Otunba Victor Ayeye, is the Publicity Secretary of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) and the Chief Executive Officer of Ayeye and Co Estate Surveyors and Valuers.In this interview with Kingsley Alu, he bares his mind on issues affecting the property sector including the Land Use Act.
Is there any difference between members of your institution and other property agents?
Yes there is. We are the only body certified by law by the Federal Government by virtue of decree number 24 of 1974 now Cap 3 of 1990 to practice estate surveying and valuation which includes estate agency, property management, property development, valuation, appraisal etc, and we have a regulatory body called Estate Surveyors and Valuers Registration Board of Nigeria (ESVRBN). Any other person involved in this profession and is not registered with any professional body is a quack.
What distinguished us most from others is the quality of the services we render. Our members don’t dupe people; they don’t take people to properties that do not exist. Our professional code of conduct sets us apart from other property agents. I dare say here that our logo is always proudly displayed in our offices.
Recent statistics show that one in every 10 Nigerians is homeless. Incidentally, the housing deficit of about 16million we talk about is in the lower-end of the property market. What do you think could be done to create a balance in the market?
As you rightly pointed out, there are several vacant houses waiting to be occupied in the cities. The reasons are not far-fetched; a developer would rather build where he is sure he would not have problems collecting rent on the property. The scenario at the lower- end segment representing the suburbs is quite different. The people here most times, are financially weak or so it seems. As a developer, you took a loan from a bank to build a property and somebody rents it, stays for two years and after that period, he refuses to pay. It becomes even a tug of war to eject him from the apartment.
Why? Because the repossession law in this country is very faulty. That is why so many tenants would dare you to take them to court because they understand that the repossession law was tailored to favour them more than the landlords. So, investors are not encouraged to build for people in this segment of the market and that accounts for the deficit we have today. Until federal government addresses the repossession law, things would remain the same.
Have you made your position known to the government?
When the late President Yar’Adua was in charge, we sent not less than 16 proposals to the Senate without getting any feedback and that is strange.Same goes for the House of Representative. It is funny because everybody seem to know that housing issue is becoming a big challenge in this country yet, we treat it with kid gloves.
We have taken a position that the land tenure system should be re-visited for obvious reasons.
By virtue of the Land Use Act number 6 of 1978, lands in the territory of a state are invested in the governor. What that translates to is that before you could transfer what you own, there has to be a governor’s consent and it takes from a minimum of three years to eternity. That means that I cannot even transfer what I own when I want to transfer it. Again, the charges on the transfer are quite enormous. I must tell you that only about fiveper cent of lands in this country are registered. So, Government is losing because it could have made so much money from taxes accruing from non-registered lands. They are losing so much and making the whole economy difficult to run.
The Land Use Act was hurriedly assembled during the military era and you cannot amend it because it has to be amended with the constitution. Our position is that government should remove it from the constitution and make it a document. In that way, it could be amended. Look at the compensation provision of the Act, is it adequate? It said that due to overriding public interest, government could acquire a land and give the owner what it deems fit.
They forgot that value and cost is not the same thing. They can pay you the cost of the building, but what is the value of the building as at that time? A house that costs you 5 million naira to build could have a value of 15 million naira. So the compensation provision is inadequate.
Amendment to the Act can only be meaningful when a committee is set up and professionals in the built environment are engaged for inputs. The professionals are the ones who have interface with the end users and so, they should not be taken for granted. We are not asking for money to show government the way out of the woods.
Recently, there was a Rent Control Law in Lagos and we are aware that your members criticised it why?
Our members did not criticise but faulted the process in the sense that you cannot control what you don’t own. For instance, I own a property, government wants to control it; it can’t work because government did not know how I got money to buy land and develop the property and also the ordeals I passed through.
Assuming government decided to assist those who want to invest in properties to get for instance, a loan at one digit between one to nine per cent, then there would be enough justification for the Rent Control Law. But since they have never assisted the property owners, they cannot control the rents they collect, that would be acting ultravires.
Government failed to see the wisdom in acting with discretion. They did not confer with stakeholders. If they had engaged us; we would have told them what to do.
The bane of any government is bad advisers and it is very unfortunate that some of those advising the Lagos State government don’t even have the faintest idea about the operations of the market; they are not professionals.
Instead of controlling rent, government should open up satellite areas. Let there be good roads. Unfortunately, there are no good roads, no water, and no light. So everybody wants to stay in the city and that is why the rents in the city would continue to be high. When government opens up satellite areas, house rents in the city would naturally fall. The forces of demand and supply will naturally prevail because people would have no need to live in the cities.
Past experiences have shown that available funding through the National Housing Fund (NHF) cannot meet housing demands in the country. Can you suggest a way forward?
Government should make sure that interest on loans should be reduced. At a point fixed deposit was reduced from 16 per cent to about 6 per cent. The idea was to discourage people from keeping money in the bank. Government wanted people to use the money to do business. While the interest rate for fixed deposit was reduced, it was not the same story for interest rate on loans.This is an option they must explore.
If the government reduced the rate for loan to say about three per cent, one could invest in properties. It is only in this country that people use their money to do business. All over the world people survive on loans. In Europe, if you want to buy a property for say, 50 million naira and you brought out the money, you would be probed. There is no room for short standards.
All the people in Europe that have houses are on mortgage. Mortgage is virtually in all the banks. It is only here that somebody could pack 200 million naira cash to buy a property and nothing happens to him and he even brags about it.
Federal Government should make loans accessible to everybody. They should create a good data system that would ensure that when they give people loan, the beneficiaries won’t bolt away because they are traceable. The NHF is incapable of tackling the 16 million housing deficit in the country.