In this report, EDITIONG IKPOTO writes about how fraudulent property developers posing as legitimate real estate agents scam unsuspecting home seekers
A 34-year-old software developer, Abiodun Oguntade, who now lives in Mende, Maryland, recently fell prey to the antics of a fraudulent real estate developer.
Oguntade stated that the developer took advantage of his naivety to scam him out of a N300,000 deposit for a one-bedroom apartment he had hoped to rent in the Gbagada area of Lagos.
But he is not the only resident of Lagos to have swallowed this bitter pill. In fact, when the victims of such scams tell their story, Oguntade will stand behind a long line of people who have lost two or three times as much as he lost to fraudulent developers.
Last month, a suspected fake developer, Ahmed Ayinde, was arrested by men from the Lagos State Police Command for allegedly defrauding no fewer than 100 potential tenants in the state’s Olowo Ira area.
The PUNCH collected that the victims paid for several flats in a one-storey building at No. 5, Ayedun Street, Olowo Ira, which is being developed by Ayinde.
After receiving the payments, it was learned that Ayinde and his accomplices told the potential tenants that they needed some time to complete the renovation works on the building.
It was agreed that upon completion of the renovation the keys to the respective flats would be handed over to the tenants.
However, the drama began when attempts by some potential tenants to gain access to their flats failed.
One victim, Sunday Akinmoladun, said he was surprised that more than eight people paid for the same flat he had paid for, adding that many potential tenants were stranded because people had occupied all the flats in the building.
He said: ‘I paid N300,000 in cash for a room in Ibrahim’s bank account. I paid since March 2021 but couldn’t pack because they said they were renovating the house. I come to the house almost every day and usually meet an engineer and masons working on the building.
“I was told to pick up the keys to my flat today when everything changed. I called Ibrahim, but his number is not connected.”
This particular isolated incident, with many casualties, is just one of many similar stories that come out of Lagos every year; a reality that begs the question – what is it about Lagos that makes it infamous for its apparent proliferation of fraudulent property developers?
The answer to the question is not far fetched. Living in Lagos is of strategic importance to many given its comparative advantage with regard to trade and industry as well as the best establishments in the country, which in itself gives a degree of confidence that skills will meet opportunities here.
With more than 500,000 people entering the city each year from off the Nigerian coast or from regional migration, the UN Special Rapporteur on housing, Leilani Farha, estimates the state’s housing shortage at 2.5 million, while the BBC estimates the total housing shortage of Nigeria estimates at about 17 million.
In fact, the proliferation of rental scams in Lagos had prompted the state government to provide clues as to what could be a red flag for potential tenants, advising them to beware of quacks and fake professionals in the state’s rental market who claim landlords and brokers.
The state has recorded a spike in rent fraud in the past 12 months involving potential tenants, landlords and agents in cases that Governor Babajide Sanwo-Olu’s special adviser for housing, Toke Benson-Awoyinka, estimated at more than 200 at just one few locations.
The locations include Alapere, Ajao Estate, Akoka, Gbagada and other parts of the state.
The special counsel said, speaking at a stakeholder forum for real estate lawyers, that the Akoka case involved about 113 home seekers who were defrauded over N51m, while 66 others were defrauded from N16m in the Gbagada case.
She also cited other cases in Alapere and Ajao Estate areas of the state, pointing out that these victims paid between N200,000 and N500,000 for a limited number of apartments, no more than 20.
Benson-Awoyinka begged home seekers and home buyers to hire the services of real professionals such as lawyers for all their real estate services, stressing that the state government had decided to put an end to such fraudulent activities by enacting the law of the Lagos Real Estate Regulatory Authority. enact.
Boniface Adebayo, a civil engineer and estate manager, who was concerned about the increasing number of rent scams, said such vices would inevitably crop up in megacities like Lagos, which usually had higher-than-average annual urbanization rates.
“This is a state where, according to a report, there is a housing shortage of more than three million. That’s not all; the same report says the state has the most active rental market in Nigeria, where more than 60 percent of the population of 20 million live in rented housing,” Adebayo said.
“It is also said that more than 600 people come to Lagos every day and more than half of that number are not going back, meaning you have people looking for rental properties at any time. That unending demand for rental properties fuels the activities of these fraudulent agents and landlords,” he said.
In Lagos, these fake developers have different modus operandi, which makes it somewhat difficult to determine whether one is dealing with a legit agent or a charlatan. Nevertheless, there are few indicators that could make a potential tenant suspect that he/she is dealing with a fraudulent person.
Some of these indications may include the developer’s inability to show the proper practice license or documentation to support its claims, insistence on payments through personal bank accounts, the developer’s inability to answer certain fundamental questions about the property, among others. Others.
A victim of rental scams in the Fadeyi area of Lagos, who simply gave her name to Mary, shared an interesting insight into a popular tactic used by some of these unscrupulous elements.
She said: “I met this agent who mainly works with students in Yabatech and UNILAG. It depends on how much you have, how much you can afford, and he gives a shared apartment. He said there was a three bedroom apartment and that if I paid my money, he would find two more people and then, when the money is round, can collect the money and give it to the landlord before we can move in.
“So I paid the money, after a month he hadn’t found the other two residents to come with me and I asked for my money so he said he used my money to renovate the house. He told several stories about how he couldn’t just pay the money back, that I would just have to stick with it, that he would find some people who would come with me to live in the three-bedroom apartment and all that. That was over three years ago. He never refunded the money. Apparently I wasn’t the only one he’d done that to.
“Later I learned that he had been arrested and we were asked to come to the station and write down our statements so that we can claim our money. As at that time, the money he owed was so much, and because of my job, I didn’t really have time to chase the man. Others had time, as most were students. I only got about N50,000 from the money he took from me. Of the almost N200,000 I only got N50,000.”
While avoiding the trap of these shady quacks is not an exact science, an expert and president of the Nigerian Institution of Builders in Facility Management, Dr. Akinsola Olufemi, that if the government has been more involved in providing affordable housing for the low and middle class income earners, as was popular during the Jakande and Otedola eras, incidents of rent scams would be significantly reduced.
Olufemi said the frequency of these scams can also be traced back to the influx of migrants entering Lagos on a daily basis.
He said: “When we talk about developers, we have to define it. Developers are known to take ownership and say let us develop it for you. In two years, after development, we will come back and manage it for 15 years, and after 15 years it returns to you.
“Those are individual developers. Those are the ones that always fall into the scammers category. What they do is they don’t have money to carry out their projects, they use the rent to develop and finish, and by the time they build the rent can’t cover the construction cost, so they collect money from so many people.
“They finish the building and find a way to pay back after the property has been assigned. People looking for accommodation should be very careful and diligent in their search.
“As far as I’m concerned, I’m not going to look for a house and then contact these kinds of developers because I know that 70 percent of them are involved in this scam problem. There was a story of someone in Alapere some time ago who scammed 300 people. How long will it take to pay back the money?”