Members of the House of Representatives are expected to commence debate on the general principles of a bill that seeks to ensure that real estate business conforms with the Money Laundering Prohibition Act, 2011 (as amended) and Nigeria Financial Intelligence Unit (NFIU) Act, 2018 as well as ensure compliance with counter-terrorism financing due diligence.
The proposed bill provides for the establishment of the Real Estate Regulatory Council of Nigeria which shall be a self-funding organisation, is to provide efficient, effective and transparent administration of the business of real estate development, and prescribe minimum standards for the conduct of the business of real estate development in Nigeria and for related matters, 2021.
The bill was passed by the Senate on Wednesday, November 17, 2021, and transmitted to the House for concurrence.
The objectives of this Bill are to: standardize the business of real estate development in Nigeria by regulating the conduct of transactions in the real estate sector; provide enabling environment and transparency in the business of real estate development in Nigeria; make the business of real estate development in Nigeria conform to international best practices and safeguard the ultimate interest of all stakeholders in the business and curb fraudulent practices in the business of real estate development in Nigeria.
The bill also seeks to ensure the real estate business conform with the National Building Code in Nigeria; create an innovative and sustainable environment to promote Nigeria as a real estate investment destination in Africa and the world.
Clause 4 of the bill, provides that the Council shall regulate the business of real estate development in Nigeria in consultation with the Real Estate Development Association of Nigeria (REDAN); promote sustainable development of the business of real estate as championed by REDAN; provide and promote strategic collaborations with investors in the business of real estate development to provide suitable housing programmes; collaborate with relevant government and private institutions to bridge housing deficit in Nigeria and protect the interest and funds of investors and other stakeholders in the business of real estate development in Nigeria.
The Council is also saddled with the responsibility of registering and licensing all real estate developers in Nigeria through the institutional guidelines of REDAN; renew the license of real estate developers annually, upon payment of the prescribed fees and fulfillment of all requirements prescribed under this Bill as recommended by REDAN; register, maintain and update register of all real estate development projects ratified by REDAN to have met set standards of industry practices; monitor and inspect the progress of registered real estate development projects to ensure compliance with this Bill and other relevant legislation in the business of real estate development in Nigeria; work through REDAN to monitor, investigate and sanction registered and licensed real estate developers that violate the provisions of this Bill; work through REDAN to investigate and penalize unlicensed real estate developers that violate the provisions of this Bill; receive complaints and petitions against real estate developers from aggrieved clients or members of the public and investigate complaints and petitions under paragraph (I) and take necessary action as prescribed under this Bill.
The Council is also expected to make standard operating procedures and codes of conduct for the business of real estate development in Nigeria; impose penalty or interest with regard to contravention of obligations upon developers and allottees; as well as issue guidelines and regulate its own procedure.
PART VI, Clause 30 of the bill also provides that: “A developer shall not accept a sum more than 5% of the cost of the apartment, plot, or building, as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale/lease with the person.”
Clause 38 of the bill also stipulates that: “If a developer commits, a financial crime in relation to the Council under this Bill, the developer shall be liable on conviction to the penalties prescribed under the Act of the National Assembly or law regulating financial crimes in Nigeria.
“If an investor commits a financial crime in relation to the duties of an investor under this Bill, the investor shall be liable to the penalties prescribed under the Act of the National Assembly or law regulating financial crimes in Nigeria.
“A developer who knowingly gives false information to the Council commits an offence and is liable on conviction to a fine of N50 million and shall be heard in a Fast-Track Court.
“A developer who willfully fails to comply with any order or direction of the Council under this Bill may have his license revoked temporarily or permanently as the Council determines.
“An allottee that willfully fails to comply with any order, decision, or direction of the Council shall be liable to a fine as may be determined by the Council. A developer who deals in the business of real estate development in Nigeria that: fails to register and be licensed in accordance with the provisions of this Bill commits an offence and is liable on conviction to a fine of not less than N20 million to be garnisheed from the Developer’s Bank Account(s) by application to the High Court.”
Source : Nigerian Tribune