Business
Dubious real estate schemes, trapped assets, threaten $6bn yearly Diaspora investments
The systemic inefficiencies in the nation’s real estate industry, which fuels fraud and corruption, is currently threatening to halt the yearly $5.85billion diaspora investments in the housing sector, Business Hallmark can report.
Owing to these inefficiencies, many Nigerians abroad desirous of owning their own properties at home, investigations revealed, have lost billions of dollars worth of investments they unknowingly pumped funds into acquiring outrightly dubious or encumbered assets.
As a result, many intended home owners in the Diaspora are now weary of investing their hard-earned funds in lucrative, but high risk real estate businesses in Nigeria for fear of losing it.
According to available data, diaspora remittances into Nigeria in 2023 totaled $19.5 billion. Out of the inflow, $5.85billion, representing 30%, found its way into the real estate sector, which diaspora buyers used to access premium properties within the period.
However, many diaspora buyers have not been lucky with their investments, as many of the properties presently either encumbered in law suits and government acquisitions, or totally lost to fraudulent real estate firms, their agents and corrupt family members, who served as the links.
Several cases abound of Nigerians in the diaspora, who have lost their real estate investments, or about to lose it, mostly because of their own fault of not doing due diligence.
Especially pathetic is the plight of some Nigerians in the diaspora, who invested in housing schemes in Okun-Ajah, Lagos State, as their investments have been affected by the ongoing construction of the Lagos-Calabar coastal road by the Federal Government.
The investors, made up of Nigerians and foreign nationals, including Britons, Chinese, Americans and Canadians, BH learnt, had committed over $200 million in acquiring lands in an estate marketed to them by a real estate firm, WinHomes Property Development Company.
They subsequently went ahead to construct grand residential buildings and business offices in the estate, which are now under threat from the bulldozers of Hitech Construction Company, the contractor handling the handling the coastal highway.
Some of the investors, who stormed Nigeria in December 2024 to protest the planned demolition of their properties include six foreign nationals, two Americans, one Chinese, one Canadian and two Britons.
During a press conference they held a day after their arrival in Lagos, the affected homeowners called on President Bola Tinubu to intervene in the matter, claiming they were passing through financial, psychological and mental trauma over plans to demolish their properties, which they coughed out several billions of naira for.
While expressing regrets that they built homes and established businesses in Nigeria, the protesters said they were at first sceptical in accepting the call to invest in Nigeria, but capitulated when some Nigerians convinced them that all is well.
“When we were told that we were affected by the new diversion of the Lagos-Calabar coastal road in Okun-Ajah, we were not initially bothered because we had the necessary documents and when we examined the initial plans of the coastal road, we realized that it was not possible to divert the road to our investment.
“We thought it was a rumor because there was no reason whatsoever to leave the original plan and divert to our land.
“We did a thorough investigation and discovered that the land was genuine, with documents, including the governor’s consent. We had no reason to fear because the original plan of the road was done when Tinubu was the governor of the state and he is now the President. So, we have come from all parts of the country to meet with the Minister of Works, Senator Dave Umahi, and to let Nigerians know what we are passing through, and for our president to come to our rescue”, one of them told journalists at the press conference.
Also, a property owner whose house is marked for demolition, Kimberly Stark, expressed concerns that her investments might go down the drain if urgent steps were not taken to address the matter.
The African-American medical practitioner said she decided to take the next available flight to Nigeria after reading news of the destruction of structures on her parcels of land, which she bought through Winhomes Global Services Estate in the media.
“This is my 18th time in Nigeria. When I got the information of Winhomes Global Services investment scheme and the coastal road that would come in the future, I was very excited and decided to invest in Nigeria and make it my second home.
“To my amazement, we heard of all that has been happening and how our estate investment has been demolished because of the diversion of the coastal road from its original gazetted plan.
“I have reasons to suspect that some key people working with the minister of works are giving him improper information. It is not a good image for the country as a whole. We appeal to the President to intervene because the situation is tearing me up.
“How would I invest in my country and convince my friends to invest and after investment we are left in penury? This is my country”, Kimberly Stark cried.
Also speaking, a Nigerian professor of medicine based in Canada, Arinze Onumelu, said the diversion will discouraged Nigerians in the diaspora from coming home to invest
“I have been abroad for 23 years. I have come to a stage in my life where I want to be home. A lot of us want to come home and invest here.
“Nigeria is my home. I don’t have any other home in the world. But Nigeria has to be ready for diaspora Nigerians’ homecoming and this is the time to prove it”, he admonished.
BH, however, gathered that the affected property owners are partly responsible for their own misfortune. According to sources in the Lagos State Bureau of Lands, if the homeowners had done due diligence, they would have found out that there is a diversion plan from the original 2006 design.
“How can they argue that the planned diversion is contrary to the original 2006 plan when they have not gone back to check the current status of the project?
“2006 was a long time ago, a year short of 20 years. And they are basing their judgment on that old document? Are they serious at all?
“While they are correct that the original 2006 plan did not pass through Okun-Ajah, they were wrong to say the plan had not changed.
“Initially, the road supposed to pass through the now developed Admiralty Road on the sea front. But when the government realized the volume of destruction that will take place in the axis if it insisted on going ahead with the original plan, the road was rerouted to pass through undeveloped swampy wastelands, which Okun-Ajah falls into.
“In fact, alteration to the original plan was made as far back as 2015, long before the Winhomes Estate in Okun-Ajah site was conceived and reclaimed.
“A professional estate firm worth its salt would have discovered the red flags and would have warned the investors to run, though at a fee, which would have been minimal, compared to what they are going to lose at the end of the day”, the source stated.
A Nigerian couple based in the United States also lost N280 million to a fake developer, who worked hand-in-hand with a security guard to sell a house in Igbo-Efon, Lekki in Lagos.
According to the couple, their travail began sometime in March 2024, when they stumbled upon a 4-bedroom duplex listed on Instagram by a developer.
Unknown to the victims, the fraudster used their vulnerabilities to lure them into the trap.
“He used flashy marketing to showcase the luxury apartment for sale. The photos were perfect, the location prime, and the price competitive. Unknown to us, the developer was a fake real estate developer.
“We reached out to him through a cousin based in Nigeria and the fake developer arranged an inspection visit through the building’s security guard.
“To gain credibility, he enlisted and bribed the security guard to let our cousin allow him conduct inspections, have unrestricted access to the house and pose as the real owner when the real homeowners were away. We even watched the inspections through video calls.
“The guard’s involvement made the deal seem legitimate, convincing us to trust the developer and vouch for his ownership.
“The developer also presented perfectly forged documents, including a Governor’s Consent, Survey plan.and Receipt—all bearing his name.
“Within three days, the deal was concluded. We paid the required N280million fee and the property’s keys were handed to us with the instruction to allow three days for his lawyers to prepare the deed of assignment.
“When we returned to the facility on the third day as instructed to collect the signed deed of assignment, we found the real developer on site marketing it to prospective buyers.
“He was completely unaware of the transaction that took place behind him and was shocked by our claims of purchase.
“Since then, we have not set eyes on the fake developer, who we leant had fled the country.
“However, the security guard was apprehended in Gombe State by the police after being tracked. He confessed that he was paid the sum of N2 million by the scammer for his roles in the scam.
Several months after, the couple had not been able to recover their funds despite valiant efforts on their part.
A property expert, Surveyor Segun Ilori, blamed many victims, whose acquisitions are encumbered for not doing due diligence.
“Due diligence is non-negotiable when buying property in Nigeria, especially Lagos. These tragic incidents highlight the dangers of skipping due diligence. Buyers should never rely on verbal assurances or appearances. They should always verify property titles before making payments. That a transaction ‘looks real’ is not always enough”, Ilori warned.
Meanwhile, buyers unfortunate tales while transacting real estate deals in Nigeria have spooked many would-be investors, with many diaspora Nigerians saying they now plan to move their funds to less risky ventures.
“I had initially planned to buy a house in Nigeria, but after hearing takes of woes from affected colleagues, am putting the plan on hold until I am able to get a good and honest property lawyer that I can contract it to.
“For now, I am pushing saved funds into buying government bonds and securities,” said the diasporan, who did not want his identity disclosed.