By Yinka Kolawole

The lack of a proper database on real estate statistics has been identified as one of the stumbling blocks in the appropriate classification of properties in Nigeria into either residential or commercial property.

A legal practitioner, Mrs. Olayemi Anyanechi, noted that this ultimately affects the ability to source for housing finance in the country. She made the remark in her presentation on “Bankability in the Development of Funding Instrument for Housing in Nigeria”, at a recent forum of Real Estate Lawyers Association of Nigeria (RELAN).

Anyanechi, who is the Managing Partner of Sefton Fross, a Lagos-based commercial law firm, asserted that the key to ensuring bankability of housing projects is identification of risk mitigation needs, securitisation of funds for housing delivery, engagement of solicitors from the early stages to ensure project documentation are in sync, and assurance that the project company has unassailable title to the property.

According to her, the most important task for the developer is the title of the property to be developed, adding that, the developer must carry out an investigation of the root of title and ensure that the property to be financed is properly vested in the developer.

“Make sure that there are no prior claims to the property. Search at the land registry to check for any encumbrances. This is a very crucial step as the lack of proper title obviates the possibility of security being taken on the property in question. Also without proper title, it would be unlikely to have willing off takers/investors,” she added.

Anyanechi further noted that housing finance, by its very nature, is a capital-intensive venture which if financed through personal financial resources will require slow and tedious accumulation of savings.

She declared that associated costs of housing include cost of land especially in urban areas, construction costs and, building materials costs, adding that due to the huge associated costs, financing is the linchpin for most, if not all, housing projects.