By Innocent Anaba

The Lagos State Government has launched the Housing Arbitration Rules of the Lagos Home Ownership Mortgage Scheme, HOMS, which is meant to provide speedy and effective resolution of disputes that arise under the scheme.is designed by the state government to meet the demand for large-scale affordable housing.

The scheme according to the state government will provide access to affordable mortgage finance for first-time house buyers in the state and because disputes are unavoidable in commercial relationship, the Rules was passed by the Lagos Court of Arbitration to support speedy resolution of disputes that may arise under the scheme.

The 15 Articles Rules provide for how to commence an arbitration under the scheme in the event of dispute. It also provides for appointment of arbitrator, conduct of arbitration proceedings, powers of the arbitrator, procedure and evidence, short hearing, documents-only arbitration, provisional reliefs, award and remedies, costs and general provisions.

Speaking at the presentation of the Rules, Governor Babatunde Fashola “one of the promises made at the inception of this administration was to develop a Scheme for the provision of affordable housing to the people of Lagos State. We have since embarked on this project and in the next few weeks, we will steadily unveil the modalities for the operation of the Lagos Home Ownership and Mortgage Scheme (“Lagos HOMS”).

“The objective of the Lagos Home Ownership Mortgage Scheme is to design a vehicle that will help make the dream of owning a home achievable. The Scheme will thus provide equity funding on the platform of mortgage financing for the purchase of homes, whereby applicants will become proud owners of their own homes upon the payment of an equity contribution not exceeding 30% of the price of the housing unit, with the balance payable over a period of 10-20 years from the commencement of the mortgage.

“The Scheme is primarily designed for “First Time Buyers” (“FTBs”) i.e applicants entering into the home ownership market for the very first time. Naturally, Lagos HOMS will be regulated by certain rules of pre-qualification, all of which will be available on the website I will launch today. These will include a sworn buyer’s affidavit attesting that the applicant does not own a property anywhere within the territory of Lagos State, proof of employment (salaried or gainful self-employment), residency in Lagos State, and of course evidence of tax payment.

“Any false deposition in the buyer’s affidavit will be a ground for re-possession and this will be without prejudice to other criminal sanctions that may be imposed by law. Similarly, applicants will be required to execute a Contract of Sale and a Deed of Mortgage. These documents will govern the transaction and set out the rights and obligations of the parties. We have also designed a structure whereby the Lagos State Government will collaborate with named partner banks for the provision of funds to support applicants in the acquisition of homes, as well as for the management of the pre-qualification procedure. All these details will also be available when the Scheme is formally launched,” he added.

Fashola said all disputes arising under the scheme will be resolved by arbitration governed by the Lagos HOMS Housing Arbitration Rules. “This is an innovation which we hope will ensure that disputes that arise will be treated expeditiously efficiently and cost effectively.

The cost of arbitration will be limited to 2% of the purchase price of the property, and will be shared equally between the parties. To further save costs, arbitration will be conducted by a single arbitrator and in cases where it is appropriate, by the submission of documents only,” he stated.