ETHICAL ISSUES AND CHALLENGES OF ESTATE AGENCY IN NIGERIA.



INTRODUCTION

Real Estate Agency in Nigeria has largely been regarded as a fast money-making domain for every person that decides to do business in the industry. The practice until recently remain very loose, largely unregulated and without serious professional qualification or expertise to get involved. Estate Agency in the conventional form is not only practiced by those trained in property business but also welcome interest from other backgrounds including those with little or no formal training.

REAL ESTATE AGENCY

Oxford Dictionary described Estate Agents as “persons who act as agents for selling or letting of lands and houses, aided by advertisement and other means to find a corporate body, or someone who is willing to buy or rent parcels of lands or houses”. It described an estate agent as one who is appointed or instructed by person (client) to buy, sell or lease a real estate property to a third party for a fee or commission. Agency therefore is the relationship that exists between matters concerning the subject property (Olayonka, 2017)

Agents perform different duties, depending on whether they work for the buyer or the seller. Agents who work for the seller advise clients on how to price the house and prepare it for sale, including providing tips on last-minute improvements that can boost the price or encourage a speedy sale. Seller agents market the property through listing services, networking and advertisements. Agents who work for the buyer search for available properties that match the buyer’s price range and wish list. These agents often look at past data to help prospective buyers determine a fair offer for a particular property.

According to Araloyin and Olatoye (2011) the real estate agency market in Nigeria is being regulated by the Nigeria Institutions of estate Surveyors and Valuers (NIESV) (2002) under the supervision of Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON) Act No. 24 of 1975. By virtue of the act, estate surveyors are statutorily empowered to act as estate agents in the sale, purchase or in the leasing of property or any interest therein. However, the real estate agency market in Nigeria has recently seen other professionals and even people without formal training in any related discipline expanding their core business and starting to offer real estate related services.

In Nigeria, the Corporate Affairs Commission (CAC), a body statutorily empowered to register every business outfit in the country, defines estate agency as a business concern and classifies it under general business practice. This partly accounts for the influx of people into the practice.

However, Nigeria Institution of Estate Surveyors and Valuers have taken steps to organize and co-ordinate the practice within the ambit of the profession. This has led to the various provision aimed at regulating the practice as contained in the code and ethics of professional practice. Despite these provisions, real estate agency practice has been marred by diverse unethical practices found among both professionals and other practitioners.

ETHICAL ISSUES AND CHALLENGES

Despite several attempts by the Nigeria Institution of Estate Surveyors and Valuers to refine and reorganize real estate agency in Nigeria, erstwhile and currently practitioners are of the opinion that real estate agency practice, still remains largely unorganized, and suffering from persistent poor public perception. The initial lack of a central professional or regulatory body that could set minimum standards for entry, practice, as well as ensure adherence to a code of ethics has led to most estate agents being generally on their own and quackery with its attendant consequences prevalent. As a result, estate agency is fraught with lot of ethical issues and challenges and this has greatly mitigated the practice (Eleh, 2015).- Kuye noted that estate agency is faced with enormous problems which serve as a barrier against its practice and the professional proficiency of its practitioners. Some of these problems are highlighted thus;

  1. Activities of Artisans are unregulated in the industry.
  2. The public view practitioners of real estate business as people that are out to exploit the public through their exorbitant charges (Agency Fees). The public prefers transacting business at cheaper rates but such people end up in the hands of fraudsters.
  3. Some real estate agents indulge in misconducts and professionals negligence such as;
  4. Use of vague figures based on mere imaginations as values for real estate in cases of sales transactions.
  5. Under/over valuation of property by Estate Surveyors and valuers, yielding to clients influence in Mortgage and other types of valuations.
  6. Corruption and use of client’s monies for personal reasons rather than operating a separate Client Account.
  7. Most Real Estate Agents are not trained in the art of Estate Agency. Hence most real estate agents indulge in negative activities such as fraud and other negative influences thereby giving the real estate Agency Practitioners bad image.
  8. Seek unfair advantage over fellow Real Estate Agents and disparaging the business practice of same. It is greed or sheer misfortune (Makanjuola, 2005).
  9. Pasting multiple signs for sale on the same property by more than one Agency Firm.
  10. Accepting unapproved fees/charges so as to attract clients.
  11. Real Estate Agents are supposed to promote and promote and protect the interests of their clients, but they sometimes exploit the public trust by taking advantage of people’s fears, or their ignorance of the real estate business. An agent can mislead the owner of a property on the actual price of same in the open market by presenting a value below what is obtainable in the open market with the sole aim of convincing the owner of the property to give him the mandate to sell the property at that lowest value and anything the agent is able to sell above the agreed figure, goes to the agent as his commission.
  12. Despite carefully crafted codes of ethics, well-designed training and continuing education programmes, some agents still knowingly take advantage of the public, business partners, or even their own families, to advance their immediate financial interests. Ethical problems arise when people with professional duties do not accept the attendant responsibilities. Majority of the practitioners insinuate their perceptions which indoctrinate their behavior. These include “eat or be eaten”, and “we resolve to eat”, “everybody does it”, “we are told, and we fear that we will not” “fit in” “if we do not follow suit”. Estate Surveyors and other professionals must be forever on their mental toes, and must show unusual character, to resist this ubiquitous social pressure.
  13. Many offenses go unreported. The public is not aware of any Agents Code of Ethics, or of how to report violations. Even many Agents may not know whether specific behavior is an ethical violation, or how the reporting process works, and testifying cost a lot of money in Nigeria. Arbitration panel sitting on hearings may rationalize. The accused may be a friend, and a colleague; “why should I hurt her/him?’ Or think of the other side of the coin: “he skinned me once, and now I can get even”. Penalties often are not sufficiently severe. The typical finding of guilt in an ethic hearing results in only a reprimand. Even when a financial penalty is levied by the ethics panel and affirmed by the Board’s Officials, the offender typically can view it as a cost of doing business expediently. It is not unusual for the money earned through a questionable action to exceed the penalty paid. It is difficult to curtail unethical behavior while it is profitable. These sharp practices have given Real Estate Agents a serious dent in the name and indeed profession in Nigeria, this in turn affects the Practice of Real Estate Profession in the country.

Oni (2009) noted other common forms of unethical behaviors and practices as follows;

  1. Display of prejudice
  2. Lack of proper accountability for client’s money
  3. Lack of integrity
  4. Collection of professional fee from both parties and even from third parties.
  5. Placing two or more boards of estate firms on a property
  6. Misleading client with description of property
  7. Conflict of interest
  8. Incompetent representation
  9. Fee-splitting arrangement issues
  10. Disclosure of confidential information
  11. Improper solicitation and advertising adequacy of training on skill acquisition for effective and wholesome practice

CONCLUSION

It is sad that many Real Estate Agents proclaim their “professionalism” without the least realization that they must develop the habit of placing client’s interests ahead of their own before they can be professional in any meaningful sense of the word. It is advisable for the public to transact business with registered Real Estate Surveying and valuation firms and also registered Real Estate Surveyors  so as to avoid fraud and also to be able to address complaints where there are problems. When the real estate is fully repositioned, we expect to see Estate Surveyors and Valuers and Estate Agents that will acct with integrity and transparent. Those that would be accountable, act within their limitations. Be objective at all times. Always treat others with respect. Set a good standard and have the courage to make a stand. RICS (2000a) states that “Following this set of values is one of the key features that define the professionalism of all chartered and technical surveyors. You must base all your actions and judgments on these core values: When all stake holders in the real estate industry play their roles effectively, the attainment of vision 2020 objectives will be a success.

       A PAPER  PRESENTED TO JIDE TAIWO & CO.

                         By  Aminu A. Tajudeen, ANIVS, RSV.

                                    The Branch Manager, Jos.

                                        O7052090348.

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