Property development is an enormous task with multi-faceted bottlenecks that the government at all levels has over the years cleverly shied away from, even with the national housing deficit estimated at over 17m units. The manner of housing delivery has changed since then as it is now being driven mostly by private developers. But the private developer has a lot of issues to cope with, such as problems of site acquisition, title perfection, approval of building plan, sourcing of finance, construction, subleasing and management.
Acquiring land for development is not only expensive but difficult because it is often overshadowed with many legal issues. Similarly, the machinery put in place by the government has never been efficient enough to expedite the processing of title and building approval, which causes costly delays in development. Financial institutions in Nigeria do not give long-term funding, the interest rates are excessively high and the repayment conditions are too harsh, which put the developer under severe pressure. Developers are also faced with a choice problem of what to develop, whether to sell it outright or to lease it out and what management structure to put in place for the completed development. Now there are some groups of people in residents’ associations that want to rob developers of their hard-earned reward by ambushing the management process aspect.
Housing estates have certainly come to stay. They are some of the most desired places on earth. If many had a choice, they would elect to live in a beautiful estate. Estates are endowed with several attributes that make a lot of people choose to live in them to pursue and achieve their dreams. For one, they are a perfect sanctuary tucked away from the hustle and bustle of city centres and the red-light districts of the world. They are gated communities where security is assured for both lives and property. The facilities often lacking elsewhere are amply provided in estates and they work 24/7. It is therefore understandable why residential estates have sprawled not just in Lagos but all over the country in recent times.
Once an estate is completed, the developer puts a management structure in place to maintain that estate and its facilities in line with the vision of the developer. If it is the developer’s first project, it becomes a reference point for future ones. Unfortunately, it costs a lot of money to manage and maintain an estate and its facilities over its lifespan, which is a reflection of the ever-increasing cost of living, inflation and the naira devaluation, among other factors.
Here lies a major problem that is now posing great threat to developers. Away from the fears of government acquisition of their lands and not making commensurate profits on their planned development, what appears to be a real threat to real estate development initiative in recent times is the fear of losing out control to the association of homeowners in the established estates. The pride of every rational property developer is to provide an efficient structure for the management of their developed estates. This way, they can control how the estates are managed. A badly managed estate is one that will not fulfil the ultimate objectives of its owner; it is one where the facilities put in place go to decay soon after the project is commissioned. A badly managed estate is bound to a short-lived existence. No matter the intimidating array of facilities put in place, it heads for waste soon after commissioning and does not match the vision of the owners.
The trend gaining ground (sometimes with intense jostling and electioneering contest), especially in Lagos, is the practice whereby the homeowners of completed estates form an association run with an executive team put in place that spearheads the agenda of its members. The residents are quickly led to accept the make-belief that the developer is exploiting them and they want to take over control of every aspect of the management of the estate. They want to be in charge of exacting and collecting levies in the estate. They want to administer the service charge account themselves. They want to recruit the management/maintenance team themselves. They want to be in charge of collecting and administering the electricity bills themselves. Where there is a single estate electricity meter, they want to own their direct meters and deal directly with the electricity distribution company. Collectively they want to disintegrate the machinery put in place to manage the estate and assume control of such estates for selfish motives.
Instructively, most subscribers buying into new estates often sign and enter into agreement with the development company on a number of issues. Clauses are enshrined into such agreement that compel the subscriber to be of good conduct in the estate, at the same time protecting the interests of the developer. They are compelled to abide by the operation of byelaws that govern the estates. But residents hardly comply with these agreements to the letter.
Soon after, the association of homeowners now fully entrenched in the estate wants to have none of the same agreement they signed individually with the developer. Gradually, some agitations begin to fester among resident members who are confused into the orchestrated belief that once the association assumes control of the affairs of the estate, the levies would come down and that there would be accountability and transparency for monies collected. The stock-in-trade is to accuse the developer and the estate manager of extorting them. The legality of persons of the same status demanding payment from a fellow resident or homeowner in an estate is a very thorny issue as it has caused many altercations in many estates.
In many estates in Lagos today, the management team has either been sacked by the residents’ association or is under intense pressure to relinquish control of the estate they built. Several estates located on the Lagos-Ibadan Expressway have either suffered or are suffering the same fate of the developers increasingly being ousted by the residents’ associations. The trend is not confined to private estates alone. The public estates – residential or commercial – built by the government have always had varied syndromes of occupiers wanting to eat the national or state cake as the case may be.
Unfortunately, usurper residents’ associations that have taken over management of these have hardly fared better than the developers they ousted. This is because they are not property professionals trained in the art of property management. Most of them are at best businessmen and women with sinister motives to take over control of such estates and keep something for themselves. Why would they be fighting among themselves soon after over the same estate if not for selfish interests? Besides, they do not have the luxury of time to be fully committed to the affairs of the estate. More importantly, they find it difficult to enforce payment of levies and other charges because their colleagues would not always agree with them since they lack any superior legal rights.
For many developers for whom property development offers an instant business model and branding is their best strategy to approach, the frustration is high-pitched as the residents want to deviate their estates from the vision. Feelers in the industry in Lagos are that the developers have now decided to fight back. They have approached and had meetings with Governor Akinwunmi Ambode to douse the burning issues as property business is the biggest business in Lagos and the major income earner to the government.
Samuel Ukpong
