Estate Agent

For anybody dealing with an agent, the verification steps are short and they are worth doing every time.

Establish who the agent acts for. An agent acting for the seller owes duties to the seller, not to you, and their advice should be read accordingly.

Ask for written evidence that the owner instructed them. A letter of authority, an agency agreement, or direct confirmation from the owner. An agent who cannot produce it may have no instructions.

Meet the owner or their lawyer before paying anything, and pay the owner rather than the agent wherever possible.

Where money must pass through an agent, agree in writing what it is for and obtain a receipt naming the property and the payment.

And verify the property independently: the title documents, the searches, and the identity of the person purporting to own it.

For an owner instructing an agent, the corresponding step is a written agency agreement: the property, the price, whether the appointment is exclusive, what the commission is and when it is earned, whether the agent may receive money, and how the appointment ends.

The recurring loss is money paid to somebody with no authority.

A prospective tenant pays an agency fee and a caution fee to a person who showed them a flat. The person was never instructed by the landlord, or was instructed to show the property and not to collect money, or has shown the same flat to four people. The money is gone and the person is unreachable.

The protections are unglamorous and effective. Ask for written authority. Meet the owner. Pay the owner. Get a receipt naming the property and the payment. Verify the title before committing.

The second issue is commission disputes on the agent's side, and they run the other way. An agent introduces a buyer, the parties then deal directly, the transaction completes, and the owner refuses commission on the basis that the agent did not conclude it.

The answer is one sentence in an agency agreement stating the trigger: commission earned on introduction of a party who subsequently completes, payable on completion. Nigerian courts have addressed agency commission on the facts of what was agreed and what the agent did, and an agent with nothing in writing is arguing about an understanding.

The third is dual roles. An agent representing both sides, or taking a fee from both, has a conflict that should be disclosed. An undisclosed commission from the other side is a secret profit and it is recoverable.

And for anybody instructing an agent to sell, exclusivity should be time limited. An open ended exclusive appointment with an agent who then does nothing removes your ability to sell.

Three roles in Nigerian property, with different standing.

An estate agent introduces parties to a transaction for a commission. General estate agency is not a regulated profession, and anybody can hold themselves out as one.

An estate surveyor and valuer is a member of a regulated profession, registered with the professional board. Formal valuation for lending, probate, compulsory acquisition and litigation is their function, and a valuation from outside that regime will not be accepted by lenders, courts or tax authorities.

A property manager runs a property on the owner's behalf: collecting rent, arranging maintenance, selecting tenants and administering service charge, usually for a percentage of collections.

A property owner may engage all three at different points, and should engage each on written terms setting out the scope, the fee and the authority to receive money.

The absence of general regulation is the fundamental limitation, and it means the market contains people with no accountability.

Recovering money paid to an agent who disappears is also practically difficult, however clear the legal position.

Commission disputes are common on both sides because the trigger is rarely agreed in writing.

And an agent owes duties to their principal rather than to the other party, which buyers and tenants frequently misunderstand when they take the agent's advice about the property.