By Esther Onyegbula

Concerned with the increasing number of building collapses in Nigeria, Construction Lawyer, Osinachi Nwandem has called on the government to implement policies that can regulate the off-plan arrangement in the real estate industry.

Nwandem made this appeal during his address at the Africa Real Estate Summit held in Lagos recently.

Highlighting the popularity of the off-plan arrangement due to its potential for high returns, Nwandem underscored the existing high risks associated with it. He emphasized the need for developers to address these concerns and provide investors with a sense of comfort and security. Nwandem suggested that incorporating legal mechanisms and measures in contracts and agreements, specifically off-plan purchase and sales agreements is crucial in achieving this objective.

“The investor’s right is to be able to receive that property as stated in the plan and as agreed between the parties and the developer should ensure that he achieves that. The right of the developer is to receive payment for actualising the investor’s dreams. Those are the rights and if any of those rights are breached, there are remedies.

‘One of the mistakes that people make is to go into a risky venture without having a contract and the essence of having a contract is to put the two parties’ intentions that are binding and for transparency and peace of mind. So when you don’t have the contract or you don’t have an agreement to bind the parties, there are going to be a lot of issues.

“If you have a good contract but poor execution of the contract, it is like having a beautiful piece of paper and watching it and not executing it so one is lack of contracting and other is poor contract management, so that’s one thing they have in the industry. The second is the investors not conducting due diligence so you need to investigate the capacity, capability, and reputation of the developer which is very critical.

“Developers need to understand that some of the concerns of investors is losing money made on investments. Assure them that they will get their money back if the project goes south. On the issue of delays, assure them that you can deliver on time and if you can’t, there are contractual measures to protect both parties.

“The government should come up with policies that can regulate the off-plan arrangement. If you go to Dubai, Kenya, Spain, Vietnam, and Thailand, they have a very robust off-plan arrangement around real estate investment. Let’s have good regulatory policies regarding off-plan arrangements in the real estate sector and also enforce them. If we can implement these laws, we can reduce the level of building collapse. When we have a policy, we should look at enforcement, that’s the only role the government can play.”

The Africa Real Estate Summit, organised by Matthew Onwuka, sought to bridge the information gap in the real estate industry. Onwuka explained that misinformation is a significant challenge in the sector, and the summit aimed to rectify this by providing accurate and comprehensive information.

“One of the key challenges we have identified is misinformation. If the information out there regarding real estate is poor, and people run with that information, of course, you are going to see some of these challenges play out. For instance, people think that when you talk about real estate, it’s about buying and selling land alone. We decided to put together a platform that can solve this problem of information and that’s why we have the Africa Real Estate Summit.

“We believe that Real Estate is about solving problems in terms of property, investment beyond just buying and selling of property but other areas that make up the real estate sector.”