ASSESSMENT OF THE PROLIFERATION OF UNREGISTERED ESTATE AGENT IN REAL ESTATE MARKET
ABSTRACT
This study, assessment of the
proliferation of unregistered estate agent in real estate market is
aimed at examining the activities of the increasing numbers of
unregistered estate agents in Nigeria with particular interest in Abuja
the Federal capital territory. To achieve this the following specific
objectives were pursued: To examine the concept of real estate agency in
Nigeria; To examine the activities of unregistered estate agent in
Nigeria real estate market; To assess the impact of the proliferation of
unregistered estate agent on the real estate market and to identify the
challenges affecting real estate agency in Nigeria real estate market.
The researcher adopt the use of questionnaire, observation and personal
interview to gathered relevant data from the respondents while tables,
simple percentage and descriptive statistics were used for data
presentation and analysis. The study reveals that there have been
increases in the number of unregistered estate agent in the real estate
market which is majorly due to rising number of unemployment and
regulated / poor supervision of the activities of real estate agency in
the study area. The researcher therefore recommend that the capacity of
the Estate Agents Registration Board should be enhanced to enable it
better regulate the profession, unregistered and quack agents currently
practicing should be tracked down and made to either go for training in
the diploma or degree of Real Estate, work under a registered estate
agent for a period of not less than one year or face having their
offices closed and prosecution.
CHAPTER ONE
1.0 INTRODUCTION1.1 Background Of The Study
Real estate agents obviously perform a
middleman function in that they bring buyers and sellers together. They
build the bridges between people in search of landed properties and
estate owners. Real estate is a special type of asset that almost
everyone desire to own.
Real estate agency was introduced by the
British during the colonial era, although before then, there were
middlemen in land transactions. Estate agency grew from the old
auctioneers who were chattlemen attracted by the exciting prospects of
selling large estates. These auctioneers were mainly the lawyers who had
easy access to the available properties in the market and kept the
lists of estates for sale and prospective purchasers. These real estate
practices became visibly lucrative during England’s Industrial
Revolution of the nineteenth century. During this period, new wealth and
employments were created. The desires for homeownership were largely
satisfied. New lands were explored and built-upon or bought and
developed. The market for property development widened considerably and
the property markets grew exponentially. Then as more lands were
developed, more properties enlarged the market base, and property
experts were needed as people began to realize the complications that
arose from marketing or buying properties.
Notwithstanding, more self-styled estate
agents also emerged, and over time, the real estate business became
marred by incompetence and unwholesome behaviors. Due to lack of control
over the self-styled estate agents, there were many victims of
obtaining and fraud. To safeguard public interests against unscrupulous
practice of estate agency by unregistered estate agents and rogues in
the 1970s and eagerly 1980s, the Nigeria government and the professional
bodies governing estate practices have enacted the guidelines and laws
guiding the practice of estate agency in Nigeria.
The law establishing the profession of
estate surveying and valuation in Nigeria included the estate agency as
part of the functions of estate surveyors and valuers in Nigeria.
Notwithstanding, presently in Nigeria it is all comers affair and there
is an association of estate agents. Entering the real estate market is
easy, and requires neither qualification nor previous experience, this
gives every rank and files opportunities to practice or become estate
agent with the requisite educational qualification and registration with
the right professional bodies.
Real estate market is not dominates with
one particular profession, although there can be no doubt that some of
practicing estate agents are members of the Nigerian Institution of
Estate Surveyors and Valuers, there have been increase in the number of
unregistered estate agent with or without requisite educational
background. One needs to comment on the cut-price estate agent. Many
believing that estate agency was a way to make easy money and believing
that existing charges were too high in which perhaps they were
encouraged by the media and such bodies sought to set up business
charging in a variety of ways, but at a level significantly below the
charges by the established agents in the area. Some charged lower rates
of commission, others set fee for a specific service.
1.2 Statement of the Problem
Estate agency should be conducted by men
and women with a background of professional knowledge who acknowledge
and follow ethical standards prescribed by the leading professional
bodies of the land (The Nigerian Institution of Estate Surveyors and
Valuers NIESV) and the regulatory board the Estate Surveyors and Valuers
Registration Board of Nigeria (ESVARBON). The fundamental problem is
that the term – Estate Agent is not statutorily defined in the context
of real estate agency practice in Nigeria. The Nigeria real estate
market is overwhelm with increasing number of unregistered estate agent
(quacks) who are victims of circumstances and have to change their
careers informally, they neither have formal training, educational
qualifications, nor professional expertise in the art and science of
real estate agency, and have taken advantage of an apparent lax in the
system to encroach into the landed profession. Due to their numerical
strength and lack of awareness on the part of the people, they are
widely consulted and fall victims of several fraudulent practices and
cheats which end up given the profession a bad image in the eyes of the
public.
1.3 Aim and Objectives of the Study
The aim of this project is the assessment of the proliferation of unregistered estate agent in real estate market.
To achieve this aim, the following specific objectives shall be pursued:
- To examine the concept of real estate agency in Nigeria.
- To examine the activities of unregistered estate agent in Nigeria real estate market
- To assess the impact of the proliferation of unregistered estate agent on the real estate market.
- To identify the challenges affecting real estate agency in Nigeria real estate market.
1.4 Research Questions
This study arose from the need to answer the following research questions:
- What is the concept of real estate agency?
- What are the activities of unregistered estate agent in Nigeria real estate market
- What are impacts of the proliferation of unregistered estate agent on the real estate market?
- What are the challenges affecting real estate agency in Nigeria real estate market?
1.5 Significance of the Study
The need for this study arose because
estate agency as a profession in this country has seen an influx of
numerous unqualified persons because there exists a conflict between
professionalism and commercialism in the practice. These people come in
to provide agency services in the real estate market yet they have no
knowledge of either real estate or the market within which it is traded.
As a result, the real estate market and particularly in Nigeria, is
plagued by inefficiency and a lack of transparency. Transactions
involving great sums of money are carried out in secret which keeps
shrouding real estate in mystery and prevents many people from getting
into such investments for fear of being defrauded.
In addition, the real estate market in
Nigeria has seen a sky rocketing of prices of land and buildings as a
result of speculation by investors. Valuers, who have as their basic
role the determination of an estimate in monetary terms of the value of
property, have played a major role in directing the prices in the
Nigeria real estate market resulting in very high values for property.
Although some valuers operate as both valuers and estate agents, there
are those who have specialized in valuation and in most times these do
not work hand in hand with their professional counterparts; the estate
agents who are actively involved in the exchange of property. Without
the involvement of professional estate agents to provide advisory
services, property in the country has become too costly and these prices
have ceased to represent the value of property which in turn has
distorted the market and locked out potential investors.
The study therefore seeks to serve the
needs of investors who may want to venture into the real estate market
in Nigeria and particularly in Abuja the Federal capital Territory. The
needs of the professionals in the practice of estate agency will be
addressed therefore contributing to the practice of real estate agency
professionally and if the research findings are implemented, estate
agents will understand better their job descriptions and cope with the
changing needs of a more vibrant real estate market.
Developers/landlords and tenants will
also benefit from this study since it will be brought to their attention
why they should only do business with professional estate agents and
therefore protecting them from fraudulent practices.
1.6 Scope and Limitations of the Study
This research is undertaken to carry out
an indepth assessment of the proliferation of unregistered estate agent
in real estate market in Nigeria. The study limited to Abuja the federal
capital territory as particularly, the study seeks to understand how
estate agency in Abuja can be made more professional and make the real
estate market more accessible to investors by reducing the activities of
the increasing number of unregistered estate agency in the study area.
Limitations
The researcher faced various problems when carrying out this field study. Some of these challenges included:
- Some respondents were unwilling to fill the questionnaires since they were suspicious about the study. Many perceived it as sharing very vital information which they were not ready to furnish the researcher with.
- Delays were experienced from the respondents who took very long to complete filling the questionnaires and constant postponement of the picking date proved to be very frustrating to the researcher. This could be attributed to busy schedules and had both cost and time implications on the researcher since the set timelines had to be changed and many follow-up calls and visits had to be made which was quite expensive.
- Landlords were hostile and very suspicious of the research.
- At times some of the respondents did not fill in the questionnaires adequately and ignored certain sections that required the giving of opinions which made it difficult for the researcher to make adequate conclusions.
1.7 Operational Definition of Terms
Assessment: According to
Cambridge English Dictionary assessment is the act of judging or
deciding the amount, value, quality, or importance of something, or the
judgment or decision that is made
Proliferation: Proliferation according to Oxford English Dictionary is a rapid increase in the number or amount of something.
Estate: Cambridge
English dictionary define estate as a property or a large area of land
in the country that is owned by a family or an organization and is often
used for growing crops or raising animals: It’s a typical country estate with a large house for the owner, farm buildings, and estate workers’ houses.
Estate agent: Collins
Dictionary define estate agent as someone who works for a company or
clients that rents or sells houses and land for people.
Real estate: According to Investopedia Real estate
is property comprised of land and the buildings on it, as well as the
natural resources of the land, including uncultivated flora and fauna,
farmed crops and livestock, water and mineral deposits.
Market: According to
business dictionary a market is an actual or nominal place where forces
of demand and supply operate, and where buyers and sellers interact
(directly or through intermediaries) to trade goods, services, or
contracts or instruments, for money or barter.
1.8 Background of the Study Area
Abuja was formally a town under
traditional emirate of Suleja in Niger state, north central of Nigeria.
The town is situated along the river Iku, a minor tributary of the river
Niger at the foot of the Abuchi hills and lies at the intersection of
several roads. The emirate’s savannas areas of approximately 2,980sqkm
originally included four secondary Koro Cheifdoms that paid tribute to
the Hausa kingdom of Zazzau. In the period 1804, Zaria, the capital of
Zazzua (220km North-Northeast) was captured by warriors of the Fulani
jihad (holy war). Muhamman Makau, the king of Zazzua (Sarkin Zazzua)
guided a large section of the Hausa nobility to the Koro town of Zuba
(10km southwards)
Abu Ja (Jatau) the brother of the king
and later his successor, founded the town of Abuja in 1828 and a year
later started the construction of the town wall. Abu Ja then proclaimed
himself the emir of Abuja and withstood Zaria’s attacks, allowing Abuja
emirate to remain an independent Hausa refuge. During the reign of Emir
Abu Kwaka (1851-77), trade with the Fulani emirate of Bida (Westwards)
and Zaria began. But the trade route between Lokoja (160km
South-Southwest) and Zaria was disrupted by Abuja’s leaders, resulting
in the British occupation of the town. During the reign of Emir Musa
Angulu (1917-44) alluvial tin mining began.
A Hausa emir who retains advisory role
oversees the traditional emirate, with its predominate Gbari (Gwari) and
Koro population. During the administrative reorganization in 1976,
Abuja town became the headquarters of a local government council. The
town was renamed Suleja in the late 1970’s after development began on
the urban area of federal capital territory of Nigeria (FCT). The new
Federal capital adopted the name Abuja.
ECONOMY AND POPULATION OF ABUJA
Abuja although is said to be bless with
natural endowment such as; its rolling hills, isolated highlands and
other endearing features which makes it a delight. The savannah
grassland of the north and the middle belt, the riches of the tropical
rain forest of the south and equable climate all combined make the city a
soil rich agricultural and tourist heaven. But despite all this, the
city is not economically buoyant due to absent of industrial activities.
Projection called for a population of more than one million early in the 21st century, the population estimate as at 2006 stand for a four million with annual growth rate of 2.8
PHYSICAL DEVELOPMENT OF ABUJA
Abuja created in 1976 by the federal
military government of the late general Muritala Mohammed via decree No.
6 of the same year; it officially replaced Lagos in December 1991after
fifteen years of planning and construction. The city was divided into
two zones; central zones contains the national assembly, the city hall,
national cultural institution, government related offices that include
the administrative headquarters of all federal government ministries and
parastatals, also major private sector organizations and foreign
missions. The second zone provides housing, shopping facilities and
other urban amenities.
GEOGRAPHICAL LOCATION
The federal capital is located in the
geographical center of Nigeria. It has a land area of 8,000square
kilometers. It is bounded on the north by Kaduna state, the West by
Niger state, the East and Southeast by Nasarawa state and Southwest by
Kogi state. It falls within latitude 70o20”north of the equator and longitude 60o45”and 70o39’.
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