In Lagos State, fraudulent operations by unreal and seemingly licensed real estate agents against accommodation seekers are a common threat. According to Mondaq, more than 200 potential tenants were duped by alleged bogus real estate brokers In 2019. These fake real estate actors use a variety of strategies, from misleading property listings for which they lack legal ownership or capacity to vanishing into thin air after receiving rental payments and relevant money. Numerous people expressed concern over this tragic trend, primarily heard by security authorities.

The legislative branch of the state government stepped in to stop this threat. A law was passed, and the Lagos State Real Estate Regulatory Authority (LASRERA) was established to end the actions of impostors, fraudsters, and ostensibly accredited real estate brokers who engage in shady tactics.

This article expands on the rules and regulations guiding the real estate sector of Lagos state and Nigeria as a nation.

Establishment of LASRERA

The Lagos State Real Estate Regulatory Authority (also known as "LASRERA" or "Authority") is established by the Law as the body tasked with carrying out these regulation requirements. The LASRERA performs a variety of duties, some of which are as follows:

• Looking into complaints and petitions against registered individuals or organizations engaged in real estate transactions
• Registering tenancy agreements
• Monitoring and conducting inspections to ensure compliance with the Lagos State Tenancy Law
• Developing and recommending policies to improve real estate transactions, and
• Mediating and resolving real estate-related disputes.

What Does Real Estate Transaction Mean?

Real estate transaction refers to any financial, service, or other exchange involving real estate in the State between an individual or group of people and the general public. It also includes any real estate deal where one or more principals hire an agent to represent them.

Foreign Involvement in Real Estate Transactions

Every foreign (non-Nigerian) individual or corporation seeking to invest in real estate in Lagos State must now seek the Governor's permission through the Authority following the Real Estate Transactions Law. Also, the Law states that a foreigner's investment in land can last up to twenty-five years, including any opportunity to renew.

This is, however, subject to the terms of the Lagos State Real Estate Act17 and any other applicable real estate laws, as well as the Acquisition of Land by Aliens Law17.

Registering as a Real Estate Agent; Eligibility and Conditions

According to the Real Estate Transactions Law, several requirements must be met before a person or organization can work as a real estate agent in Lagos State. These requirements are:

1. As an individual;‍

• Should be eighteen years and above
• Must be a Nigerian.
• Own a valid work permit if a non-Nigerian
• Have a minimum educational qualification of NECO, WAEC, OR GCE.
• Have LASRRA (Lagos state residents registration agency) number.
• Have at least a business name registered with the corporate affairs commission (CAC).
• Have a confirmed office or company location in Lagos State.
• Possess a tax clearance certificate dating back three (3) years before the registration date.
• Keep accurate records of all transactions and run a separate client account

2. As an organization;

• Be registered with the corporate affairs commission.
• One of the directors of the organization must meet the requirements outlined in the “individual” subsection
• Have a task clearance certificate of 3 years before the registration
• verify that all non-Nigerian directors are in compliance with all foreigner-related regulations and have valid work permits;

Permits

According to the Law, anybody engaged in the real estate business must be eligible for registration and pay a charge set by the Authority to receive a permit. Suppose an individual or organization engages in any service, mortgage, or financial transaction with the public regarding matters about real estate, including any transaction in which an agent is employed by one or more principals (landlord or any person who owns a building or structure). Upon fulfilling certain conditions, they may be eligible to register.

The Authority will grant various permits depending on the applicant's classification (individual or corporate). The Regulatory Authority's permission has a one (1) year expiration date. The permit may be renewed (not later than two weeks before it expires ) if the renewal requirements outlined in the Law are satisfied.

Database of Uncompleted Buildings

Under the Law, uncompleted/abandoned buildings are;

• Buildings left undeveloped due to shortage of funds
• Structures that abhor criminals and encourage criminal activities
• Facilities that threaten the safety of the community
• Buildings that enhance environmental degradation
• Buildings that constitute a nuisance

When the relevant MDAs (Ministry, Department, and Agencies) that a structure falls under any of these categories, a notice will be given to the owner of the building to complete the construction of the facility or do something about it within a period that is to be determined by the Authority.

Applicable Fee

A person or organization that deals in real estate may not charge a fee greater than ten percent (10%) of the total rent or purchase price a customer pays for a lease or sale. For instance, the permit holder cannot demand more than 100,000 Naira (N100,000) from the tenant in a tenancy transaction if the rent for the property is one million Naira (N1,000,000) per year.

In addition, if a principal retains two or more permit holders in the same sale or lease, the permit holders must jointly seek a sum that is no greater than fifteen percent (15%) of the gross profits from the sale or lease of the property interests. This will aid in defending the populace against extortion.

Committee of Inquiry

A committee of Inquiry by the Authority, to be known as "the Committee," with the primary duty of hearing and deciding claims of misbehavior or petitions from the public against individuals or organizations dealing in real estate in the state can be created, as permitted by the law.

The Committee will invite the relevant permit holder to make an oral or written representation within two (2) weeks of receiving the notice or complaint and may also request any other person to make a representation regarding the topic after considering the public report.

If the Committee determines that the accusation is accurate, it may propose to the Lagos State Real Estate Regulatory Authority Governing Board (the "Board") that the permit be suspended or revoked. Not later than one (1) month after the hearing is over, the Authority must serve the affected parties with the Board's decision.

In Conclusion,

One of the industry's significant issues has been Unlicensed real estate brokers' fraudulent actions and cunning tactics designed to take advantage of potential buyers and tenants. The absence of an appropriate framework governing real estate transactions has significantly contributed to this issue. This issue is addressed by the Law, which mandates expanded and enhanced standards that must be upheld by all parties participating in real estate transactions.

This is the right step, and it is hoped that it will be appropriately put into practice to accomplish its goal. Other real estate laws in Nigeria regulate anything from land sales to property mortgages to tenancy issues, among other real estate-related activities. These laws were passed to ensure a unified approach to real estate transactions, whether people are purchasing or renting, to provide guidance on buying and transferring real estate interests, and to generate money for the government. They will also ensure that genuine real estate companies and agents in Lagos thrive without industry threats from fraudsters.