BusinessDay
NigeriaDecides2023

Real Estate Bill: Controversy as group faults REDAN on regulatory powers

Controversy over the Real Estate (Regulatory and Development) Bill now awaiting passage by the House of Representatives has continued to rage as a group of stakeholders have faulted Real Estate Developers Association of Nigeria (REDAN) over the regulatory powers of a new body which the bill seeks to set up.

The views of the group known as Rainbow Push Coalition-Nigeria on the Bill run counter to those of REDAN and other stakeholders who in support of the new bill to regulate estate development.

REDAN had in a communiqué issue by its ad hoc committee on the Bill, highlighted the objectives of the bill. Among other things, the Bill seeks to standardize the business of real estate development in Nigeria by regulating the conduct of transactions in the sector.

It also wants to make the business of real estate development in Nigeria conform to international best practices and safeguard the ultimate interest of all stakeholders in the business; curb fraudulent practices and ensure that real estate business conforms with the National Building Code.

The Bill also seeks to ensure that the real estate business in Nigeria conforms with the Money Laundering Prohibition Act 2011 (as amended) and Nigeria Financial Intelligence Unit (NFIU) ACT 2018 in terms of anti-money laundering and counter-terrorism financing, and due diligence compliance.

Read also: Epe holds key to real estate investment in Lagos – Sekoni

However, Rainbow Push Coalition-Nigeria says REDAN lacks the moral high ground to act for all stakeholders in the real estate business.

The group in a statement issued by its solicitors, West-Idahosa & Co and signed by Ehiogie Idahosa (SAN), Principal Partner and Notary Public, noted that there was complete lack of stakeholder- engagement on the part of REDAN which claims to be the umbrella body of all real estate developers but does not carry the membership along in decision-making.

“The Association is never present or heard fighting for the interests of its members, especially in the face of rising costs of building materials, bureaucratic bottlenecks and other challenges facing members,” the statement explained.

The group described as curious REDAN leadership’s obsession with the passage of a Bill which, in their opinion, is defective, wondering why the leadership is so desperate to become a statutory body.

“Why would the government create a body and handover it to REDAN? Can a participant in an industry be the regulator (or the regulator be answerable to the participant), and be Judge and Jury in its own case? What has REDAN really done for the industry? Have they helped in advocacy in issues that most affect the sector?” the group queried.

The group noted further that as a body set up to work with the Federal Mortgage Bank of Nigeria (FMBN) to access the Estate Development Loan (EDL) scheme of the FMBN, REDAN has not looked at cases of the EDL that have been squandered by their members over the years.

Furthermore, the group described as untrue that real estate business in Nigeria is not regulated as REDAN claims, pointing out that there are many areas where the proposed bill clashes with existing laws of the federation, especially the Land Use Act.

“REDAN claims that the bill is intended to ‘sanitize the real estate business, saying that the industry is not regulated. This is very far from the truth as nobody can build a single house without approvals from regulatory bodies,” they pointed out.

The group cited instances of regulatory processes, especially on land, which must have good title issued by the government while there must be building plan approvals by relevant government agencies.

“In the federal capital territory (FCT) Abuja, we have Development Control, Urban and Regional Planning to mention a few. These drawings/plans are produced by professionals certified by various regulatory bodies. Each stage of the construction must also be certified and approved,” the group said.

According to them, each real estate must get a certificate from the NFIU to be able to operate a bank account. The companies are also mandated by law to submit various reports to both NFIU and EFCC.

“Thus the industry is already well policed by the anti-money laundering agencies whose laws do not need to be repackaged in another bill to be effective. REDAN keeps using this as an excuse as if the laws are not passed and in force already,” they posited.