The Nigerian real estate sector has been plagued by all forms of property scams. Property scams take different forms and can be broadly categorised as Rental Fraud and Fraudulent Sale of Property. Rental fraud involves making potential home seekers/tenants pay rent for a non-existent or unavailable property. It could also involve receiving rent from multiple home seekers under a fraudulent tenancy or lease agreement. Fraudulent sale of property involves the attempt to sell land or property to an unsuspecting buyer by persons who do not own the property or who have no right of sell.
Property fraud is, unfortunately, rife in Lagos due to its enviable position as the commercial capital of Nigeria, its huge and growing population, its inadequate housing infrastructure and the relative high cost of housing.
Desirous of curbing property fraud in Lagos, the Lagos State government passed the Lagos State Estate Agency Regulatory Law of 2007. The law established the Lagos State Estate Agency. The Agency is responsible for licensing estate agents and generally regulating the practise of estate agency in Lagos State. The regulation of estate agency is critical to the successful management and eradication of property fraud. The agency operates under the name Lagos State Real Estate Transaction Department (LASRETRAD). LASRETRAD has reiterated its commitment to protect property seekers and eliminate all forms of property fraud.
LASRETRAD recently announced that it has confiscated properties belonging to suspected fraudulent property developers. It promised to compensate victims of the fraud by selling the confiscated properties in order to indemnify them from the proceeds of the sale. While the intention of LASRETRAD is noble, the authority of LASRETRAD to sell the objects of fraud, which are the properties used to defraud the public, will be examined.
Forfeiture is often used in justice administration to divest a person of legal ownership of a property without compensation. It entails the loss of a right, privilege or property because of the commission of a crime, breach of obligation or neglect of a lawful duty. Forfeiture is often made pursuant to an order of court. Only a court of law can determine the guilt of a person and make orders of forfeiture of property as a punishment or restitution.
The constitutional presumption of innocence means that everyone is innocent until pronounced guilty by a court of law. Therefore, no actions prejudicial to a person’s interest based solely on the presumption of guilt may be taken unilaterally by any agency without an order of court. LASRETRAD has stated that one of the suspected property fraudsters is currently being prosecuted. The proper course for LASRETRAD to take is to seek an interim forfeiture order. When an interim forfeiture order is obtained, all persons interested may then show the court why the interim forfeiture order should not be made final.
Nothing in LASRETRAD’s enabling law, the Lagos State Estate Agency Regulatory Law authorises it to unilaterally confiscate property suspected to be used in perpetrating fraud. It can only seize and sell property belonging to a fraudster and suspected to be an engine of fraud pursuant to an order of court.
Non-compliance with the spirit and letter of the law may get LASRETRAD with all of its good intentions into trouble with the law. Surely, the law is no respecter of persons and good intentions, LASRETRAD will not be an exception if it fails to act in accordance with the law.