In this report, EDIDIONG IKPOTO writes on how fraudulent property developers who masquerade as legitimate estate agents defraud unsuspecting house seekers
A 34-year-old software developer, Abiodun Oguntade, who now lives in Mende, Maryland, recently fell prey to the antics of a fraudulent property developer.
Oguntade stated that the developer took advantage of his naivety to swindle him of a N300,000 down payment for a one-bedroom flat he had hoped to rent in the Gbagada area of Lagos.
But he is not the only Lagos resident to have swallowed this bitter pill. In fact, when the victims of such scams tell their stories, Oguntade will stand behind a long line of people who have lost twice or thrice as much as he lost to fraudulent developers.
Only last month, a suspected fake developer, Ahmed Ayinde, was arrested by men of the Lagos State Police Command for allegedly defrauding no fewer than 100 prospective tenants in the Olowo Ira area of the state.
The PUNCH gathered that the victims paid for different flats in a one-storey building on No 5, Ayedun Street, Olowo Ira, being developed by Ayinde.
After receiving payments, it was learnt that Ayinde and his accomplices told the prospective tenants that they needed some time to complete renovation works on the building.
It was agreed that after the renovation was completed, keys to the respective flats would be handed over to the tenants.
However, drama started when efforts by some of the prospective tenants to access their flats proved abortive.
A victim, Sunday Akinmoladun, said he was surprised that over eight persons paid for the same flat he paid for, adding that a lot of intending tenants were stranded because people had occupied all the flats in the building.
He said, “I paid N300,000 cash for a room into one Ibrahim’s bank account. I paid since March 2021, but could not pack in because they said they were renovating the house. I have been coming to the house almost every day and usually meet an engineer and bricklayers working on the building.
“I was told to come and collect the keys to my flat today when everything changed. I have been calling Ibrahim, but his number is not connecting.”
This particular isolated incident, which featured many victims is just one out of many similar stories that come out of Lagos every year; a reality which begs the question – what is it about Lagos that makes it infamous for the seeming proliferation of fraudulent property developers?
The answer to the question is not far fetched. Living in Lagos is strategic for many, given its comparative advantage with regard to commerce and industry as well as the country’s finest establishments, which in itself provides some level of confidence that this is where skill will meet with opportunity.
With over 500,000 people coming into the city yearly from outside Nigerian shore or regional migration, the United Nations Special Rapporteur on housing, Leilani Farha, put the state’s housing deficit at 2.5 million, while BBC puts Nigeria’s total housing deficit at about 17 million.
As a matter of fact, the frequent occurrence of rental scams in Lagos had propelled the state government to offer pointers towards what could constitute a red flag for prospective tenants, advising them to beware of quacks and fake professionals in the state’s rental market who claim to be landlords and genuine estate agents.
The state in the last 12 months has recorded a spike in rent fraud involving prospective tenants, landlords and agents in cases which the Special Adviser to Governor Babajide Sanwo-Olu on Housing, Toke Benson-Awoyinka, estimated at over 200 in just a few locations.
The locations include Alapere, Ajao Estate, Akoka, Gbagada, and other areas of the state.
The special adviser, while speaking at a stakeholders forum for lawyers in real estate practice, said the case in Akoka involved about 113 house seekers who were swindled of more than N51m, while 66 others were defrauded of N16m in the Gbagada case.
She also cited other cases in Alapere and Ajao Estate areas of the state, pointing out that these victims paid between N200,000 and N500,000 for a limited number of apartments, not more than 20.
Benson-Awoyinka implored house seekers and home buyers to employ the services of genuine professionals like lawyers for all their real estate services, stressing that the state government had decided to put a stop to such fraudulent activities by enacting the Lagos Real Estate Regulatory Authority law.
Boniface Adebayo, a civil engineer and estate manager, who expressed worry about the growing rate of rental scams, said such vices were bound to spring up in megacities such as Lagos, which usually experienced annual urbanisation rate that was higher than average.
“This is a state where, according to a report, there is a housing deficit that is in excess of three million. That is not all; the same report says the state has the most active rental market in Nigeria where over 60 per cent of its 20 million population live in rented accommodation,” Adebayo said.
“It is also said that, on a daily basis, over 600 people come into Lagos and more than half of that number don’t go back, meaning that, at any given time, you have people who are looking for houses to rent. That unending demand for houses to rent is fueling the activities of these fraudulent agents and landlords,” he said.
In Lagos, these fake developers have different modus operandi, which makes it somewhat difficult to tell if one is dealing with a legitimate agent or a charlatan. Nonetheless, there are few indicators that could serve as hints to a prospective tenant that he/she is dealing with a fraudulent individual.
Some of these pointers may include the inability of the developer to show proper practice licence or documentation to back up his claims, insistence on having payments routed through personal bank accounts, inability of the developer to answer certain fundamental questions about the property, among others.
A rental scam victim in the Fadeyi area of Lagos, who simply gave her name as Mary, shared an interesting insight on a popular tactic employed by some of these unscrupulous elements.
She said, “I met this agent who works basically with students in Yabatech and UNILAG. It is according to how much you have, how much you can afford, and he gives a shared apartment. He said there was a three-bedroom apartment and that if I pay my money, he would look for two additional people and then, once the money is complete, he can gather the money and give it to the landlord before we can move in.
(Punch)
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