{"id":230,"date":"2014-03-26T13:00:13","date_gmt":"2014-03-26T12:00:13","guid":{"rendered":"https:\/\/blog.iese.edu\/africa\/?p=230"},"modified":"2016-10-28T15:37:52","modified_gmt":"2016-10-28T14:37:52","slug":"the-ins-and-outs-of-real-estate","status":"publish","type":"post","link":"https:\/\/blog.iese.edu\/africa\/2014\/03\/26\/the-ins-and-outs-of-real-estate\/","title":{"rendered":"The ins-and-outs of real estate"},"content":{"rendered":"<p>Look at the picture below carefully and read the sign there. You&#8217;ll see one of the <b>ins-and-outs of real estate in Nigeria<\/b> \u2013 and I suspect that similar ones may appear in the rest of Africa:<\/p>\n<figure id=\"attachment_244\" aria-describedby=\"caption-attachment-244\" style=\"width: 726px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/blog.iese.edu\/africa\/files\/2014\/03\/real-estate1.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-244\" alt=\"real-estate\" src=\"https:\/\/blog.iese.edu\/africa\/files\/2014\/03\/real-estate1.jpg\" width=\"726\" height=\"354\" srcset=\"https:\/\/blog.iese.edu\/africa\/files\/2014\/03\/real-estate1.jpg 726w, https:\/\/blog.iese.edu\/africa\/files\/2014\/03\/real-estate1-300x146.jpg 300w, https:\/\/blog.iese.edu\/africa\/files\/2014\/03\/real-estate1-624x304.jpg 624w\" sizes=\"auto, (max-width: 726px) 100vw, 726px\" \/><\/a><figcaption id=\"caption-attachment-244\" class=\"wp-caption-text\">An usual announcement in Lagos<\/figcaption><\/figure>\n<p>Yes, you got it right!: <b>&#8220;This property is NOT for sale.&#8221;<\/b> Unusual, isn&#8217;t it? Not so here, where you can see similar signs here and there. <b>Real estate is one of the sectors to watch in Nigeria:<\/b><a class=\"inline-twitter-link inline-tweet-click\" href=\"#\" onclick=\"inline_tweet_sharer_open_win('https:\\\/\\\/twitter.com\\\/intent\\\/tweet?url=https%3A%2F%2Fblog.iese.edu%2Fafrica%2Fwp-json%2Fwp%2Fv2%2Fposts%2F230%2F&text=Only+in+Lagos%2C+the+housing+deficit+is+of+about+3+M+units%2C+with+a+forecast+of+land+scarcity+in+20+years.+');\" title=\"Tweet This!\">only in Lagos, the housing deficit is of about 3 M units, with a forecast of land scarcity in 20 years. <span class=\"non-dashicons\"> <\/span><\/a>\u00a0An attractive industry, but one that requires a lot of <b>local knowledge<\/b> to succeed in it.<\/p>\n<p><a href=\"http:\/\/www.aspenactionforum.org\/users\/tundereis\" target=\"_blank\">General &#8216;Tunde Reis<\/a> \u2013 a successful entrepreneur in the industry, and founder of <a title=\"First World Communities Ltd\" href=\"http:\/\/www.firstworld-communities.com\/\" target=\"_blank\">First World Communities Ltd<\/a>\u00a0\u2013 shared with me some of those <b>ins-and-outs<\/b>:<\/p>\n<ul>\n<li><b>Some land is owned by the government<\/b>: They acquired it (i.e., expropriated it) from the so called &#8220;customary land owners.&#8221;\u00a0 The tricky issue is that many times these families still occupy it, and claim that the land is theirs. The end result is that it&#8217;s common business practice that <b>you pay twice: both to the government, and to the occupiers.<\/b><\/li>\n<li><b>Other land is in private hands (the &#8220;customary land owners&#8221;):<\/b> Serious real estate developers like <a title=\"First World Communities Ltd\" href=\"http:\/\/www.firstworld-communities.com\/\" target=\"_blank\">First World Communities Ltd<\/a> do not buy from them. Because there is no central ownership registration system, <b>you can&#8217;t be sure who the land belongs to<\/b> and different people may claim ownership.<\/li>\n<li><b>The social conception is that a house belongs to the family:<\/b> When someone buys a house, the extended family members contribute to it (this speaks to the <a href=\"https:\/\/blog.iese.edu\/africa\/2014\/02\/26\/africans-communal-mentality\/\"><b>Africans&#8217; communal mentality<\/b><\/a> I referred to in a previous post). The implication is that if you know how to manage this, you can <b>design your financing options in such a way that you can sell houses to people who would not qualify for a mortgage.<\/b><\/li>\n<\/ul>\n<p>If you combine the lack of information about property titles with the sense of &#8220;shared property&#8221; that derives from the extended family contributions to finance the acquisition of a house, the end result is the picture above. It just happens that<b> people may be selling a house or a land property they do not own;<\/b> they may either be falsifying the ownership titles, or they may just be convinced that the property is theirs. It&#8217;s not uncommon that two family members are trying to sell a house to different people without letting each other know. And the house may be shown to a potential buyer in the absence of the inhabitants. Thus, you need to make it public if <b>&#8220;this property is NOT for sale.&#8221;<\/b><\/p>\n<figure id=\"attachment_235\" aria-describedby=\"caption-attachment-235\" style=\"width: 214px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/blog.iese.edu\/africa\/files\/2014\/03\/Cooperative-Villas.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-235     \" alt=\"Cooperative Villas, one of FWC developments\" src=\"https:\/\/blog.iese.edu\/africa\/files\/2014\/03\/Cooperative-Villas.jpg\" width=\"214\" height=\"161\" srcset=\"https:\/\/blog.iese.edu\/africa\/files\/2014\/03\/Cooperative-Villas.jpg 506w, https:\/\/blog.iese.edu\/africa\/files\/2014\/03\/Cooperative-Villas-300x225.jpg 300w\" sizes=\"auto, (max-width: 214px) 100vw, 214px\" \/><\/a><figcaption id=\"caption-attachment-235\" class=\"wp-caption-text\">Cooperative Villas, one of First World Communities&#8217; developments<\/figcaption><\/figure>\n<p>To the contrary, <b>ownership of\u00a0 government land is properly registered<\/b>, including who the legal &#8220;customary land owners&#8221; are. Guaranteeing that only this land is acquired grants a company like <a title=\"First World Communities Ltd\" href=\"http:\/\/www.firstworld-communities.com\/\" target=\"_blank\"><b>First World Communities\u00a0Ltd<\/b><\/a><b> a reputation for reliability<\/b> &#8212; something particularly important in this industry, as you probably have figured out. (And by the way, <a href=\"http:\/\/www.firstworld-communities.com\/\">First World Communities\u00a0Ltd<\/a> is one of those companies that plans to become Pan-African in the medium term.)<\/p>\n<p>Have you seen a system similar to this one anywhere else?<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Look at the picture below carefully and read the sign there. You&#8217;ll see one of the ins-and-outs of real estate in Nigeria \u2013 and I suspect that similar ones may appear in the rest of Africa: Yes, you got it right!: &#8220;This property is NOT for sale.&#8221; Unusual, isn&#8217;t it? Not so here, where you [&hellip;]<\/p>\n","protected":false},"author":1654,"featured_media":245,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[99106],"tags":[79903,157,1080,100509,1178,100510],"class_list":["post-230","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-future-and-perspectives-for-africa","tag-communal-mentality","tag-entrepreneurship","tag-nigeria","tag-property","tag-real-estate","tag-shared-property","megacategoria-mc-africa"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/posts\/230","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/users\/1654"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/comments?post=230"}],"version-history":[{"count":14,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/posts\/230\/revisions"}],"predecessor-version":[{"id":248,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/posts\/230\/revisions\/248"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/media\/245"}],"wp:attachment":[{"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/media?parent=230"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/categories?post=230"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/tags?post=230"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}