In the Nigerian property market, glossy marketing brochures and hyper-realistic 3D renders are designed to produce an emotional reaction. They showcase manicured lawns, Olympic-sized swimming pools, and gleaming floor-to-ceiling glass facades.
Amateur buyers ask questions about finishes: “What brand of kitchen cabinets are you installing?” or “Can I choose my bathroom tiles?”
Institutional investors ask structural and financial questions. They understand that before a property can deliver a return, the developer’s legal standing, capital foundation, and execution capacity must be airtight.
Before wiring a commitment deposit for any off-plan or newly built development in Lagos or Abuja, demand written, verifiable answers to these five non-negotiable questions.
1. “Can you provide the LASPPPA Planning Permit Number and the LASBCA Stage Certification?”
In Lagos, having an architectural drawing does not give a developer the right to build.
- The Regulatory Mandate: A developer must hold an approved physical planning permit from the Lagos State Physical Planning Permit Authority (LASPPPA). Furthermore, under the updated Lagos State Building Control Agency (LASBCA) framework, construction must be inspected and certified at critical intervals—substructure, first floor, roof level, and practical completion.
- The Risk: If a developer breaks ground without these statutory approvals, the site is liable to receive stop-work seals, heavy regularisation penalties, or outright demolition. Never accept: “The approvals are currently in process.” Demand the physical permit number and have your attorney verify it directly with the Ministry of Physical Planning.
2. “What is the capital structure funding this project?”
The single greatest cause of abandoned construction sites across the Lekki-Epe corridor is developer insolvency.
- The Financial Reality: Ask the developer directly: Is this project 100% dependent on off-plan buyer subscriptions to pay the contractor, or do you have committed institutional project financing?
- The Red Flag: If a developer relies solely on incoming buyer deposits to purchase rebar and cement, any macroeconomic shock—such as an unexpected hike in material prices or a slowdown in off-plan sales—will bring the cranes to a halt. Partner with developers who back their projects with confirmed bank credit lines, private equity equity pools, or substantial balance-sheet reserves.
3. “Where is the underlying title registered, and what is the exact root of title?”
A company registration with the Corporate Affairs Commission (CAC) does not mean a developer owns the land they are building on.
- The Legal Search: Demand the specific registration details of the land: the Certificate of Occupancy (C of O) number, the Gazette volume and page, or the registered Governor’s Consent number.
- The Chain of Title: Ensure the developer is either the registered owner on that title or holds a valid, registered Power of Attorney and a properly structured Joint Venture Agreement (JVA) with the original landowner. If the land is held under an unregistered “Family Receipt” or an “Excision in Progress,” your capital is exposed to catastrophic land disputes.
4. “How does the Sales and Purchase Agreement (SPA) treat material price volatility and liquidated damages?”
In high-inflation environments, vague contracts lead to expensive disputes.
- Price Escalation Clauses: Examine the contract’s adjustment terms. Does the developer reserve the unilateral right to increase the purchase price mid-construction due to inflation? An institutional contract must either feature a fixed-price guarantee or define an explicit cap on price adjustments tied to independent cost indices.
- Liquidated Damages: What happens if the developer misses the projected delivery date? The contract must contain clear, enforceable penalty clauses—liquidated damages paid to you monthly or quarterly for delays beyond the standard contractual grace period (typically 90 days). If the developer refuses to include delay penalties, they lack confidence in their own delivery schedule.
5. “What is the structure of the post-handover Facility Management and the Sinking Fund?”
A luxury development is an operational ecosystem. Once the units are delivered, the long-term value of your asset rests entirely on ongoing management.
- The Operational Blueprint: Who will manage the estate? Is it a recognized, third-party facility management firm operating under a binding Service Level Agreement (SLA), or an ad-hoc in-house team?
- The Capital Reserve: How is the Sinking Fund calculated? A credible developer establishes a segregated capital reserve from day one to fund long-term asset depreciations—such as central power generator overhauls, transformer replacements, and water treatment plant membranes. Without a structured sinking fund, service charges will fluctuate wildly, triggering maintenance failures that depress rental yields.
Scrutinize before you subscribe. At Nexora Homes, we execute this forensic interrogation on every developer before their project enters our private client portfolio.