Description of the Study Area

Ilorin the capital city of Kwara State, Nigeria is located on latitude 8o 24’N and 8o 36’N and longitude 4o 10’E and 4o 36’E with an area of about 100Km2 (Kwara State Diary, 1997). It is situated at a strategic point between the densely populated south- western and the sparsely populated middle belt of Nigeria. Ilorin is located in traditional zone between the deciduous woodland of the south and dry savanna of North of Nigeria.(Jimoh, 2003)

The climate of Ilorin is characterized by both wet and dry seasons. The temperature of Ilorin ranges from 33oC to 34oC from November to January while from February to April; the value ranges between 34oC to 53oC (Ilorin Atlas, 1982). The mean monthly temperatures are very high varying from 25oC to 28.90C. The diurnal range of temperature is also high in the area. The rainfall in Ilorin city exhibits greater variability both temporarily and spatially.(Ajadi, 1996).The total annual rainfall in the area is about 1200mm. Relative humidity at Ilorin in the wet season is between 75 to 80% while in the dry season it is about 65% . The day time is sunny. The sun shines brightly for about 6.5 to 7.7 hours daily from November to May. (Olaniran,2002)

The soils of Ilorin are loamy soil with sodium and low fertility. Because of the high seasonal rainfall coupled with the high temperature, there is tendency for lateritic soil to constitute the major soil types due to the leaching of minerals nutrients of the soil (Ajibade and Ojeola, 2004).

The derived savanna dominates the vegetation of the area. The vegetation type comprises tall grass which is interspersed with scattered trees. Amongst the grasses in the area include spear grass, elephant grass, and goat weed. Trees in the area include shear butter, acacia and locust beans trees. (Ilorin Atlas, 1982).

Figure 1: Map of Nigeria showing kwara
Source: Ministry of Land and housing, Kwara State.

Figure 2: Map of Kwara showing Ilorin
Source: Ministry of Land and housing, Kwara State.


1.8 Definition of Terms

Agency:

The relationship between principal and agent which arises out of a contract either express or implied, wherein an agent is employed by a person to do certain acts on his behalf in dealing with a third party (Abobade, 1994)

Agent:

One who undertakes to transact some business or to manage some affair for another by authority of the latter (Abobade, 1994)

Principal:

The employer of agent or the agent client (Kuye, 2003)

Real Estate Market:

Is a medium where ownership of interest in landed property change hand in consideration for not only monetary but also for other consideration depending on the interest of parties involved (Abobade, 1994)

Power of Attorney:

A written instrument duly signed and executed by an owner of property to which authorizes an agent to act on behalf of the owner to the extend indicated in the instrument (Abobade, 1994)

Quack:

A person who dishonestly claims to have knowledge and skill. (Oxford Advanced Dictionary,2006). A person who pretends to be able to carry out certain activities, but his/her is unqualified and incompetent. Ajagbe (1998), define Quacks as those people who practice professions for which they are not formally trained or are not licensed to practice even though they have might gotten a formal training.


Chapter Five


5.0 Summary, Conclusion and Recommendations

5.1 Summary of Finding

The following form the summary of findings;

  1. Majority of the respondents are male constituting 82.35% .
  2. Majority of the practicing Estate Surveyor and Valuer had a B.sc/B.Tech in Estate management.
  3. Majority of the practicing Estate surveyors and Valuers fall within 11-15 years resulting to 41.17% while minority of the selected registered practitioners of 5.88% have 1-5 experience in practice.
  4. Agency and property management is the jobs handled most by the practicing Estate Surveyors and Valuers in the study area.
  5. Majority strongly agreed the incidence of quackery in the major external challenges associated with real estate agency practice in the study area
  6. They disagree quality of staffs and inadequate experience is an internal challenges associated with real estate agency practice
  7. The practitioners agreed low staff salaries, poor marketing and lack of trust amongst professionals are in internal challenges associated with real estate agency practice.

5.2 Conclusion

This study has revealed many challenges associated with real estate agency practice in Ilorin. The activities of quacks in estate agency is no doubt the major challenge in the real estate profession. The inability of some valuers to keep abreast of the dynamic and changing environment through failure to attend Continuing Professional Development (CPD) courses, conferences and attain higher qualifications has led to falling standards of professional practice. Other challenges identified are fraud, topping up, lack of government intervention in real estate market through legislations, and unethical approach to real estate practice. The efforts of the NIESV and ESVARBON must be sustained to ensure an enduring real estate agency practice that is noble, enviable, viable and rewarding not only in the present day but in the future such that the generation of practitioners yet unborn would thrive in the profession without let or hindrance.


5.2 Recommendation

In order to ensure a more effective and efficient of estate agency practice, the following recommendation have been made by the researcher.

  1. The National Institution of Estate Surveyors and Valuers (NIESV) should ensure that Estate agency is giving a adequate attention and a mode of registration for all practicing agency should be adopted in order to protect the integrity of the profession from quackery
  2. Salaries of Estate firm workers need to be scaled up in other to encourage the staff and boost their morale to work
  3. Also adequate attention should be given to the educational system of estate management because if this is adequately taken care of the young surveyors and valuers too can participate in the property market instead of quacks taking control of the property market.
  4. Also Profession excellence and high ethical standard whereby clients would be able to see a clear distinction between the quality and standard of services obtained from estate surveyors and valuers.

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Real Estate Agency Practice In Nigeria

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