Tope Adebayo LP has called for stronger regulatory safeguards in Nigeria's off-plan real estate sector, warning that weak oversight continues to expose property buyers to fraud, project abandonment, and financial losses.
Report on Off-Plan Real Estate
The law firm made the call in a report titled Regulating Off-Plan Real Estate in Nigeria: Comparative Insights and Reform Options, which examines the growing popularity of off-plan property acquisitions and the legal risks surrounding the market.
According to the report, off-plan property transactions have become increasingly attractive in recent years as buyers seek to secure properties at current prices with the expectation of future appreciation, while developers rely on advance payments from buyers as an alternative to institutional financing.
However, the firm noted that despite the commercial benefits, the current legal framework governing off-plan real estate transactions in Nigeria remains fragmented and inadequate to address the risks associated with such arrangements.
Vulnerability of Buyers
The report stated that buyers are particularly vulnerable because they commit funds before construction is completed and without immediate control over the property.
“Off-plan purchasers are especially vulnerable because they commit funds upfront without immediate control over the asset. As a result, they face heightened risks, including delays, title uncertainties, project abandonment, and, in some cases, outright fraud,” the report noted.
The firm linked these regulatory gaps to the increasing incidence of real estate fraud and substantial financial losses suffered by buyers in Lagos State and other parts of the country.
International Lessons
Drawing lessons from international jurisdictions with more developed frameworks, the report highlighted regulatory models in the United Arab Emirates and South Africa. In Dubai, developers are required to maintain project-specific escrow accounts, with buyer funds released only after verified construction milestones are achieved. In South Africa, post-completion protections are enforced through the National Home Builders Registration Council, which mandates construction inspections and warranty protections.
Nigeria's Regulatory Landscape
The report also examined Nigeria's regulatory landscape, noting that the Lagos State Real Estate Regulatory Authority has emerged as one of the country's most structured regulators of off-plan real estate transactions under the LASRERA Law 2022. According to the report, the agency mandates registration for developers, property managers, and other real estate operators, while also providing mediation and dispute resolution mechanisms for consumers.
Outside Lagos, however, the report observed that institutions such as the Federal Capital Development Authority and the Abuja Geographic Information Systems primarily focus on land administration without dedicated protections for off-plan buyers.
Structural Issues
The report further identified structural issues affecting the real estate sector, including land title and registration challenges tied to the Land Use Act 1978, which vests land ownership in state governors while granting buyers rights of occupancy rather than absolute ownership.
Recommended Reforms
To address these concerns, the firm recommended comprehensive reforms, including improved land registration systems, enhanced access to development finance, streamlined planning approvals, tax reforms, and the introduction of mandatory escrow arrangements for off-plan projects.
It concluded that while off-plan transactions remain commercially valuable in well-regulated markets, the success of the model in Nigeria will depend largely on stronger legal protections and more robust enforcement mechanisms.
“Lagos State has demonstrated that meaningful reform is possible. The next step is to extend and strengthen these protections across the country, while addressing the underlying structural constraints that affect the real estate sector,” the report stated.
The firm added that until broader reforms are implemented, legal advisers and transaction parties must take greater responsibility in ensuring that risks are properly allocated and contractual protections are adequately structured.
