The Lagos State Government through the Lagos State Estate Agency Regulatory Law, Cap L28, Laws of Lagos State, 2015 ("Law") established the Lagos State Real Estate Regulatory Authority (LASRERA), the regulatory authority was established to look into real estate transactions in Lagos State by identifying persons eligible to be licensed as Real Estate Practitioners and provides for the issuance or renewal of annual permits, as well as collating and registering real estate transactions in the state, the regulation is essential to checkmate the activities of fraudsters in the sector.
To monitor the activities of real estate practitioners in Lagos, the agency recently launched its official website and registration database for real estate practitioners. The law makes it mandatory for all real estate practitioners to be licenced and further empowers the authority to sanction the unlicensed real estate practitioners in the real estate industry in Lagos State.
Practice guidelines for real estate practitioners
The regulatory body issued guidelines to monitor the activities of real estate practitioners and developers in Lagos States. It provides for the following;
- The guidelines prohibit an unlicensed Estate Agent/Property Developer from carrying on the business of real estate unless such agent is licensed with the regulatory body in the state.
- A licensed real estate practitioner is required to be registered with the Corporate Affairs Commission (CAC) and must, in addition, have business premises.
- The guidelines require a licensed real estate practitioner to keep records of business transactions, and shall open a separate client's account.
- A real estate practitioner is also expected to ensure that his client performs all his obligations to the Government under the existing laws, such as the deduction and remittance of Withholding Tax, Valued Added Tax or other charges payable on the property he handles.
- The guidelines prohibit a Licensed Estate Practitioner from collect money from more than one prospective tenant or purchaser in respect of the same premises, it further requires him to remit any money in respect of the transaction to the landlord within fourteen (14) days of receipt, unless otherwise directed in writing by the landlord, such money collected shall be receipted for.
- According to the guidelines, a real estate practitioner shall not charge more than 10 per cent of the total rent collected on any transaction and where the transaction involves sale or purchase of an interest in lands or building and two or more agents are retained by the owner/vendor for the sale, the fee shall not be more than 15 per cent of the total proceeds of the sale.
- A Licensed Real Estate Practitioner shall not prepare any legal document pertaining to any transaction handled by him but such a document must be prepared by a Legal Practitioner and the fees shall not be more than 12.5 per cent of the total consideration.
- A Licensed Estate Practitioner shall not act for two (2) principal (Clients) on a transaction and shall only be paid by his principal only.
Registration requirement and benefits
The requirements for registration with LASRERA are:
- Evidence of CAC registration
- Means of Identification
- Operational Office Address
- Minimum Qualification (Senior School Certificate Examination SSCE)
It is expected that the new development will bring effective regulation, transparency and accountability to the real estate sector in Lagos State, also, it will provide credibility and facilitates documentation Processes.
The real estate sector in Lagos State has been taken over by some impostors and fraudsters who claim to be accredited building or housing sectors practitioners, but whose sole objective is to defraud unsuspecting members of the public who engage their services in renting, leasing, buying, and selling and property development, it is expected that this new registration requirement with LASRERA will restore sanity into the real estate sector. The regulatory body is empowered to prosecute any real estate practitioner found violating the provision of the guidelines. It is also expected that some states in Nigeria might adopt this same regulatory approach in their real estate sector.
Originally published by Famsville Solicitors, July 2020
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