There is obviously a secret plan being nurtured and promoted by a group of real estate developers who think they are influential enough to rubbish democratic good governance in the country by being regulators at the time. The plan has recently manifested in the current real estate bill in the National Assembly ostensibly sponsored to satisfy their selfish agenda not for bringing sanity into the system. Let me make it clear at the outset that I’m not opposed to regulation or establishment of a council that will guide the operations in the real estate sector and restore the confidence of subscribers. That subscribers are daily fleeced by some unscrupulous players is an ugly tale that leaves a sour taste in the mouth, no doubt. About four months ago, the Senate blinked its eyes away from some contentious clauses and wrongly passed the Real Estate Regulation and Development Bill 2021. And any moment from now, the bill will land in the House of Representatives for concurrence. Therefore, it is at this point that the need to call the attention of the Honourable Speaker, Rt. Hon. Femi Gbajabiamila, to the many incongruities in the provisions of this bill is most necessary.
For a start, this bill is supposedly passed to provide efficient, effective and transparent administration of the business of real estate development in Nigeria. But from what objective stakeholders in the real estate sector have seen, the bill has in many ways placed statutory powers squarely in the hands of just one group, Real Estate Development Association (REDAN). Apart from making REDAN a judge in its own case, a clause in the bill gratuitously gives the association power to have three of its members each on the investigating and arbitration panels. This should not be so, simply because REDAN is a private association of a separate group of stakeholders in real estate development registered through its trustees under the Companies and Allied Matters Act.
Consequently, REDAN is just one of the many stakeholders in the real estate business in Nigeria. There are many more stakeholders in real estate development that are not members of REDAN and are in direct competition with members of REDAN in the estate development business. Passing this bill the way it is will vest some powers on REDAN to micromanage the regulatory agency such that the stooges they impose on the Council will edge some of their competitors out of business. And to further rub salt on the wound of other competitors and worsen their fears, one clause provides that the Chairman of the Governing Council shall be appointed by the Minister on the recommendation of REDAN; and another one of the several abominable clauses say two persons from each of the six geopolitical zones shall represent REDAN, and that the secretary of the Council shall be appointed by Council on the recommendation of REDAN. What a bill! Allowing REDAN to arrogate such powers on itself is not only contrary to its registered objectives but akin to repealing the Nigerian Communication Act 2003 to give private telecoms operators (such as MTN and Airtel) powers to appoint members of NCC board and sanction other service providers for infraction. For instance, what do you think will happen if you give commercial banks powers to recommend the appointment of members of the CBN and NDIC boards? This is exactly the case! There won’t be effective regulation.
As passed by the Senate, the bill contains some disturbing clauses which confer special powers on a private stakeholder, REDAN that is, whose members are also competitors in the estate development industry. Some of these worrisome clauses include the powers given to the Council created to regulate the business of real estate development in Nigeria to carry out these regulatory functions in consultation with REDAN which, as stated earlier, is just one of the many competitors in the real estate business. To now place REDAN head and shoulders above other competitors through an invidious legislation such as the one currently being considered in the parliament is an egregious assault on the collective sensibilities of other critical stakeholders in the business.
Another curious aspect of the bill is that only a member of REDAN can be appointed council chairman by the government. For an association that is cornered by a small clique of developers, one can easily predict who will be the pioneer council chairman. To say the bill is an unpardonable flaw in equity is an understatement. Through the institutional guidelines of REDAN, the bill gives the Council the power to register and license all real estate developers in the country. One of its clauses gives the Council an undeserved power to monitor, investigate and sanction registered and licensed real estate developers that violate the bill through REDAN, and another clause in it provides that the Council shall prescribe fees, fines and charges to be paid as recommended by, wait for it, REDAN!. And there are many more clauses that are so atrociously tilted in favour of REDAN that any careful and dispassionate observer would readily conclude that there is an evil agenda to put the management of real estate development in the country in the hands of a few privileged people. But then it is pertinent to ask at this juncture whether REDAN can be vested with the statutory powers of this bill as passed by the Senate. The answer would be a capital NO for the reason that REDAN is a registered association of real estate developers under the Companies and Allied Matters Act as incorporated Trustees in 2002, and nowhere in its constitution is there a provision that mandates REDAN to operate as a regulator of real estate development in Nigeria.
I’m a protagonist of regulation in order to checkmate and rid the sector of sharp practices. But some of those promoting the bill are trying to perpetually hide their malpractices behind the shadows of the bill. Currently, one of the proponents of the bill has failed to appear before an ad-hoc committee of the House of Representatives investigating such sharp practices. He who comes to equity must come with clean hands! It is therefore a development that generates extreme shock to see a registered association of real estate developers deviating from its registered objectives and now metamorphosing into a regulator of the business in the country. One important question should be asked of this curious development: At what point, for example, did the constitution of REDAN make it compulsory for only registered members of REDAN to be licensed as developers who are involved in the business of real estate development in the country?
At the risk of stretching the argument to a different level, I dare say it is even wrong to create a council to regulate the sector. This is because real estate is traditionally a meeting point of experts from different related professions like Engineering, Architecture, Building, Quantity Surveying to mention but a few. These are professions that are already regulated by their councils and regulatory bodies. But let there be the Council that is neutral and legislation that will attract investors and growth in the sector, not legislation that will be skewed and antithetical to growth.
Without mincing words, I will advise the lawmakers to critically look at these issues, thoroughly examine the many grey areas, expunge the contentious clauses or entirely reframe and represent it afresh in such a way that developers will have nothing to do with regulation or recommending the appointment of a regulator.