Improper Documentation by Banks Challenge to Property Foreclosure, Says Balogun

Banks have been blamed for their inability to foreclose property they provided mortgage for because of improper documentation.

Managing Partner, Libra Law, Mr. Afolabi Balogun stated this while discussing ‘Foreclosure and its effect on Real Estate’, as the Guest Speaker at a Stakeholders’ Engagement organised by Lagos State Real Estate Regulatory Authority, LASRERA, with the theme: ‘Redefining Opportunities in Real Estate: Regulations and Expectations.’

Balogun stated that most times “banks are the major challenge with the Foreclosure of mortgaged property, due to improper documentation by the bank.”

He explained that Foreclosure Clause and redemption of mortgage is governed by Provision of Order 55 Rule of the High Court of Lagos State Civil (Procedure) Rules 2019, which requires banks to only file originating summons and furnish the Court with substantial particulars of the debt but that most times banks are unable to do that.
He stated that banks should be more diligent with these approaches in order for Courts to speed the process of the foreclosure in their favour.

Meanwhile, the Lagos State government is providing legislation to improve the ease of doing business in the state’s real estate sector.

Speaking at the stakeholders’ meeting, the Special Adviser to Lagos State Governor on Housing, Mrs. Toke Benson-Awoyinka stated that investors and other relevant stakeholders in the built sector can now heave a sigh of relief from all forms of fraudulent practices following the recent passage of a law for real estate practitioners by the State House of Assembly.

According to Benson-Awoyinka, the state government is ready to curb fraudulent activities in the real estate industry with the right laws and regulations in line with Governor Babajide Sanwo-Olu’s T.H.E.M.E.S Agenda of making Lagos State a 21st Century Economy.

Speaking on the rationale for the Stakeholders Engagement, the Special Adviser said that while LASRERA and its stakeholders are eagerly awaiting Governor Sanwo-Olu’s assent to the new law, it was necessary to further engage relevant practitioners in the industry about the content of the law and also encourage them to take ownership of it.

Apart from engaging the stakeholders, the Special Adviser added that the forum also seeks ways of exploring the diverse opportunities inherent in the Real Estate industry, while also exposing participants to the industry regulations and expectations.

“The overall intention for this stakeholders’ forum is for all participants to learn new and relevant skills that would be useful in upscaling your businesses and develop the industry as a whole.”

She said that the stakeholders Engagement was organised to ensure that the policies of the Lagos State Government for the Real Estate industry gains the confidence of Real Estate Agents, with a view to curb fraudulent practices in the industry.

According to her, “As a government that cares about this profession, we will continue to ensure effective and conducive environment for Real Estate business and investments to thrive in Lagos State.

“Let me inform this gathering that the continuous rise in population, migration and demand for properties from citizens home and abroad, will lead to an increase in the demand for accommodation, property investors and homeownership in Lagos State hence the need for all practitioners in this sector to rise up to this challenge and be ready to leverage on this fact.”

Benson-Awoyinka called on all the stakeholders to join hands with the Government so sanitize the sector, saying that “the Real Estate industry has visible and invisible untapped opportunities that can positively impact on the businesses of Estate Agents and other investors in the industry.”

Benson-Awoyinka stated that “to achieve this, it would require the collaboration of all industry stakeholders including t real estate professionals, practitioners and property developers to boost the Sector in the State.”

She maintained that in order to unleash the endless opportunities that the real estate industry has to offer, regulations must be put in place to protect the interest of investors and the general public.

The Special Adviser assured the stakeholders that there will be transparency in the Real Estate industry, adding that all hands must be on deck to tackle all the challenges in the industry and alleviate the fears of the public and investors.

Speaking on the introduction of LASRERA Bill (The Benefits & Impact), the State Attorney General and Commissioner for Justice, Mr. Moyo Onigbanjo, SAN, clarified that the intention of the law is not to regulate the Practioners, saying that the real estate body already has a body in charge of regulating its activities.

He added that the law becomes necessary in order to curb fraudulent practices in the real estate sector and also assure investors in the sector of a fair deal as a way of promoting ease of doing business in Lagos State.

He said: “We’re interested in securing the transactions of investors and providing necessary support for all relevant stakeholders in the real estate industry, hence the passage of the new LASRERA law by the legislative arm of the state government.”
The Keynote speaker at the event, Mr. Gboyega Fatimilehin, who discussed “Real Estate Regulation as it affects Estate Agency,” said countries with existing regulatory framework for the real estate sector and its services were better able to attract investors.

“This allows for a transparent and effective functioning of the sector and gives the regulators (or government) the financial and administrative independence to aid in the regulations which reassures investors.

“A well-regulated, fully-functioning, and transparent real estate market can be a very important factor in the growth of a nation’s economy. A market that is settled, predictable and trusted can experience high levels of growth and investment.”

Fatimilehin stated that there was an ongoing crisis in the real estate sector and that stakeholders must continue to see ubiquitous instances of fraud and malpractice in the sector in addition to the aforementioned lack of transparency, which has reduced the level of trust in the market.

“This is a hindrance to investment in the sector both in terms of the local capital and foreign direct investment which is required to address the shortage of adequate real estate products in our market,” he said.

Source: This Day Live