It can be disheartening to be informed by your real estate developer that the plot of land you just paid for can’t be allocated to you immediately. Hence, you are asked to be patient with them pending when they contact you for a physical allocation schedule. It’s a common challenge among virtually all real estate companies in Nigeria. Plot Allocations can be delayed for 6 months,8 months, or even longer.
Now, let’s look at the 5 common reasons why allocations can be delayed. The purpose is to give some clarity to first-time investors and also investors who are seasoned that delayed allocation does not necessarily mean the property is a scam but that there are other factors that mitigate against speedy allocation to clients. So let’s dive in!
1. Contention on the estate
Firstly, Some companies do not fully pay for the property before launching it into the market. The reason for this is to also guard against loss of funds in case there are issues about the property not fully investigated, or they didn’t know about. So in the process of clearing and fencing, contention on the property starts among the various parties involved. If the estate has been paid fully to the wrong party, the company will lose money. For this reason, companies negotiate installments payment as they go along. And in some cases, without full payment, the seller will not agree to the demarcation of the property, hence the delay in allocations!!
2. Delayed approval from Management
Secondly, allocation can be delayed if the layout of the entire land is not yet ready. Clearing, surveying, and demarcation of plots can take time for the management board in deciding the layout of the estate and approving funds for field operations. That is why it is best to buy from estates with already demarcated plots, so your building plan can kickstart immediately.
3. Internal conflict among the selling party
Thirdly, allocations are delayed behind the scenes because of internal issues with the community or family who sold the land. we have heard cases where a member of the seller’s family is sidelined on the deal and he makes a court case with the developer and the family. In cases like this, no physical activity can happen on that hand till the disagreement is resolved. The company is not likely to tell you that they are sorting issues. Until these problems are taken care of, allocations cannot take place. The best bet is to exercise patience because the company is taking care of issues you would otherwise encounter and they would be protecting your interests.
–
4. Too much engagement with other projects
Lastly, When a company has bitten more than it can chew in engaging in so many projects more than it can handle, they are likely to ignore some of its land causing delayed allocation. Some real estate companies in a space of 4-6 months can launch 5-6 new projects at once. This will create a challenge in the allocation, because their manpower is spread thin, and their concentration is spread. So to avoid this kind of problem, ensure you do your due diligence about a company’s past track record and activities. I’m not a fan of piling up projects upon projects. When one project is completed, then move on to another.
