How To Avoid Real Estate Scams In Nigeria

The Nigerian real estate sector presents lucrative opportunities for both buyers and investors. However, alongside its growth, the industry has also become prone to fraudulent activities. Many unsuspecting individuals have lost substantial amounts of money to real estate scams, including fake property listings, land disputes, and bogus agents. This guide provides practical steps to help you avoid becoming a victim of real estate fraud in Nigeria.

1. Understand Common Types of Real Estate Scams

Knowing how real estate fraud operates will help you identify potential red flags. Here are the most common scams in Nigeria:

• Fake Property Listings: Fraudsters advertise properties at below-market prices to lure potential buyers.
• Omonile Fraud: Omoniles are local landowners or community representatives who sell the same piece of land to multiple buyers.
• Title Document Fraud: Selling properties without genuine Certificates of Occupancy (C of O) or falsifying title documents.
• Bogus Agents: Fake agents demand payment (such as agent fees) without delivering the promised service or property.
• Rental Scams: Fraudsters lease a single apartment to multiple tenants and disappear with their rent payments.

2. Verify the Property Title Documents

One of the most important steps when buying or renting property is to verify the ownership and title documents.

Key Documents to Check:

• Certificate of Occupancy (C of O): Confirms that the government has granted the owner the legal right to the land.
• Deed of Assignment: This is the legal transfer of ownership from the previous owner to the buyer.
• Governor’s Consent: In some cases, the property needs formal approval from the state governor.
• Survey Plan: This map shows the location and size of the land and whether it falls under government-acquired areas.

To verify the authenticity of these documents, visit the Land Registry Office in the state where the property is located. For properties in Lagos, for example, you can check with the Lagos State Ministry of Lands and Housing.

3. Engage Professional Agents and Lawyers

Working with professionals helps reduce the chances of falling into the hands of fraudsters.

• Registered Real Estate Agents: Ensure your agent is registered with recognized bodies like the Real Estate Developers Association of Nigeria (REDAN) or the Lagos State Real Estate Regulatory Authority (LASRERA).
• Hire a Lawyer: A legal expert can conduct thorough due diligence on the property documents and contracts to ensure they are valid.
• Avoid Middlemen: Work directly with registered property agents or the property owner whenever possible.

4. Conduct a Physical Inspection of the Property

It is essential to inspect the property yourself before making any financial commitments.

What to Look Out For During Inspection:

• Verify the Location: Make sure the property exists at the advertised address.
• Confirm Access and Amenities: Check for roads, water, electricity, and other necessary amenities.
• Check for Land Disputes: Talk to neighbors or local authorities to confirm if there are any existing disputes over the property.
• Verify Occupancy Status: Ensure the property is vacant or that the tenant has agreed to leave before you take possession.

5. Beware of "Too-Good-to-Be-True" Offers

Fraudsters often attract victims with unrealistically low prices or irresistible deals. If a property’s price is well below the market rate, it’s a red flag. Real estate is an appreciating asset in Nigeria, and genuine sellers are unlikely to sell far below market value.

Red Flags to Watch Out For:

• Urgent sale requests and pressure to make payments quickly.
• Sellers unwilling to meet in person or provide physical documents.
• Agents or owners who discourage you from seeking legal assistance or professional advice.

6. Make Payments Through Traceable Channels

Always make payments through traceable means, such as bank transfers. Avoid paying cash or transferring money to personal accounts without documentation. Keep all records of payments, including receipts, transaction alerts, and agreements.

Payment Tips:

• Ensure the payment is made directly to the registered owner or a recognized agent’s company account.
• Obtain a receipt or acknowledgment letter for every payment made.
• Use escrow services for large transactions, ensuring funds are only released after all legal requirements are met.

7. Confirm Government Approvals and Zoning Regulations

Some properties in Nigeria are located in government-acquired areas where development is restricted. These properties may appear to have legitimate titles but can be seized by the government if they fall under zoning violations.

Steps to Avoid Zoning Issues:

• Visit the town planning authority or land bureau to confirm whether the property is in a government-acquired area.
• Request to see building permits if the property involves newly constructed structures.
• Ask about future government projects in the area, as your investment may be affected by roads or other infrastructure developments.

8. Use a Memorandum of Understanding (MoU) and Contracts

A Memorandum of Understanding (MoU) or a formal contract clearly outlines the terms of the transaction between the buyer and the seller. This document is legally binding and helps protect both parties from disputes.

Important Clauses to Include:

• Property description and agreed purchase price.
• Payment schedules, including deposits and balance payments.
• The timeline for handing over the property or land.
• Penalties for breach of contract or default.

Have your lawyer review the MoU or contract before signing to ensure that it is valid and enforceable.

9. Ask for a Site Survey or Verification Trip

For lands or properties not located within urban centers, consider organizing a site survey trip with your agent. This ensures that you’re not purchasing land in remote or undesirable locations. During the survey, confirm the coordinates and size of the land.

Survey Process:

• Work with a licensed surveyor to map out the land boundaries.
• Cross-check the survey plan with the government-approved survey record.
• Make sure the land falls within the area approved for the intended purpose (residential, commercial, agricultural, etc.).

10. Use Technology to Verify Agents and Properties

Thanks to technology, there are tools and platforms that help reduce the chances of falling victim to real estate scams.

Useful Platforms:

• Lagos State Real Estate Regulatory Authority (LASRERA): Verify agents and developers operating in Lagos.
• Online Property Marketplaces: Use reputable platforms like PropertyPro, Jiji, or PrivateProperty to search for verified listings.
• Google Maps: Use Google Maps to verify the existence and location of the property.

Conclusion

The Nigerian real estate market offers exciting opportunities, but it is not without risks. Real estate scams are prevalent, but with due diligence, they can be avoided. Verify all property documents, engage professional agents and lawyers, and always inspect properties before making payments. Avoid rushed transactions, insist on written agreements, and ensure all payments are made through traceable channels.

By following the steps outlined in this guide, you can confidently navigate Nigeria’s real estate market while protecting yourself from fraud. Taking these precautions will save you time, money, and potential legal disputes, ensuring that your real estate investment is safe and rewarding.