SOLD BY: ABSTRACT
Nigeria Institution of Estate Surveyors and Valuers has been in existence for some decades. It comprises of professionals who have obtained degrees in universities and other higher institutions offering the course that qualifies one to be in such caliber i.e Estate Management. On the other hand, Estate Surveyors and Valuers Registration Board on Nigeria is a body that constitutes members of the Institution who have been appointed to oversee the formulation of rules and regulation of the Institution, register elected members, and so on. This work examine the challenges facing the Institution and the Board through the use of research in determining the confrontations the Institution and the Board has, what causes those challenges and how severe are the challenges to the Institution and Board. Likewise, recommendations were made to the Board and Institution on how to overcome the challenges.
INTRODUCTION
The Nigerian Institution of Estate Surveyors and Valuer (NIESV) was founded in 1969 by a handful of Chartered General practice Surveyors who were trained mainly in the United Kingdom. The institution was granted official government recognition by the Estate Surveyors and Valuers Decree No. 24of 1975.
Furthermore, the Estate Surveyor and Valuers Registration Board of Nigeria (ESVARBON) established by the Decree was a milestone as it sets up the necessary official machinery for the regulations of the profession of Estate Surveying and valuation in the country.
The profession is been faced with diverse challenges and confrontations because every profession has its own challenges as well. Therefore, this body of work is to critically examine the challenges of the Board and the Institution, analyze the problems and proffer a solution to them.
Longman Dictionary of Contemporary English defines challenge as something that tests strength, skill, or ability, especially in a way that is interesting.
NIGERIA INSTITUTION OF ESTATE SURVEYOR AND VALUER (NIESV)
This is the body recognized by the Federal Republic of Nigeria through the constitution. The institution was granted official government recognition by the Estate Surveyors and Valuers Decree No. 24of 1975.The Nigerian Institution of Estate Surveyors and Valuers (NIESV) was founded in 1969 by a handful of Chartered General practice Surveyors who were trained mainly in the United Kingdom.
OBJECTIVES OF THE INSTITUTION
The main objectives of the Institution are:
i. Establishing a high and reputable standard of professional conduct and practice in landed profession throughout Nigeria.
ii. Securing and improving the technical knowledge of its member and facilitating the acquisition of such knowledge by close collaboration with Universities, other institutions of higher learning and other professional bodies.
iii. Promoting the general interest of the profession and maintaining and extending its usefulness for the public good.
iv. To initiate and consider any legislation relevant to the objectives of the institution.
v. Acquainting the public with the role of the Estate Surveyor and Valuer in the economic development on Nigeria.
vi. To engage in any other lawful activities this may be conducive to the promotion of any or all the objectives of the institution mentioned above for profit or non-profit purpose.
ESTABLISHMENT OF ESVARBON
The Board was established by the Estate surveyors and valuer registration Board of Nigeria Act of 1975. The board is charged with responsibility of:
i. Determining who are Estate Surveyors and Valuers.
ii. Determine what standard of knowledge and skill require of Surveyors and Valuers
iii. Secure establishment and maintenance of a register of persons entitle to practice as Estate Surveyors and Valuers and the publication from time to time.
iv. Regulating and controlling the practice. And
v. Performing other functions conferred on the Board. Sect 2(a-e)
ROLES PERFORM BY THE BOARD
The roles performed by the Board are:
Ø The Board shall prepare the financial budget.
Ø The Board shall appoint registrar for the Board
Ø The Board shall approve and register Estate Surveyor and Valuer who is qualified i.e elected by the Institution.
Ø Issuance of certificate as evidence of registrations
Ø The Board carries out disciplinary actions on erring professionals and penalized defaulters.
Ø Provide rules and regulations for the Institution.
CHALLENGES FACING NIESV AND ESVARBON
One of the challenges facing estate surveying practice in Nigeria is low salary and high rate of unemployment. The salaries including allowances earned by fresh graduates working in private firms in Lagos range from N40, 000 to N60, 000 per month, whilst it is lower elsewhere in the country. Those working in banks, oil companies, and development companies are better off. When this amount is weighed against the cost of living in Lagos, hardly are the workers able to have something left for feeding and other expenses. The consequence is lack to dedication to duties and willingness to pull out of employment immediately after registration with the NIESV and ESVARBON. The workers are not helping matters as they are always eager to sidetrack their employers by handling sales or lettings without knowledge of their employers.
Leadership is another greatest challenge facing the Institution and Board. Leadership is about working to advance the success, the continued relevance and sustainability of one’s constituency and contributing effectively by positive examples to the improvement of the structures and systems of one’s constituency to make them better than you find them and impacting on the community positive attitudes for the better.
Lack of encouragement of partnership of professionals. Mr. Kunle Elebute, said “in 2009 that the practice of estate surveying and valuation in the country was presently fragmented with over 500 registered firms with 270 operating in Lagos alone”. But currently, we have over 2,259 registered Estate Surveyors and Valuers.
The fact that the industry is highly fragmented, according to him, makes it difficult for firms to be market makers, while the adoption of scale of fees for the remuneration of practitioners tends to set a cap on maximum fees that can be charged rather that a minimum level of fees. The use of scale of fees, he added, could destroy the profession, as it would make it difficult to differentiate firms and professionals according to size and competences.
Giving an overview of the profession, Elebute, who is a chartered accountant, said that other major challenges facing estate surveying included lack of enforcement of the legislation governing it, little recognition and awareness by members of the public, low professionalism on the part of practicing members and invasion of the industry by unlicensed and non-professionals that is many predators encroaching on the profession.
There are also the educational challenges facing the profession of estate management in contemporary Nigeria. Training of future estate surveyors and valuers, and re-training of practicing ones have been very challenging. There is evidence that the syllabuses adopted by some of the higher institutions offering estate management are outdated and the standard of the graduates is questionable. This state is corroborated by Oloyede and Adegoke (2009) who stated that young graduates of estate management are deficient in valuation, agency, feasibility and viability appraisal, and property management.
It must be noted that property investment and valuation are dynamic with issues cropping up in contemporary World. New mechanisms are emerging on daily basis that calls for accuracy. For instance, course on Property Marketing, Portfolio Management, Facilities Management, ICT Certification courses have not been embraced, except in private Universities. Little attention is paid to new technological details that are evolving into the different units of real estate practice. The evolving of technology round the globe pose a great work on every profession, so there ought to be advancement in the technological aspect of the Board and the Institution.
Considering the current state of academic and professional real estate research and feedback from the practitioners, it is evident that there is a very wide gully between the academic and practitioners. It appears the two are together yet stand apart! Firms are unwilling to divulge the simplest information on the number of lettings or sale completed over certain period. This posed the question as to whether the two worlds of academic and professional real estate research in Nigeria are networking to form new and innovative hybrid approaches, or are they dividing and moving further apart? Practitioners outside the academic circles have criticized those in academic for not producing applications that can be transferred to industry for investment and portfolio decision-making or to government for policy making and administration. It is contended that most university-based research today is targeted towards a narrow constituency in the academic community and focused more on academic performance indicators rather than making a contribution to industry. On the other hand, professional real estate practitioners have been criticized by academics for not opening up to them in terms of posing research problems and funding such research, and lack of interest on the part of practitioners to implement the econometric forecasting models or innovative portfolio optimization techniques derived by them. Data on number of letting and sale transactions, sale price of properties, and valuation that would have assisted academics carry out research are always treated as confidential matters.
Another challenge facing estate surveying profession in Nigeria is the high level of disparity in opinions of values. Studies have shown that there is great inconsistency and irrationality in opinions of values expressed by estate valuers. This challenge arises as a result of failure to adhere to valuation standards put in place by the Nigerian Institution of Estate Surveyors and Valuers (NIESV) and other internationally acceptable standards – The Uniform Standards of Professional Appraisal Practice (USPAP), The RICS “Red Book”, The Appraisal Standard Board of the Appraisal Institute of Canada (AIC); adoption of dissimilar bases and methods of valuation, dissimilar reporting styles, clients’ influence, and over-protection and non-disclosure of information on transactions they carry out.
The challenge posed by effects of legislations cannot be ignored; one of such is the Land Use Charge Law 2001 in Lagos State. The Land Use Charge is a form of tax levied on property to finance public expenditure. Its payment is based on annual capital sum payable by the owner. Section 20 imposed penalties for delayed settlement of Land Use Charge, the amount payable as penalty depends on the length of period the payment was delayed. If period of delay is between 45 and 75 days attracts 25% of the original Charge payable as penalty; between 75 to 105 days, 50%; between 106 and 135 days, 100%; after 135 days, the property becomes liable to receivership until outstanding taxes, penalties, and administrative charges are fully paid. The Law ignored the source from where the Charge is to be paid, which is the rent. In this regard, when there are problems in collecting such rent, making the property fall into receivership after four months is highly punitive on the owner and estate surveyors since the Charge would be afforded from the rent.
Another legislation that poses great challenge to profession of real surveying and valuation in Nigeria is the Economic and Financial Crimes (EFCC) Act. Sections 17(a), (b); 18 and 24, in a nutshell, put the onus on an estate surveyor to prove that he is not aware of concealment, removal from jurisdiction, transfer to nominees or otherwise retains the control of a proceed of a criminal conduct or illegal act on behalf of his principal. It also provides that a person knowing that any property in whole or part directly or indirectly represents another person’s proceeds of a criminal conduct and uses that property or has possession of it, commits an offence and is liable on conviction to imprisonment for a term not less than 5 years or fine equivalent to five times the value of the proceeds of the criminal conduct. This implies that the estate survey must be vigilant and investigate all instructions that they secure as illegal monies are being diverted into real estate investment. The estate surveyor may have to strive hard to prove that he had no knowledge of the transaction being illegal.
Similarly, Section 5(1) of the Money Laundering (Prohibition) Act 2004 classified professionals dealing in transactions involving money into financial and non-financial institutions. The section provides that a designated non-financial institution dealing in cash transaction must submit to the Federal Ministry of Commerce declaration of its activities, including seeking information about the clients and filing of reports about him and his financial transactions within seven days. Section 6(2) made it mandatory for non-financial institution (to which estate surveyors are classified) to disclose financial transactions involving funds in excess of N1,000,000 or its equivalent (in case of individuals) or N5,000,000 or its equivalent (in the case of body corporate). Criminal proceedings may be instituted against the principal partner, and employees of the firm may be charged with conspiracy, and the NIESV may be forced by to further penalize the offender by revocation of practice license.
In buying properties in Nigeria, the guiding doctrine is “caveat emptor”. Many of the instruments of title are either cloned or forged. Many practitioners, their clients, banks, and other financial institutions have fallen victims of the fraud. This is a serious challenge to the practice of estate surveying in the country. It dents image and affects the practice. There is a cartel of fraudsters who specialize in cloning and forging title documents supposedly in security room at the Land Registries. They often use the forged documents to obtain loan from the financial institutions or sell the property only to disappear thereafter. The Governments are equally disturbed. For example, in a paid advert at Page 32 of The Nation of Tuesday, 27th July, 2010 signed by the Permanent Secretary, Lands Bureau, Lagos State attention of the general public was drawn to the menace and advised that proper authentication of all instruments of title should be carried out at the State Lands Registry before consummating sale or lease transactions.
Another challenge facing NIESV and ESVARBON is that members abandoned their ethical duties and responsibilities in their quest to be rich.
RECOMMENDATIONS AND CONCLUDING REMARKS
In closing the gap between academic and professional real estate research, there needs to be leadership and capital committed to the process. There is the need to catch up with modern trends in real estate education so as to compete with others across the globe. Professionals must measure up to the latest innovations in estate management; the conventional approaches to carrying out professional assignment have become increasingly inadequate. There is therefore great need for estate surveyor and valuer to update and even expand on his knowledge base so as to participate effectively in the shape of things to come.
In the light of the prevailing challenges hindering the growth of the industry, there is need for players to scale up operations in order to reposition the industry, and the quickest route to achieving this is the formation of medium sized and large partnerships with 10 to 30 partners in a firm. A workable model is the coming together of a number of small and medium sized firms partnering to form larger ones with the purpose of exploiting the growth opportunities in the real estate industry. Some of the strategies that estate surveyors and valuers may adopt to increase income and maximize the opportunities created by shifting market conditions are: maximizing technology and the internet to the fullest – this will include marketing on the internet and concerted effort to direct traffic to the websites; participating in or building a team – forming a formidable team through partnership (the benefits of partnerships include ability to determine the market, increased specialization by partners as they would be able to actively participate in every aspect of business as per their knowledge, skill and experience, which would increase value delivery to clients; improved business development and encouragement of referrals between units to enhance profitability); training and retraining staff and adequately remunerating them (sponsoring the pupil estate surveyors to attend MCPD, National Conference and Seminars); direct link with academics (funding of research projects and application of research findings).
There is need to introduce and enforce valuation standards relating to methodology and reporting, internationalization of and mutual recognition of professional qualifications across the globe, raising the profile of the profession both nationally and globally, and ensuring that professional fees are fully paid. Likewise, it is high time the institution critically examined the provision that made it mandatory for firms to adopt the names of their owners. This current practice is limiting their operations and does not give room to effective practice.
Mutual Recognition will become device for facilitating efficient global working place for surveying services. Globalization of services is a topical issue that we require to respond to this challenge and devise the means to ensure global free movement, so that the process reflects the requirements of the surveyor. However, in order to work anywhere in the world, we need to be sure that our professional qualifications will be recognized. Until we have total freedom to practice worldwide, and that means recognition of our qualifications by other governments, professional bodies and by international clients, surveyors are not going to be in a position to respond to the global challenge.
Reliable research will be carried out for benefits of stakeholders when market-based if there are official market data freely and publicly available, especially from practitioners. It is also necessary for such data to be available for all types of transacted property and across all geographical locations. To buildup a sales price register (transaction register) market should be transparent and open and stated price in contracts has to be reliable. The NIESV Research Committee has great role to play in this respect by collating information of properties across the country through the existing branch network of the Institution.
There may be need for NIESV to put pressure on the Lagos State Government and other states where laws that are injurious to the practice of estate surveying and valuation are operating. The Land Use Charge Law 2001 must be amended to cater for default in rent payments by tenants.
In respect of the EFCC and Money Laundering Acts, estate surveyors must tread cautiously in collecting cash payment for transactions involving large sums of money. Apart from this, efforts must be made by estate surveyors to collect information on clients involved in cash transaction to prove that he had taken due steps to determine the clients status, while all letters of offer and acceptance and receipts must be duly signed by the estate surveyors and the clients. The documents must be kept safe for many years, even for as long as their firm remains in practice.
Finally, before buying or leasing properties in Nigeria proper search and verification must be carried out at the Lands Registry. However, experience has shown that such search alone will not suffice as there are occasion of connivance of the officials of the Lands Registry in perpetrating the fraud. There may be need to go further to do personal search within the neighbourhood of the property and ask questions pertaining to determine if it transaction is genuine before making attempt to consummate it. At all times, experienced estate surveyors and valuers must be engaged for purchase or lease of properties. A search may actually show that the document exists at the Registry and no legal mortgage exists but may not reveal equitable mortgage or other lien that may adversely affect the transaction.
Wages and salaries of Estate firm workers need to be scaled up in other tyo encourage the staff and boost their morale to work.
In conclusion, this paper has revealed that many of the challenges confronting the valuation profession across the globe are interconnected. There are enormous pressures for valuers to compete for work, to produce more of it but in less time, to meet increasingly complex and stringent standards of professional practice within a harsh environment. The inability of some valuers to keep abreast of the dynamic and changing environment with falling standards of valuation practice and greater exposure to risk may be attributed to failure to attend Continuing Professional Development (CPD), Seminar, Conferences and other courses to improve their performance. The challenges discussed in this paper are surmountable only if we are desirous, serious and prepared to adopt the suggested recommendations.
REFERENCES
Kunle Onifade & Sunday Olayide (2007); Professional Practice of Estate Management in Nigeria. Ado – Ekiti, Adetayo Printing (Nig) Ltd.
Longman Dictionary of Contemporary English
Olusegun G.K (2008), Estate Office Practice in Nigeria Lagos, Climax Communication Ltd.
http://thenationonlineng.net/web2/articles/1633/1/Surveyors-board-inducts-89/Page1.html
http://www.compassnewspaper.com/NG/index.php?option=com_content&view=article&id=44622:estate-surveyors-review-industry-activities-strategise-on-way-forward&catid=72:property&Itemid=710
Economic Financial Crime Commission Act (2002).
No comments:
Post a Comment