PROFESSIONALISING ESTATE AGENCY PRACTICE IN NIGERIA: EMEKA D ELEH fnivs frics fnim
Being the text of a paper presented at the first Association of Estate Agents in Nigeria (AEAN) conference which held in Lagos on the 23rd of April 2015
In order to better address the topic, it is vital to define the salient terms therein.
Professionalising is derived from the term Profession/Professional. A professional connotes a person with a distinct competence for a specified function or discipline. Such a person would have been trained or has acquired the necessary training in that discipline to become a professional in that field. A professional exists within the context of a profession; a distinct discipline or career path with its own training, qualification and membership requirements and standards. It is in the bid to establish such standards that professional bodies exist to ensure that persons within its fold have the requisite training/qualification and also abide by its rules and ethical standards. A professional in any field is a highly regarded person and is deemed to have a certain level of competence expected of a person in that profession.
Estate agency is essentially a land based profession that deals with the business of buying, selling or leasing of interests in real estate, which may be land or buildings or interests therein. Practitioners of this trade are generally addressed as Estate Agents in our environment. Considering the importance of housing in mans hierarchy of needs and the huge deficit that exists in the housing sector in Nigeria, Estate Agents generally play a very important role in the socio-economic life of the country. Generally an agent is a person, who possesses the authority to act on behalf of another person with a view to establishing contractual relationship between his principal and a third party. The person, who employs the agent, is usually called the Principal. Several variants of Agent/Agency exist but that is outside the scope of this paper.
PRESENT STATE OF ESTATE AGENCY PRACTICE IN NIGERIA
The practice of Estate Agency in Nigeria at present remains largely unorganized, unregulated and unprofessional. Apart from the Nigerian Institution of Estate Surveyors and Valuers that has set standards for its practice by its members i.e. Estate Surveyors and Valuers, the large majority of those who practice estate agency do so without the basic training in that field, without any certification or qualification, without any regulation and largely in an unprofessional manner. The practice is generally open to “all comers” and entry and exit are at the sole discretion of the person. Due to the lack of a central professional/regulatory body that will set minimum standards for entry, set standards for its practice, as well as ensure adherence to a code of ethics, most estate agents are generally on their own and quackery with its attendant consequences is very prevalent if not the order of the day. A multiplicity of local estate agents Associations exists but these are essentially local bodies without either the right structure, leadership or plans to advance the practice of estate agency beyond the parochial interest of the founders or originators.
EFFECTS OF THE PRESENT STATE
The effects of this present state are indeed too numerous to count.
The major effects are that due to lack of regulation and requisite competence on the part of the practitioners, the consuming public has been on the receiving end of estate agents in terms of very poor services, fraudulent transactions and losses of income through the activities of dubious practitioners. As a result of this, the public perception of the estate agent is very, very poor. Estate Agents are generally looked upon as persons, who engage in sharp practices and whom you have to deal with, with “all eyes” open. In view of this, the practitioners are not respected in the society. The very low level of respect for the practitioners has led to a situation where both vendors and landlords alike do not see the need to remunerate them appropriately, while the lack of standardization and regulation has led to both the landlords and the vendors turning themselves into agents. In most cases, multiple agents are appointed and owing to lack of standardized practice procedures it usually turns into a cut throat competition amongst them. The level of abortive work done by the average agent is phenomenally high due to the non standardized practice procedure. The police, EFCC and other law enforcement agencies are after the agents in the belief that a lot of money laundering is done through the acquisition of properties with illicitly acquired wealth. The summary of the above scenario is that the average agent is worse off even as the consuming public is being fed with poor services in the sector.
THE PRACTICE IN THE DEVELOPED PARTS OF THE WORLD
On the contrary, estate agency practice in the developed parts of the world is a very respectable profession. It fits into the mould of a profession in that its practitioners are trained in that field, have minimum qualification as prescribed and are certified to practice by the recognized professional body of agents. Practitioners abide by the code of ethics and practice of the professional body and sanctions are meted out to those who breach the rule. A process of continuous training and development for practitioners is mandatory to ensure that they are up-to-date with current practice procedures. The consuming public is happy with their services and the estate agent is a respected professional, who can hold his head high. The practice is well regulated and only qualified persons can practice. In the end, the average agent, is a respected member of the community, is usually well to do (rich) and can hold his head high amongst fellow professionals.
THE PROFESSIONAL ESTATE AGENT
From the foregoing, it can be seen that the professional agent must not only have the necessary training, competence and personae to discharge his duties but must also exhibit a high level of diligence and respect/compliance for laid down standards and ethics of the business.
According to Wayne (2014), Professionalism in real estate agency practice is:
- A combination of appearance and attitude (or presenting oneself “professionally”) and excellent client service;
- Understanding and following the important fiduciary duties imposed on real estate licensees (including placing clients’ interest ahead of those of the licensees). Fiduciary duties impose the highest standard of care and real estate agents must be committed to scrupulously fulfilling those obligations;
- Being organized, disciplined, prepared, trustworthy and responsive;
- Being civil, kind, ethical and responsive (including communicating with clients and parties on the other side) in business dealings;
- Delivering consistently first-rate work and results;
- Following the lawful instructions of clients;
- Having the education, knowledge and experience necessary to achieve the result the clients wants;
In summary, the duties of a professional estate agent are:
- Carry out the lawful instructions of the principal – bearing in mind that we owe fiduciary duties to him (Principal);
- Must show good faith and full disclosure i.e. disclose all information relevant to the transaction (value, desirability, etc);
- Must exhibit a high level of competence expected of an average person in that profession;
- Duties of obedience, loyalty and confidentiality to the Principal;
On the contrary, the Principal will owe the agent the duties of:
- Remuneration – payment of the agreed fee or commission;
- Indemnification – Indemnifies the agent as regards any liabilities arising from the execution of his lawful instructions.
PROFESSIONALISING THE PRACTICE OF ESTATE AGENCY
As earlier explained in this paper, housing is an essential component in the socio-economic development of any country, which explains why governments all over the world, pay enormous attention to it. The scenario is even more pronounced in Nigeria what with our housing deficit put at about 17m units. Real Estate Agents along with other stakeholders in the housing sector, therefore, have a huge role to play in the sector. The present ”all comers” approach in estate agency sector is certainly not good for reasons already adduced hence the need to professionalise the sector. To achieve professionalism in the sector, the right approach will be to work towards ensuring that:
- Estate agents are appropriately trained and certified to practice;
- Establish standardized prequalification and registration protocols for the prospective estate agents;
- Keep a register of all qualified and certified estate agents;
- Enforce compliance to a code of ethics and practice through sanctions;
- Institute and implement mandatory training programmes for practitioners;
- Institute appropriate professional indemnity insurance programmes for members, to ensure the protection of members of the public;
- Set remuneration due to agents whether as single agents or cooperating agents;
- Generally regulate the practice of estate agency;
- Develop and project the practice of estate agency as a respectable brand that will continuously earn the trust of members of the public through quality service delivery of its members.
- Protect and defend the interest of practitioners.
To achieve the above strategies for professionalising estate agency practice in Nigeria, there is the need for a national body that will champion the establishment of training, certification and regulatory protocols for practitioners of estate agency. The body will be similar to other professional bodies like NBA, ICAN, NIA, NIESV, etc and will have the role of developing and protecting the practice as well as ensuring that the interest of the general public and the practitioners are protected.
It is in this wise that one must commend the NIESV for establishing the Association of Estate Agents in Nigeria (AEAN) as a national body for Estate Agents in Nigeria. This Association must now take all necessary steps to establish prequalification procedures, certification and regulatory procedures, to ensure that practitioners have the necessary training, competence and diligence to deliver quality real estate agency services to the public. AEAN must now also work towards developing the practice of Estate agency as a respected Profession with positive public perception much in the same way as the National Association of Estate Agents in Britain.
BENEFITS OF PROFESSIONALISING ESTATE AGENCY PRACTICE IN NIGERIA
Professionalising estate agency in Nigeria will benefit not just the consuming public but also the practitioners. While the public will benefit through improved or quality agency services from reliable and well referenced estate agents, the practitioners will benefit through proper regulation of the practice, which will ensure that only qualified and certified persons practice the trade and that the practitioners are appropriately trained, equipped and remunerated.
The government and its agencies will also benefit in that the practitioners of the trade will be brought under one umbrella, which will make easier the regulatory work of such government agencies like the EFCC in its fight against money laundering.
The need to professionalise the practice of estate agency and to do so now cannot be overemphasized.
As the wave of globalization continues to blow and foreign firms and corporations keep coming in, there is the urgent need for us to fine-tune our practices and procedures, to be in line with international best practices. It may seem like a very difficult task but it can certainly be done and the time to do it is now.
The practice of estate agency is a professional discipline and our agents must have the right training, qualification and certification to hold their heads high; as worthy ambassadors of a profession that has a huge impact on the life of the average Nigerian.
Emeka Eleh, Principal Partner, Ubosieleh +Co., Immediate Past President; The Nigerian Institution of Estate Surveyors and Valuers (NIESV).
Wayne S. Bell (2014), “The professional Movement: Its Importance and a Discussion About What Makes a Real Estate Practitioner a Professional,” California Real Estate Magazine (June/July 2014) Page 20.