Property Technology or “PropTech” involves the use of technology to create, provide, and deliver innovative real estate products and services. Although, the Nigerian real estate market can be said to have recently adopted technology, it is experiencing considerable growth with more people adopting tech solutions in property transactions.
How is the PropTech industry structured in Nigeria?
PropTech companies, based on the products and services they offer, can be structured into several groups. Some of which are:
- Property Listings (listing and advertising properties for sale);
- Investment and Financing (co-investing to finance the construction of properties);
- Property and Community Management (integrated tools to help communities and homes manage their properties);
- Flexible Living (co-living spaces and peer to peer housing, such as Airbnb).
Are there regulations aimed at the PropTech industry?
At the moment, there are no regulations specifically covering PropTech in Nigeria. However, the laws and regulations relating to real estate in Nigeria still apply to PropTech. For example, PropTech companies providing Flexible Living services would need to adhere to regulations mandating that Governor’s Consent be sought for leases above 3 years.
PropTech companies dealing directly with residential or commercial properties would need to adhere to building regulations and pay property taxes such as Ground Rent, Neighbourhood Improvement Charges and Tenement Rates (in Lagos, these taxes have been consolidated into the Land Use Charge).
A PropTech company wants to lease an apartment to me, what should I know?
- Carry out due diligence checks;
- Advisable to collect rent receipt directly from the landlord. This is to avoid the landlord disclaiming the transaction later on;
- Pay a visit to the property beforehand to confirm that you are getting exactly what you have been told you will get.
What if I am buying property?
- Confirm title to the property is registered at the Lands Registry;
- Confirm the company has the legal right to transfer the property to you;
- Confirm that the property is free from government acquisition;
- Pay a visit to the property to confirm its location, size and physical attributes. Also enquire from neighbours if evidence of contrary possession exists.