Abuja – December 04, 2023 – Viewpoint Housing.
The Nigerian Pension Commission (PENCOM) has a noble intention of helping retirees to own their own homes by allowing them to access 25% of their pension fund as equity contribution for buying a house from a real estate development company. However, this scheme has been marred by fraud and abuse, as some retirees and real estate companies collude to divert the money to other purposes, thereby defeating the original objective of the scheme.
Pensioners approach estate developers with the aim of obtaining allocation letters to present to the pension Administration , whether the developer has a house or not`, they still get these letters and get their 25% allocation. Some of these pensioners are genuine, but they obtain the allocation letters for dishonest reasons; this is because they gather the money and utilize it for other purposes, other than the purpose it was intended for. Thus, it is essential to implement strict procedures to stop these false infractions.
The consequences for the retirees, they are depriving themselves of a secure and comfortable retirement by squandering their pension fund on non-essential or risky ventures. They are also exposing themselves to a possible legal action and possible prosecution by PENCOM and their Pension Fund Administrators (PFAs) for violating the terms and conditions of the scheme. Moreover, they are undermining the sustainability and credibility of the pension system, which is meant to provide a safety net for all workers in their old age.
The consequences for the real estate companies, they are engaging in illegal and unethical behaviors by conniving with the retirees to defraud the pension system. They are tarnishing their reputation and trustworthiness in the eyes of the public and the regulators. They are also risking their business viability and profitability by losing potential customers who genuinely want to buy houses from them. Furthermore, they are contributing to the housing deficit and the social problems that arise from it, such as homelessness, overcrowding, and insecurity.
To curb this abuse, PENCOM and the PFAs should strengthen their sensitization, monitoring and verification mechanisms to ensure that the 25% equity contribution is actually used for buying a house from a registered and reputable real estate company. There should be strict sanctions and penalties on any retiree or real estate company that is found to be involved in this ‘’self-scam’’ fraud,
Other underhand dealings in the Nigerian affordable housing sector. that need to be attended to are:
❖ Overpricing and inflating the cost of houses to exploit the buyers and any government subsidies that may come into being.
❖ Delivering substandard and defective houses that do not meet the quality and safety standards.
❖ Failing to complete and deliver the houses on time or at all, leaving the buyers stranded and frustrated.
❖ Using fake or forged documents and titles to sell or lease the houses to unsuspecting buyers or tenants.
To mitigate these violations and attend to the massive housing deficit in Nigeria the following measures should be considered:
- This is where the Real Estate Development Association of Nigeria (REDAN) can step in and play a pivotal role. In the same vein, REDAN is being advised to withdraw the controversial bill that is allegedly the subject of a presidential veto, review it, remove certain sections from it, update it, add to it, and incorporate a solution to the “loop hole” found in the 25% of “self-scams” that are carried out by retirees working with questionable real estate companies.
- Additionally, this calls for the government to establish an “Umpire Agency” to, among other things, develop, regulate, and enforce severe laws and regulations through the Honourable Minister of Housing and Urban development, Arc. Ahmed Musa Dangiwa. Such an agency may have the following mandates:
- Setting up a monitoring mechanism to regulate the prices and the quality of the houses to ensure affordability and durability.
- Setting up a monitoring mechanism to ensure accountability and transparency in the affordable real estate housing market
- To provide new owners of completed houses a ‘’certificate of completion and habitation’ ’to guard against building collapse, data gathering, etc, this of course could be prone to abuse but honourable minister be assured that there is a way to go about.
- Protecting and compensating the buyers and the tenants from any fraud or breach of contract by the real estate companies.
- recommend some sort of subsidy regime in the affordable housing market. etc.
The Nigerian housing sector is a vital and vibrant sector that contributes immensely to the economic and social development of the country. However, it is also a sector that is prone to fraud and abuse, which could undermine its potential and performance.
In conclusion, it is imperative that all the stakeholders, including the retirees, the real estate companies, the pension system, the government, and the public, work together to ensure that the sector is run with integrity, efficiency, and fairness. Only then can the dream of owning a home become a reality for many Nigerians.