No more Nigerians helpless as developers fail to deliver homes after payment


Yusuph Olaniyonu moved to Abuja in 2015 after his appointment as Special Advisor on Media and Advertising to then Senate Speaker Bukola Saraki.

When he arrived, he realized that the cost of renting an apartment in a location that gave him easy access to his office was far too high for him. After considering his options, he chose to buy a house from Hortigraph Nigeria Limited, a property development company in Abuja.

Mr Olaniyonu said he quickly sold a property located in Isheri in Lagos to raise funds. Between June 15, 2016 and January 12, 2017, he paid N 27,390,000 for a three-bedroom terrace duplex and a BQ apartment in the Hortigraph housing estate in the Karmo district of Abuja.

It made the payment to the promoters’ bank account with Aso Savings and Loans Plc in four installments, according to documents seen by this newspaper.

The document showed that the project is being jointly developed by Hortigraph Nigeria Ltd and Hallmark Synergy Integrated Services Ltd., along with Aso Savings and Loans Plc. as project funders.

Mr Olaniyonu said he was told he would get the keys to his house within six months of completing the payment. However, almost five years after the payment, this has not happened.

“I feel disappointed and helpless, struggling with vague promises here and there, as I continue to pay 1.1 million naira in annual rent for a small space that cannot contain my family,” he said. he declares.

Underperforming sector

According to a report By PriceWaterhouseCooper (PwC), Nigeria’s real estate sector has been struggling for decades, contributing on average less than 7% to GDP and less than 1% to employment.

He said the sector is the most important in countries like the United States and Australia in terms of contribution to GDP and also provides the most jobs in Australia.

Law 3 of 1992 which created the National Housing Fund (NHF) was intended to mobilize funds that will facilitate the provision of affordable housing to Nigerians.

Under current NHF law, every Nigerian earning 3,000 naira or more per year is required to pay 2.5 percent of his monthly base salary to the NHF. The funds raised will be made available to contributors at affordable interest rates for housing construction.

But Nigeria’s housing problem appears to be getting worse.

The Pwc report cited the Nigeria Bureau of Statistics as saying that Nigeria had a deficit of 17 million houses in August 2012 and needs 700,000 houses per year, compared to less than 100,000 currently under construction.

Ironically, he said the cost of building a house in Nigeria is relatively higher while the average income level is relatively lower than the world average.

“This means that even when there is a supply of housing, the price, whether it is a self-built purchase or an off-the-shelf purchase, is beyond the reach of the majority of Nigerian workers, making affordable housing a dream, ”the report says.

Bottlenecks

Mr Olaniyonu said his experience was the result of the housing sector not being regulated.

“It’s a sector that is not regulated, a sector that involves so much money. People are putting their savings in and the government doesn’t want to regulate it, ”he told PREMIUM TIMES.

He said the developers behave the way they want and cheat on people without fear of punishment. He said most of the billboards and banners in strategic positions on Abuja’s main roads announcing one housing project or the other are misleading.

“They only use it to fool people,” he said, urging the National Assembly to look into the events in the area.

When contacted, Hortigraph’s secretary, Nuruddeen Abubakar, said they had stopped work on the estate due to problems they were having with the project’s financiers, Aso Savings.

Mr Abubakar said that subscribers who paid for buildings in their domain around 2016 did so because they were in awe of what they saw in phases one and two of the domain. “They saw what was on the ground and grabbed it,” he said.

He said the company started phases three and four of the domain in 2017, after a lot of work was done on the previous phases. “We’re almost done. Actually, some parts have been covered.

He said their problem with Aso Savings started when they started noticing irregular deductions from their account with financiers.

“We started to see charges here and there, restructurings and a certain amount of money was withdrawn from our account,” he said.

Mr Abubakar said they did not get any reasonable explanation for the deductions. “So we contacted subscribers that we could contact and asked them to stop paying to our account with Aso Savings due to these irregularities,” Mr. Abubakar said.

He said they took Aso Savings to court, but decided to settle the case out of court last month. Mr Abubakar said the company has returned to the site and expects to complete the buildings within the next 12 months.

In his reactions, however, Aso Savings blamed the developers for a myriad of issues, including a shoddy project, failure to meet the project manager’s recommendation, and the developer’s outstanding obligations to financiers.

Aso Savings social affairs director Tope Onamada said some of the underwriters from the completed first phase complained to the bank about the quality of work on the units handed over to them.

Ms Onamada admitted that Hortigraph had also accused him of illegal charges on her account and reported it to CBN in 2019 about the charges.

READ ALSO : SPECIAL REPORT: Years after paying developers millions, Abuja residents find themselves homeless

“A meeting was scheduled between the promoter and the bank at the CBN. Subsequently, CBN suggested that the two parties meet and resolve their differences when ASO presents its position, ”she said.

Ms Onamade said Hortigraph subsequently filed a lawsuit against Aso Savings on the same issue, while both sides were still looking for a solution, only for the developer to withdraw the complaint without notice.

“The developer also submitted the file to arbitration, which had several sessions. During the arbitration, Hortigraph withdrew from the meeting without giving ASO a reason for his withdrawal, ”she said.

She said the CEOs of both sides held a series of virtual meetings but could not come to an agreement as Aso Savings considered the developer’s position unacceptable as it was at odds with the proposals. that they had put forward for the project.

PREMIUM TIMES found that the developers and the bank have not settled their differences and cannot say when the buildings will be delivered to subscribers.

No more wailing

Hortigraph is not the only developer unable to meet the expectations of its customers.

In 2017, Hall 7 Real Estate Limited, a real estate development company in Abuja, presented plans to develop land at Aso Gardens Estate as part of its “Step One” project. Abdulrazaq Umar, an official, was among those who embraced the plans.

He was told to pay 30% of the cost, while the developer would take out a Federal Mortgage Bank (FMB) loan through the Federal Housing Authority (FHA) to cover the remaining 70%.

Mr Umar said that after making the initial deposit, they set up a repayment plan for the FMB loan and he is expected to pay his 30% contribution within a year.

He said he raised 1.9 million naira to pay the contribution within the stipulated deadline. But later he received a letter from the developers advising him to switch from FHA Homes to AG Homes Mortgage Bank because they believed the FHA loan would not arrive on time.

In 2018, they got him to sign a letter to FMB asking him to change his main mortgage bank to AG Homes.

In April 2019, Mr. Umar said that BKW had granted his request for the 11 million naira loan. But AG Homes didn’t inform him that the money had arrived until August 2019, when they needed a letter from him to give them permission to release the money to the developers, Step One.

He said the developers encouraged him to sign the release letter, telling him he would get his house within six months of handing over the money.

“I signed the letter and the money was transferred to the first step. This means that 100% of the amount of the investment has been paid since August 2019, ”he told PREMIUM TIMES over the phone.

However, he said the deal they reached in 2017 was that his house would be delivered 45 days after the mortgage bank payments were confirmed.

“Since the money got to them 45 days have passed, they haven’t even started cleaning up the site or mounting the blocks,” he said.

When asked for explanations from the developers, Mr Umar said he was told they would either return to work or reassign him to a four-bedroom penthouse if he could add more money to the what he had paid for. He said he accepted the offer, but was later told it was no longer feasible.

“Later they reached out to say that it was no longer possible and I just had to wait for them to complete the first three rooms for me,” he said.

Another subscriber who doesn’t want his name mentioned had a different headache. Although Step One delivered their house after a lot of back and forth, he said the building was substandard.

“As we speak, I have spent over 10 million naira to fix some things in the house that has been delivered. The wiring was poor, poor quality wires were used, I had to change everything and other things in the house, ”he said.

He recalled that the developers were chasing him to grab their plans at the start of the project, but after completing the payment, he became the one behind them.

Calls and emails to the official Hall 7 contact addresses went unanswered.

Major constraints

PREMIUM TIME reported how some large real estate development companies have left their followers stranded for many years after raising millions.

Many subscribers who shared their experiences with this reporter wondered why a trillion naira industry is unregulated and buyers are at the mercy of real estate developers.

Some we spoke to didn’t want their names mentioned because they said the developers threatened to refund their money if they reported them to anyone after waiting more than three years without a home.

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