PROPERTY ARTICLES

Lagos-based estate surveyor and valuer, Kola Akomolede, sheds some light on the dynamics of the various surveying-related professions as well as related topical issues in an interview with CORRESPONDENT, Bamidele Ogunwusi. Akomolede, who practises privately, laments the delay in processing titles to landed property, saying that not only should the venture be simplified, but that it should also be affordable. Excerpts:

Who is an estate surveyor and valuer?

An estate surveyor and valuer is somebody that is not very well known in Nigeria. First of all, let me tell you that there are three principal branches surveying professions in Nigeria but in the real sense the three are one. These are the estate surveyors and valuers, the land surveyors and the quantity surveyors. I will tell what each of us do. The land surveyor is one that most people know. The job of a land surveyor is to determine the location and size of land. Where we are now, a land surveyor will be able to tell you the exact location by way of what he calls cadastral beacons. Every point in the world has a beacon number. The job of the land surveyor is to determine the location of the land and the size. They also do so many other things like mapping and area survey. The quantity surveyor’s job is to estimate the cost of a building from the drawing made by an architect. If you want to renovate your house, the person that is qualified to give you the estimate for the renovation of the house is the quantity surveyor. The estate surveyor and valuer’s job is to carry out the valuation of a house or land. There is a difference between estimation the cost of building a house and that of the value of the house. For example, if you have a plot of land in Ikoyi that is worth N200 million and you want to build on it and you give the drawing to a quantity surveyor, and then the quantity surveyor says the building will cost N100 million. When the estate surveyor wants to carry out the valuation, the value of that property with the house on it will not be the addition of N100 million and N200 million, which is the cost of the land and the house, because the development of that house would have released what we call a latent value on the land. Latent value means when you develop a land the value will shoot up. Briefly speaking, the job of an estate surveyor and valuer is to give you the value of your property at any given time.

What is the difference between an estate surveyor and valuer and an estate agent?

An estate surveyor and valuer can also be an estate agent. Estate agency is part of our job. But there are estate agents who are not estate surveyors and valuers. We call them quacks. Some of them are school drop-outs, illiterates and half illiterates. There are also some educated ones among them. We have among them lawyers, engineers and accountants. Everybody, when they lose their job, they see estate agency as an easy business.

All they know how to do is to rent and sell houses. That is just a very small aspect of our job. We do valuation but these people cannot.

Why do we need valuation?

We need valuation for so many things. In developed countries, if you want to sell a house, you will call a valuer to carry a valuation and advice you on how much you can sell the house, but Nigerians don’t do that because they don’t want to pay for valuation. Nigerians think they know but they don’t know that they don’t know anything. You need a valuation to know the value of a house if you want to buy or sell a house because the house that is worth N10 million, you don’t want to pay N12 million. If you want to take a mortgage or borrow money and use your property as a security, you will need a valuation report and there is no other person that is qualified to sign a valuation report other than an estate surveyor and valuer. In most developed countries, banks engage the services of estate surveyors and valuers when they want to know the value of the property that somebody wants to use as collateral. The valuer then tells the bank the value of the property and sometimes we do advice the bank how much they can give as loans after doing the valuation. In Nigeria, things are being done upside down. A few years back, banks were no longer taking properties as collateral but they were taking shares and letters of credit and they burnt their fingers. We warned them then but they refused. Real assets are landed properties. It is what is real. That is why the English call it the real estate. Shares certificates are not real. That is why shares that were N40 became N2. This cannot happen to property. Prices of houses may come down but not by that margin. Banks need our services if they must give out loans. Again, valuation is needed when companies want to prepare their balance sheet. You need a valuer to value the physical assets of the company. What they do here is that when these companies do valuation, the accounts will start depreciating the value of the valuation every year. They say that property that is worth N10 million 10 years ago is now worth N5 million this year. This is not true because instead of depreciating, the thing is increasing. Companies need to call estate surveyors and valuers to revalue their property every four years.

Valuation is also good for rating purposes. These days, we see people who go to houses and give them certain bills to pay as tenement rate. This is not so. It is the estate surveyor and valuer that knows the value of a property and the councils need their service to determine what to be paid as tenement rate. The irony of that matter is that governments are not making use of the services of estate surveyors and valuers. Every local government should have an estate surveyor and valuer who will be carrying out valuation of properties in the local government area. Valuation is also compulsory when you want to insure your house.

Do you think the banking sector crisis could have been prevented if proper valuation had been done?

That is exactly what I am trying to tell you. I wrote an article on it that was published in Nigeria newspapers. We warned them that security for loan is real estate but they did not listen to us. Those managing directors who lost their jobs would not have been in that situation if they had listened to us. If the house that was used as collateral got burnt or collapses, the land is still there and that you could have insured it. So there is no way that banks could lose if they had accepted property as collateral. It is compulsory that you take insurance for the house you intend to use as collateral for loan.

Could this also explain why the courts demand landed properties when determining bail applications?

This has shown that landed property is real estate. A court cannot say you should go and bring shares certificate before you are given bail because they know that that shares certificate can vanish any day. I think the real reason court prefers landed property is that if is a fixed asset.

What are the implications of not having titles to landed property?

Yes, we have property that does not have title in Lagos. This is not good at all. When you have a property that does not have a title, it is like you own a car that does not have particulars. Many people in this country may not have vehicle particulars if policemen will not harass them for it. The certificate of occupancy (C-of-O) is the ‘particulars’ you needed for a house. That is the only evidence to show that you are the owner. Your living in the house does not show that you are the owner. We have always advised people to ensure that they have titles for their landed properties. The implications are many. If you don’t have titles to your land, you cannot use it as collateral for loan, you cannot use it as collateral for bail and you cannot even sell it and even transfer it legally to your children. Most times, I don’t blame the people who do not have titles for their properties. Getting a title for property in Nigeria entails so much work and money. In most developed countries, it is a tiny titled amount; for instance if you have to perfect title for a property that is worth N100 million in Lagos you have to pay N15 per cent, which is N15 million. This is too much. Many people may not be able to pay such money. If you want to enter title of a property that is worth N5 million and that of N100 million in the register, it is the same job. Government should simplify the process of getting titles to properties. There are other areas where they can make money. The concentration on property is too much.

What are the effects of quackery on your profession?

The effects of quackery on estate surveying and valuation are so much. They are giving the profession a bad name. What quack estate agents do is unthinkable. Recently, an estate agent duped some people several millions of naira on a house which he has authority to let. When you go to the office of a quack estate agency, they ask you to pay registration fee. Some of them live on the registration fees. To take you for inspection, they will ask you to pay. This is wrong. They even collect any amount as agency fees, especially on room and parlour. This negatively impacts our name and image. That is why we came out with a committee. I was the chairman of that committee. We came out with a report that in view of the number of people in this category and the power and the amount of money and power they have, we might not be able to get a law that will stop them. So we proposed a law that will accommodate them. We now have National Association of Estate Agents of Nigeria. We are going to register that company. We are doing that at Corporate Affairs Commission (CAC). My committee even initiated a bill that we will take to the National Assembly. When the bill is passed, we will be able to know who is an estate agent. What we are trying to do is to accommodate them, bring them to our fold, not as estate surveyors and valuers, but a way to regulate their activities. The association will be able to regulate their operation and if anyone dupes a client, the association will be able to identify the person and sanction him appropriately. We are taking this upon ourselves because it is affecting our image.