The bill, proposed by Senator Aliyu Wamakko, favours an association headed by the senator’s brother.
The Nigerian Senate recently passed a bill that would empower an association of real estate companies to not only regulate its members but also regulate its competitors and others in the industry.
The bill has now generated so much controversy with a lawmaker describing it as the most ‘selfish’ bill she has seen passed by any of Nigeria’s houses of parliament.
Sponsored by Sokoto senator, Aliyu Wamakko, the Real Estate Regulations and Development Bill essentially turns the Real Estate Development Association of Nigeria (REDAN) into a quasi-regulator. REDAN’s powers, as granted by the bill if it becomes law, is so much that the Nigerian president cannot appoint the head for the new regulatory body without REDAN’s ‘recommendation.’ Perhaps coincidentally, REDAN is currently headed by Senator Wamakko’s brother, Aliyu Wamakko.
“It’s like a group of old generation banks forming an association and then asking the government to empower the association to regulate all other Nigerian banks,” a real estate developer told PREMIUM TIMES. “What we want is an independent regulator, a government regulator, not a REDAN regulator.”
The proposed law will not only regulate the real estate sector in the country but will also stop unscrupulous developers from defrauding intending homeowners who pay and never get the houses. This is what the sponsor of the bill and its backers told Nigerians to expect if the legislation is passed and eventually signed into law.
Senator Wamakko said the bill will protect the interest and investment of participants and investors in the sector as well as ensure that transactions are done in a transparent manner, which will boost confidence in the sector.
During the lead debate at the Senate plenary of June 22, 2021, he told his colleagues that the legislation will also engender speedy development in the sector, as investors will not have to entertain fears of lack of legislation regulating the sector and the multiplier effect thereof.
“The real estate has been largely unrelated with absence of professionalism, leaving customers at the mercy of fraudsters,” Mr Wamakko told other lawmakers.
“It would, therefore, guarantee legitimate transactions in lands and landed properties and completely discourage the involvement of charlatans in the real estate dealings. To that end, the Act mandates the appropriate government (Federal, State and Local Government) to establish the Real Estate Regulatory Authority in existing land registry to enforce the proposed Act, with a view to protect the interest of customers in the sector and provide a mechanism for ensuring compliance,” he said.
Five months later, in November, the upper chamber passed the bill.
It was passed after the Senate considered the report of its committee on Establishment and Public Service – which was mandated to conduct a public hearing and other legislative work on the bill.
The legislation was announced as passed by the Deputy Senate President, Ovie Omo-Agege, who presided over the plenary on November 17, 2021. It was thereafter sent to the House of Representatives for concurrence.
Mr Wamakko’s claims about the need for a regulator for the real estate industry are true. Many Nigerians have complained about being scammed or poorly treated by real estate companies, especially in Abuja, the Nigerian capital.
PREMIUM TIMES reported how estate developers take advantage of Nigerians who patronise them. The report highlighted the experiences of Nigerians who subscribed to real estate plans by different developers but after making full payment, the developers failed to deliver what was agreed.
The complaints prompted the Speaker of the House of Representatives, Femi Gbajabiamila, to constitute an ad hoc committee chaired by Blessing Onuh (APC, Benue) to investigate the real estate sector in Abuja.
While Mr Wamakko’s claims about the need for a regulatory bill is true, regulating the real estate sector and stopping scammers from defrauding unsuspecting Nigerians are only part of the entire prescriptions of the bill.
On the day he spoke, Mr Wamakko did not tell his colleagues about the power the bill gives to REDAN which describes itself as the principal agency and umbrella body of the organised private sector (public and private) responsible for housing development in Nigeria.
Although the bill seeks to establish a Real Estate Regulatory Council, it says such will be done ‘in consultation with REDAN.’
Some controversial provisions of the bill:
** The Council is empowered to renew the license of real estate developers annually, upon payment of the prescribed fees and fulfilment of all requirements as recommended by REDAN.
** The Council shall register, maintain and update the register of all real estate development projects ratified by REDAN to have met set standards of Industry practices.
** The Council shall work through REDAN to monitor, investigate and sanction registered and licensed real estate _ developers that violate the provisions of the bill. It shall also work through REDAN to investigate and penalise unlicensed real estate developers that violate the laws.
** The Council will also prescribe fees, fines, and charges to be paid – as recommended by REDAN.
** The Council shall have a chairman, appointed by the Minister on the recommendation of REDAN. And a Secretary of the Council; who shall be appointed by the Council on the recommendation REDAN.
** The Minister may remove the chairman of the council from office on the recommendation of the Council and or REDAN, if the Minister is of the option that it is not in the interest of the Council for the chairman to continue in office.
** A total of 10 per cent of the annual revenue of REDAN is to be paid to the Council’s fund.
Mr Wamakko, the senator, did not respond to calls and messages seeking to know his stance on the controversial sections of the bill. PREMIUM TIMES also reached out to over 50 senators on the matter. Only a few of them responded to our enquiry but even they said they would not speak on the topic. Another, who spoke but asked not to be named, said he has not read the bill.
However, the bill now faces stiff opposition from an unlikely quarter: the House of Representatives.
The House of Representatives ad hoc committee led by Ms Onuh, after meetings with key stakeholders, described the bill as selfish, saying it should be jettisoned.
Although the bill has scaled first reading at the House, the committee insists that there is no clear regulatory legal framework for estate developers in the bill, hence the proliferation of incompetent, inefficient and fraudulent developers with the tendency to mislead the public.
“I am not against the regulation of the industry,” Ms Onuh told PREMIUM TIMES. “The way it is, it needs complete overhauling. We need to sanitise that sector. People are being defrauded every day because of some unscrupulous developers.
“Notwithstanding, this bill is not it. Almost all the clauses are selfish. It is lopsided. If you are making a bill, do something that will favour the people, all the stakeholders and all the parties involved,” the lawmaker, a member of Nigeria’s ruling party, said.
She wondered why REDAN, as an association, will seek to push for legislation that will favour the group alone.
She also explained that the committee has, to no avail, tried to change some provisions of the bill.
“We even thought of expunging some clauses but in almost all the clauses, you will see the mention of REDAN. There are other associations there. You can’t just give power to one to do almost everything.
“You say you want to create a council but in all the clauses, you will see that you have to liaise with REDAN or have REDAN recommend. They have the power to fine and charge fees and all, and you say it is in the interest of Nigerians.
“We had a meeting with FCTA including the minister and we all agreed it is not a fair bill,” she said.
PREMIUM TIMES saw a communique co-signed by Ms Onuh as chairman of the House ad hoc committee on real estate and Shehu Hadi, the executive secretary of the Federal Capital Development Authority.
The communique, produced in February 2022, was the final outcome of a series of public meetings the House committee had with the Abuja authorities, real estate companies, homeowners and other key players in the Nigerian capital.
“That the proposed REDAN bill is unrealistic and should be jettisoned,” the communique stated.
Prior to the House committee’s opposition to the bill, a group, known as Rainbow Push Coalition Nigeria, petitioned the Speaker of the House, Femi Gbajabiamila – through their counsel, West Idahosa, a former lawmaker.
The group cited over 10 clauses which it tagged offensive.
“From the analysis of the clauses and submissions made above, it is clear that the whole idea of passing the bill was to concentrate the functional regulation of real estate business in Nigeria as a means of production in the hands of a few individuals under the registered acronym of REDAN.
“The practical effect of the REDAN clauses is to reduce competitors like our clients to on-lookers in the real estate business. How can the multitude of stakeholders in the estate development industry, including individuals, corporate bodies, mortgage companies, financial institutions be at the mercy of a few persons who merely incorporated a trustee years ago?”
The group said all references to REDAN should be removed from the bill.
Many other Nigerians have taken to social media to accuse the Senate of turning a blind eye to the provisions of the bill and nurturing a secret plan, promoted by a group of real estate developers, to rubbish democratic good governance in the country.
A defiant REDAN
Mr Wamakko, the REDAN president, did not respond to calls and messages by PREMIUM TIMES.
But his association has restated its support for the bill.
The association claims that “wicked” lawmakers with ulterior motives are the ones opposing the bill in the House.
In a press release published in the Leadership newspaper, REDAN noted that the lawmakers’ concern was the power given to it.
It asked that the legislation should not be discarded on that ground and also called for a “robust public hearing.”
“Indeed, no matter the demerits of the bill, in our view, the baby should not be thrown away with the bathwater. There is a need for the sector to be regulated within the stipulated law of the land to properly position it to attract foreign and diaspora investors into the sector.
“Without proper regulation, the sector might not be that attractive for investors given the activities of some unscrupulous elements in the industry.
“Consequently, we call for a robust public hearing on the bill in the House of Representatives so that they can be properly guided in their deliberations,” REDAN stated.
For Ms Onuh, however, the selfish nature of the bill and the overwhelming power it gives to REDAN means it is better to have a different law to properly regulate the real estate sector.
She told PREMIUM TIMES that a separate bill has been introduced in the House.
The bill she co-sponsored with nine other lawmakers, proposes the establishment of an agency that will regulate the Abuja real estate sector – an agency solely controlled by the government.
The government should be the regulator of the real estate industry, not REDAN or any private association, she said.
“We are proposing an agency to be regulated by the government – a central body, just like what Lagos State has done,” she said.