De Donnies Homes Nine Observable Rules to Avoid Real Estate Scams in Nigeria - De Donnies Homes

Nine Observable Rules to Avoid Real Estate Scams in Nigeria

real estate scams foreign buyers

A year ago, we posted an article titled "Risk/return analysis of real estate investment in Nigeria" where we explained that real estate is a low-risk investment. The most dreadful risk in this type of investment is real estate buyer scams.

Very recently, two of my siblings and I went for a land dispute resolution. The two plots of land in question belong to my sister. They were bought a few years ago through an agent who doubles as a surveyor. As at the time of the transaction, I wasn't a real estate consultant.

On the day of purchase, the Omoniles (land sellers) signed and presented a deed of assignment and receipt signalling transfer of ownership of the property to the new buyer (my sister).  

This brings us to a rule to observe when buying real estate in Nigeria:

Rule 1: Ensure you document everything. Video the documentation with your phone if you have any form of doubts.

Rule 2: Choose cheques, bank transfer or direct deposit into the seller's bank account over cash payment as such types of payments are easily traceable and can serve as evidence if the deal goes sour.

If you are buying real estate from omoniles, ensure documentation and payment are tied together as a single event that occurred the same day. Duly signed documents should be collected immediately payment is made.

***Back to the land dispute story***

On the day the buyer made payment for the land, the head of the family wasn't around. She spoke with him on the phone and they agreed on a date she should come for allocation. On the agreed day, she was allocated to another area entirely that's though within the same vicinity.

This brings us to a new rule:

Rule 3: If they are not available for allocation, don't make payment. You are at the mercy of the seller once you've made the payment but it's yet to be allocated.

A year or two after the land deal, the agent started mounting pressure on my sister to come and develop the land. It appeared the omoniles were reselling lands there.

This brings us to a fresh rule:

Rule 4: Take possession immediately. Even if you have an intention of selling off the property in future, ensure you take possession now by at least fully fencing and gating it.

Although the buyer had a mini-fence on the land, the seller still encroached on it and resold 1 plot out of it to her neighbour who is already living just-a-plot away. He denied reselling the land, though the new buyer insisted it's been sold to him until I came into the picture. We brought in a police inspector to investigate what was going on and found that the seller is notorious for selling a plot to several buyers.

This brings us to an additional rule:

Rule 5: Investigate the authenticity of the land and character of the seller before buying from him.

Your legal practitioner will be useful here. S/he needs to check:

1. If the land is under government acquisition.

2. If the potential seller is the real owner of the land

3. If the seller/omoniles are fraudulent. This can be verified through the help of the Oba/Baale (king) of the community.

The seller claimed the agent gave him money for just one plot of land even though he signed receipt and deed of assignment for two plots. What the seller attempted hiding from the buyer is the surveyor was rewarded with three plots of land as payment for surveying three acres of land for the omoniles. So out of the two plots sold to my sister, one plot belongs to the omoniles and the other belongs to the surveyor/agent. This explains why the surveyor gave them (omoniles) money for just one plot even though he got money for two plots. That is, one of the plots sold belongs to the omoniles and the other plot belongs to the surveyor.

This brings us to rules 6 and 7:

Rule 6: Never ever pay into an agent's account. Request for the account details of the owners and let it align with the names on the deed of assignment.

Rule 7: Always ask for the history of the land before you buy. The land history will let you know if there might be complications or land disputes in future. That way, you know whether you should avoid that piece of land or not.

Rule 8: Buy from trusted real estate companies. The world is presently a global village. You can always get information about a company's fraudulent behaviour (if any) online by searching Google.

Rule 9: Perfect your document with the government. A two-storey building erected on the land of a Nigeria-born American was demolished at Badagry two years ago. She bought the piece of land twenty years earlier, perfected the documents and went back to the United States only to return to find a building on her land. She went to court, won the case and requested the demolition of the house.

In summary, it all bores down to caution, utmost caution! Be cautious all through and ask questions where necessary. Pause if you don't get a convincing answer. Don't take a pre-shot video for it if you can't make it for inspection due to time or distance barrier because videos can be edited/doctored. You should rather choose to make a live video call on Messenger, Whatsapp, Zoom, Imo etc.

May you not have reasons to cry!

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