As a player in this industry for upward of 10 years, I’m quite aware that this day will come moreso given my training in risk management. I am sure that there will be a day like this where governments will tie up the loose end in real estate industry and provide a benchmark of what is obtainable in the developed world as a basis for real estate operation in Lagos State.
The general Outlook of this new regulation has three basic angles the law seeks to address and the angles provide both regulatory and legal framework for the real estate industry and operators in Lagos State which happen to be the highest source of resources and revenue inflow for Lagos State government.
The regulation also seeks to protect from continuous cases of fake real estate transaction promoted by fraudsters in Lagos State and at the same time provide avenues for complete transaction capturing as a basis to enhance government revenue and the collection of both vat and capital gain tax.
Over the years Lagos State government have continuously and consistently received complaints from dubious real estate operators over failed real estate transactions.
There are a lot of real estate transactions in Lagos not captured by the government. The basis for capturing real estate transactions is true registration of documents of which most people just buy property and never refuse registering the documents and as a government that wants to increase its revenue base.
As it is, no one can reasonably determine what the transaction cost of a real estate transaction could be. But this law have provided a regulatory framework an idea of what it is.
Highlights of the regulation.
Upon the signing of the law it is a crime to be engaged in any real estate transaction as a company or as an individual.
What this means is that if you have your property you have to engage a real estate broker to help you .No One deals in real estate in Lagos without having a licence that authorised him to operate and his licence is issued by a government agency called, Lagos State Real Estate Regulatory Agency, LASRERA
Why real estate firm are to pay about a million naira real estate brokers or agents are to pay 500,000 naira renewable every year.
Once there is a database of all operators,the government agency will act as an arbitral in the event of a complaints from the public and ensure that interest of the public are protected at most people will not want to lose their licensing
2. The law also highlight the cost of transaction. This has put to rest what amount is permissible to charge on real estate transactions in Lagos State for the brokers the upper boundary is 15% on all real estate transaction and for lawyers who’s role is now agreement drafting unless they are also licensed to deal shall charge an amount not exceeding 12.5%. the total expendable cost of real estates is put at 27.5% maximum.
However, depending on the value of transactions this fee can further be negotiated down and it is chargeable on the owner of the property not the buyer.
3. It also put to rest the ratio of VAT and capital gain tax
The source of land are not vatable in the laws of federal Republic of Nigeria. However any development on land are vatable and the responsibility of payment and coordination is on the real estate brokers.
The implication is that consumers of real estate in Lagos are now protected as real estate companies are now traceable.