NREH: Good afternoon sir and thank you for granting us this interview. Kindly introduce yourself.
Bababunmi: My names are Akinyemi Bababunmi, I am the CEO of Badekin properties, a real estate consulting firm, and we have been in the industry for quite a while now. To God be the glory we are doing very well in the industry.
NREH: How many years have you been in the industry?
Bababunmi: We have been in the industry for Over 20 years. The firm started almost immediately after my university education. We have gone up and down the ladder in the industry. We’ve managed both big estates and are managers to the upper, middle and the lower income group at the moment.
NREH: In a little bit of overview, what section of real estate do you cover?
Bababunmi: We are limited to management of estates such as MKO Abiola garden, we were managers there for 10 years, 2003 – 2013. Presently we are facilitating managers to Millennium estates in Lekki, in Ibadan we have Oke ajala estate and aero drum GRA, etc. Also we are into Agency, which involves buying and selling. We buy and sell on behalf of clients, especially clients that are outside the country. However, we specialize more in management of individual properties. Currently our company can boast of large management portfolio and that we are expert in managing both the tenants during crisis, the properties and even the clients when they don’t want to meet up their side of obligation in tenancy agreement.
NREH: In the cause of carrying out these duties, what challenges have the company faced and/or are facing as regards to real estate in Nigeria?
Bababunmi: challenges are numerous. First we have the ‘wear and tear’ of properties, tenants will always complain and don’t want to see some of the responsibilities as theirs, they believe most of the responsibilities should be for the owners – the landlords and landladies. Secondly, the most difficult part of the profession for those of us into management of properties in the last 2/3 years has been collecting rent from tenants. It’s been a tedious task. We have to appeal to the landlords/landladies as the case may be to exercise a bit of patience considering the state of the nation or the tenants predicament.
The other challenge on the issue of development has been funding. The interest rate is not encouraging for anyone to go to the bank in order to raise funds in completing a property or to start from foundation. There is no feasibility study in the real sense of it.
NREH: From what you just stated, where do you think the line should be drawn when it comes to tenancy and landlord responsibility?
Bababunmi: The tenancy agreement or lease agreement depending on the terminology given to it isn’t explicit enough. If line is to be drawn, there should be an explicit agreement prepared by the lawyer rather than the prototype tenancy agreement we have for properties presently. The present agreement does not state whose obligation it is when there are damages in the building. Tenants doesn’t find it funny when having been paid so much for an apartment would then have to do minor repair within the first few weeks of taking over the property. It is a burden on them and an addition to rent.
NREH: You also mentioned something about loan charges when you want fund for investments and the like, what should the government do? Are there any policies in place that are not being followed or more policies need to be made?
Bababunmi: I know some of the mortgage banks in Nigeria have started giving loans for mortgage for 5-10 years but they should do more than that. Government should encourage mortgage so that one can pay back mortgage loan over the period of 10-15 years. Secondly, government should go into massive development of houses for the lower income groups, those are the people that are mostly affected by the harsh economy we are actually going through in the country. Government shouldn’t expect the common man on the street to benefit from a 3 bedroom flat which goes for 15 million. They can’t afford such luxury payment. They should invest more in low income houses such as miniflats and self-contain kind of apartment whereby its plan can be stretched over a period of 5-6years, that in my opinion would reduce the tension on the housing demand in the country.
Government should also do more in order to create more federal mortgage bank branches, thereby enhancing the relationship between the mortgage banks and the investors.
NREH: Talking about Lagos Homs, the present administration has talked a lot about how they have built these houses to eradicate housing deficit, do you think there has been progress compared to the poor masses that needs these houses?
Bababunmi: They are not eradicating, they are only building these houses for the middle and the upper class. If you look at the percentage of the population of any city, about 60% of the populace usually fall under the lower class income earners, about 15% in the middle and 10% in the upper class. Therefore we need more development for the lower income group. When I say Lower income earners, I refer to those whose monthly salary is less than 30,000 Naira. Imagine a situation whereby you rent out a single room to just one person and find out about 6-8 people now reside in that singular one room space. If the government truly wants to eradicate housing deficit then they should focus more on the low income group.
NREH: Talking about price, rent in Lagos is becoming a nightmare. Looking at what people earn and what they have to pay for rent, how do you think the government can step in to capture this price and regulate it?
Bababunmi: Every state has rent control but I can assure you it’s not being followed strictly.. Lagos state has.
NREH: what is supposed to be the function of the rent control?
Bababunmi: They set maximum rent any landlord can charge for their properties, depending on its size and location. It is sad that the rules are not being followed. The rent control was created to help the lower income group although some areas are not covered by these rules. Areas like Ikeja GRA, Ikoyi through Island, some part of Lekki and VGC. But basically, what have been effectively controlled is the number of years a new tenant pays for while moving into a new apartment. Every house owner now accept a minimum of 1 year rent. The government can actually enforce rent control through professional bodies in the industry, such as NIESV and NIA.
NREH: Do you belong to any of the bodies’ mentioned?
Bababunmi: yes I belong to Nigeria Institute of real estate practitioners, that’s the bit part of Nigeria institute of surveyors and valuers.
NREH: you hold any position?
Bababunmi: No, I am just a member. I pay my dues and attend meetings.
NREH: So in a situation whereby a landlord refuses to collect the normal 1 year rent that has been signed in by law, can a client pursue this right in court? Has there been such situation?
Bababunmi: yes, the client have the right to pursue if they have the time but most tenants don’t have the time and that is a problem for most of us in this country, we don’t enforce our right. There are lawyers for masses that can take it up. What they would do is write the landlord and confirm if it is actually true that he is insisting on 2years rents. To answer your question, yes, tenant can enforce it if they have the time. But no tenant would want to go through that trouble.
NREH: What’s the next phase for Badekin properties?
Bababunmi: The next phase of Badekin properties with the new administration is to go into massive development of housing for the lower income group. We are not driven by passion for profit but we want to reach out to the masses. There are homeless people who can easily afford a room if the rent is affordable. If the pressure on housing units is reduced, some landlord would beg to have tenants in their houses. But because there is acute shortage of supply that’s why the landlords take advantage of their tenants.
We are also looking at partnering with some people to set up a mortgage finance, the proposal is on. This would help make access to loans easier. People will be able to get loan to build or buy houses and then pay back according to what they earn. This again has to do with the change we are expecting from the new government where he promised everyone a job. Because if you don’t have a job, there is no way you can access a loan. Once you are skilled and gainfully employed, surely you will benefit from our next phase within the next 1/2 years.
NREH: Thank you sir.