The Hidden Fraud in Nigeria’s Real Estate: How Estate Developers Exploit Home Seekers

For many Nigerians, owning a piece of land or a home is not just a dream – it is the ultimate badge of stability, success, and security. Real estate companies know this. They know how emotional the decision is. They know how many families will stretch their finances just to lock down a piece of land for their children’s future. Unfortunately, this vulnerability is exactly what many crooked estate developers are exploiting today.

Over the last few years, complaints about real estate scams have skyrocketed. And while outright “one land, two buyers” fraud still exists, a new and more sophisticated type of exploitation is spreading: the instalment-payment estate scheme. On the surface, it looks simple – pay gradually and own land. In reality, many buyers find themselves trapped in a carefully designed system where the company always wins and the customer almost always loses.

The Crooked Sales Tactics

The Initial Hook

Sales agents invite you to a land inspection. You will be shown wide open land, sometimes with a signboard saying “Proposed Estate.” They speak of prime location, easy payment plans, and future appreciation. The only thing you need to do is pay the first installment.

But here is the trick: no contract is given at this stage. You are told the agreement will come after your deposit. At that point, your emotions are already high, and you do not want to “lose the land.”

The Contract Trap

By the time you finally receive the Contract of Sale, the terms are nothing short of predatory:

You must pay developmental fees separate from the land price.
You must pay legal fees separately.
You must start construction within a strict timeline – sometimes as short as 12–24 months – or risk forfeiting the land.
If you default or try to exit, they deduct 20% of your deposit before considering a refund.
Refunds take 90 days or more, if they come at all.

Suddenly, the dream home begins to look like a legal nightmare.

The Human Cost

Consider Chika, a young mother of two, who had been saving for years. She saw an advert: “Own Land in Lagos for Just ₦50,000 Monthly.” Excited, she paid her initial deposit. Three months later, she finally received her contract.

Now she learned the ₦2 million land actually required another ₦1 million in “developmental fees.” If she did not start building in 18 months, her plot would be taken back. If she withdrew, she would lose 20% of her deposit. Her refund would take 90 days – and might never come.

For many buyers like Chika, this realization comes too late. Out of frustration, they either accept the unfair terms or forfeit their investment.

The Arbitration Trap

Most of these contracts also contain a clause that says: “All disputes shall be referred to arbitration.”

To an unsuspecting buyer, it sounds fair. But in reality, arbitration in Nigeria is expensive. Both parties usually share the cost, and for small buyers who have deposited ₦200,000, the arbitration fees alone can exceed their entire investment.

So, the real estate company knows you will not pursue it. They are protected by the cost of justice itself. See more on the
Arbitration and Mediation Act in Nigeria
to understand how dispute clauses can impact your rights.

The Facility Management Game

Even buyers who manage to pay off the land and build on it soon discover they are still tied to the developer.

The real estate company automatically becomes the facility manager of the estate.
Service charges must be paid indefinitely, often without proper accountability.
Over 10 years, these service charges can add up to nearly the same amount you spent buying and building the house.
You cannot sell your property without the company’s consent. Some contracts give them a right of first refusal.
When you sell, they also earn commission from your transaction.

At that point, many buyers are left wondering: do I really own this property, or am I just a tenant of the estate company?

Why This System Persists

Several factors explain why these fraudulent practices continue:

Emotional Selling: Home ownership is tied to dignity in Nigeria. Buyers often ignore red flags because they desperately want land.
Information Asymmetry: Buyers do not always know their rights or demand to see contracts before paying.
Weak Enforcement: Even when complaints are made, regulatory agencies are slow to act, and legal recourse is costly.

How to Protect Yourself

If you are considering buying land or subscribing to an estate scheme, take these steps:

Never Pay Without a Contract – Insist on seeing the draft Contract of Sale before making any payment.
Hire a Lawyer Early – A few thousand naira in legal fees today can save you millions tomorrow. Contact Edelweiss Partners Real Estate Lawyers for guidance.
Watch Out for Hidden Costs – Developmental fees, survey fees, legal fees – ask for a full breakdown before signing.
Check the Timeline Clauses – If the company insists you must build within a short time, it is a red flag.
Research the Company – Do not be swayed by flashy marketing. Search for reviews and complaints online.

Conclusion

The sad truth is that many Nigerians are being defrauded in the name of estate development. These companies

Oki Achika Esq, Managing Partner