THE POLYTECHNIC, IBADAN.

FACULTY OF ENVIRONMENTAL STUDIES.

DEPARTMENT OF ESTATE MANAGEMENT.
STUDENTS INDUSTRIAL WORK EXPERIENCE SCHEME
(SIWES)
A REPORT OF WORK DONE AT
IKORODU LOCAL GOVERNMNENT , TOS BENSON
STREET, BEACH ROAD,EBUTE,IKORODU,LAGOS.

PRESENTED BY
AGBAJE OLAYINKA ISMAIL
MATRIC NO: 2014070304040

IN PARTIAL FUFILMEMT OF THE INDUSTRIAL

TRAINING REQUIREMENT FOR AWARD
OF THE NATIONAL DIPLOAMA (ND)
IN
ESTATE MANAGEMENT.
22TH JANUARY 2016

DEDICATION
To the Almighty Allah.

ACKNOWLEDGEMENT
To the God Almighty for his guidance.
My special thanks go to my parent Mr and Mrs Agbaje
for their support during my siwes program. I pray you live
long to reap the fruits of your labours.
I will also be forever grateful to the director Engineer
Gbenga Oke and the rest for granting me the opportunity to
observe my industrial attachment in their company.

CERTIFICATION
This is to certify that this piece of work is done and
submitted by me.

______________________

TABLE OF CONTENT
CHAPTER 1
INTRODUCTION
OBJECTIVE OF SIWES
CHAPTER 2
FIRM CHART
INTRODUCTION
METHODS OF VALUATION
CHAPTER 3
CHALLENGES FACING NIESV AND ESVARBON
CHAPTER 4
RECOMMENDATIONS AND CONCLUDING REMARKS

CHAPTER 1
INTRODUCTION OF SIWES
The students Industrial Work Experience Scheme (SIWES)
is mandatory program that is observe by student of
tertiary institution.
It is aim at exposing the student to machine and
equipment, professional work methods and bridging the
gap existing between theory and practice. The scheme is
a tripartite programme, involving the students, the
polytechnic and the industry.

OBJECTIVES OF SlWES
i) it help student to acquire pratical aspect of their various field of study,
ii) Prepare students for the work situation they are likely to meet after
graduation

FIRM CHART

________________________________________________

VALUATION
DEAPARTMENT

SALES &PURCHASE
MANAGEMENT

LETTING
DEPARTMENT

INTRODUCTION
Thus valuation is the art and science of estimating the value of property
at a particular point in time and for a particular purpose. Valuation is
scientific in terms of purpose but an art in terms of its execution. Like an
art, valuation keeps taking on new forms with the advancement in years
and with the implication that the valuer must realized the need to break
from his confinement and follow a path most suitable for the
achievement of a realistic value opinion. The valuation of real estate is
much like mystery, and as such, requires vital clues which are obtainable
from appropriate data/information gathering methodology, unlike other
markets; data are not easily available for processing into value estimates
in a property market, therefore, it takes the valuer some reasonable
mental effort to be able to wade through the maze of information
provided by his client cum the field data personally obtained and his
professional acumen to be able to appropriately and un-partially
analyse those information/field data before arriving at his valuation
opinion.
Since the essential inputs of the valuers computations are affected by his
own ability to research and analyse, there is the need for him to be very
extensive in data collection in order to acquire a very strong and
articulate background against which he will make his presentations.
Although, the aim of the valuer is to provide an estimate value, it should
not be assumed that the valuers estimate of value and the market price
or market value will be the same. Different valuers could well place
different values on a particular interest at a particular time because they
are making estimates and there is normally room for this difference in
the individual valuers estimate but usually within certain reasonable
limits.
OBJECTIVES
The objectives of this unit are:
Examine the methods of valuation
Appropriateness of each method for valuation.

Methods of valuation
Method of valuation can be defined as various calculations,
computations or assessments which as experienced valuer adopts in
arriving at his valuation opinion. Hence, methods of valuation vary and
it is only a highly skilled valuer that can rightly adopt the appropriate
method to satisfy the basis of value which he may have already
identified.
Generally, there are five methods that can be adopted when carrying
out a valuation exercise
1 Comparative method
2 Investment method
3 Contractors method
4 Profit/account method
5 Residual method
The three basic traditional methods are: comparative,
investment and contractors. Profit and residual are
derivatives of the three basic methods.
Comparative method:
This method is predicted on sales data. This tends to reflect what willing,
knowledgeable and un-coerced sellers and buyers would agree upon as
the price. This approach estimates market value by comparing
sales prices of recent transactions involving similar properties. The
comparable sales method postulate that the monetary value of an asset
can be determined by comparison of that asset with other assets of
similar nature which have been recently sold or exchanged in the same
market or offered for sale in a similar market. ALSO, the essential
conditions for estimating the value of real estate are knowledge of
market forces, technical knowledge of the asset being appraised and
knowledge of the purpose of the appraisal.
Investment method:

This is based on the income from the property and derives the value
from the capitalization of such income. Capitalization has been defined
as the process through which an anticipated income stream
is converted into capital value. Since investment approach involves the
capitalization of the net income after the deduction of the outgoings (e.g
rates, repairs, management fees, insurance, rent to superior landlord or
ground rent). It is applicable to property that generates income. It is
obvious that only property which produces income or capable of
producing income will permit the use of this approach. The investment
method rest on the theory that the capital value of an interest in landed
property, freehold or leasehold is directly related to the income or annual
value of the property. It follows that given the rental income or rental
value of a property, the capital value can be estimated. Annual value can
readily be established from actual rental income or from comparison of
rents of similar properties or occasionally by some other methods.
However, there are challenges of valuing varying income with
appropriate rate of capitalization and the effect of tax.

CHALLENGES FACING NIESV AND ESVARBON

ABSTRACT
Nigeria Institution of Estate Surveyors and Valuers has been in existence
for some decades. It comprises of professionals who have obtained
degrees in universities and other higher institutions offering the course
that qualifies one to be in such caliber i.e Estate Management. On the
other hand, Estate Surveyors and Valuers Registration Board on Nigeria
is a body that constitutes members of the Institution who have been
appointed to oversee the formulation of rules and regulation of the
Institution, register elected members, and so on.
This work examine the challenges facing the Institution and the Board
through the use of research in determining the confrontations the
Institution and the Board has, what causes those challenges and how
severe are the challenges to the Institution and Board. Likewise,

recommendations were made to the Board and Institution on how to

overcome the challenges.

CHALLENGES FACING NIESV AND ESVARBON

One of the challenges facing estate surveying practice in Nigeria is low
salary and high rate of unemployment. The salaries including allowances
earned by fresh graduates working in private firms in Lagos range from
N40, 000 to N60, 000 per month, whilst it is lower elsewhere in the
country. Those working in banks, oil companies, and development
companies are better off. When this amount is weighed against the cost
of living in Lagos, hardly are the workers able to have something left for
feeding and other expenses. The consequence is lack to dedication to
duties and willingness to pull out of employment immediately after
registration with the NIESV and ESVARBON. The workers are not
helping matters as they are always eager to sidetrack their employers by
handling sales or lettings without knowledge of their employers.
Leadership is another greatest challenge facing the Institution and
Board. Leadership is about working to advance the success, the
continued relevance and sustainability of ones constituency and
contributing effectively by positive examples to the improvement of the
structures and systems of ones constituency to make them better than
you find them and impacting on the community positive attitudes for the
better.
Lack of encouragement of partnership of professionals. Mr. Kunle
Elebute, said in 2009 that the practice of estate surveying and valuation
in the country was presently fragmented with over 500 registered firms
with 270 operating in Lagos alone. But currently, we have over 2,259
registered Estate Surveyors and Valuers.
The fact that the industry is highly fragmented, according to him, makes
it difficult for firms to be market makers, while the adoption of scale of
fees for the remuneration of practitioners tends to set a cap on maximum
fees that can be charged rather that a minimum level of fees. The use of

scale of fees, he added, could destroy the profession, as it would make it

difficult to differentiate firms and professionals according to size and
competences.
Giving an overview of the profession, Elebute, who is a chartered
accountant, said that other major challenges facing estate surveying
included lack of enforcement of the legislation governing it, little
recognition and awareness by members of the public, low
professionalism on the part of practicing members and invasion of the
industry by unlicensed and non-professionals that is many predators
encroaching on the profession.
There are also the educational challenges facing the profession of estate
management in contemporary Nigeria. Training of future estate
surveyors and valuers, and re-training of practicing ones have been very
challenging. There is evidence that the syllabuses adopted by some of
the higher institutions offering estate management are outdated and the
standard of the graduates is questionable. This state is corroborated by
Oloyede and Adegoke (2009) who stated that young graduates of estate
management are deficient in valuation, agency, feasibility and viability
appraisal, and property management.
It must be noted that property investment and valuation are dynamic
with issues cropping up in contemporary World. New mechanisms are
emerging on daily basis that calls for accuracy. For instance, course on
Property Marketing, Portfolio Management, Facilities Management, ICT
Certification courses have not been embraced, except in private
Universities. Little attention is paid to new technological details that are
evolving into the different units of real estate practice. The evolving of
technology round the globe pose a great work on every profession, so
there ought to be advancement in the technological aspect of the Board
and the Institution.
Considering the current state of academic and professional real estate
research and feedback from the practitioners, it is evident that there is a
very wide gully between the academic and practitioners. It appears the
two are together yet stand apart! Firms are unwilling to divulge the
simplest information on the number of lettings or sale completed over
certain period. This posed the question as to whether the two worlds of

academic and professional real estate research in Nigeria are networking

to form new and innovative hybrid approaches, or are they dividing and
moving further apart? Practitioners outside the academic circles have
criticized those in academic for not producing applications that can be
transferred to industry for investment and portfolio decision-making or
to government for policy making and administration. It is contended that
most university-based research today is targeted towards a narrow
constituency in the academic community and focused more on academic
performance indicators rather than making a contribution to industry. On
the other hand, professional real estate practitioners have been criticized
by academics for not opening up to them in terms of posing research
problems and funding such research, and lack of interest on the part of
practitioners to implement the econometric forecasting models or
innovative portfolio optimization techniques derived by them. Data on
number of letting and sale transactions, sale price of properties, and
valuation that would have assisted academics carry out research are
always treated as confidential matters.
Another challenge facing estate surveying profession in Nigeria is the
high level of disparity in opinions of values. Studies have shown that
there is great inconsistency and irrationality in opinions of values
expressed by estate valuers. This challenge arises as a result of failure to
adhere to valuation standards put in place by the Nigerian Institution of
Estate Surveyors and Valuers (NIESV) and other internationally
acceptable standards - The Uniform Standards of Professional Appraisal
Practice (USPAP), The RICS Red Book, The Appraisal Standard
Board of the Appraisal Institute of Canada (AIC); adoption of dissimilar
bases and methods of valuation, dissimilar reporting styles, clients
influence, and over-protection and non-disclosure of information on
transactions they carry out.
The challenge posed by effects of legislations cannot be ignored; one of
such is the Land Use Charge Law 2001 in Lagos State. The Land Use
Charge is a form of tax levied on property to finance public expenditure.
Its payment is based on annual capital sum payable by the owner.
Section 20 imposed penalties for delayed settlement of Land Use
Charge, the amount payable as penalty depends on the length of period

the payment was delayed. If period of delay is between 45 and 75 days

attracts 25% of the original Charge payable as penalty; between 75 to
105 days, 50%; between 106 and 135 days, 100%; after 135 days, the
property becomes liable to receivership until outstanding taxes,
penalties, and administrative charges are fully paid. The Law ignored the
source from where the Charge is to be paid, which is the rent. In this
regard, when there are problems in collecting such rent, making the
property fall into receivership after four months is highly punitive on the
owner and estate surveyors since the Charge would be afforded from the
rent.
Another legislation that poses great challenge to profession of real
surveying and valuation in Nigeria is the Economic and Financial
Crimes (EFCC) Act. Sections 17(a), (b); 18 and 24, in a nutshell, put the
onus on an estate surveyor to prove that he is not aware of concealment,
removal from jurisdiction, transfer to nominees or otherwise retains the
control of a proceed of a criminal conduct or illegal act on behalf of his
principal. It also provides that a person knowing that any property in
whole or part directly or indirectly represents another persons proceeds
of a criminal conduct and uses that property or has possession of it,
commits an offence and is liable on conviction to imprisonment for a
term not less than 5 years or fine equivalent to five times the value of the
proceeds of the criminal conduct. This implies that the estate survey
must be vigilant and investigate all instructions that they secure as illegal
monies are being diverted into real estate investment. The estate
surveyor may have to strive hard to prove that he had no knowledge of
the transaction being illegal.
Similarly, Section 5(1) of the Money Laundering (Prohibition) Act 2004
classified professionals dealing in transactions involving money into
financial and non-financial institutions. The section provides that a
designated non-financial institution dealing in cash transaction must
submit to the Federal Ministry of Commerce declaration of its activities,
including seeking information about the clients and filing of reports
about him and his financial transactions within seven days. Section 6(2)
made it mandatory for non-financial institution (to which estate
surveyors are classified) to disclose financial transactions involving

funds in excess of N1,000,000 or its equivalent (in case of individuals)

or N5,000,000 or its equivalent (in the case of body corporate). Criminal
proceedings may be instituted against the principal partner, and
employees of the firm may be charged with conspiracy, and the NIESV
may be forced by to further penalize the offender by revocation of
practice license.
In buying properties in Nigeria, the guiding doctrine is caveat emptor.
Many of the instruments of title are either cloned or forged. Many
practitioners, their clients, banks, and other financial institutions have
fallen victims of the fraud. This is a serious challenge to the practice of
estate surveying in the country. It dents image and affects the practice.
There is a cartel of fraudsters who specialize in cloning and forging title
documents supposedly in security room at the Land Registries. They
often use the forged documents to obtain loan from the financial
institutions or sell the property only to disappear thereafter. The
Governments are equally disturbed. For example, in a paid advert at
Page 32 of The Nation of Tuesday, 27th July, 2010 signed by the
Permanent Secretary, Lands Bureau, Lagos State attention of the general
public was drawn to the menace and advised that proper authentication
of all instruments of title should be carried out at the State Lands
Registry before consummating sale or lease transactions.
Another challenge facing NIESV and ESVARBON is that members
abandoned their ethical duties and responsibilities in their quest to be
rich.
RECOMMENDATIONS AND CONCLUDING REMARKS
In closing the gap between academic and professional real estate
research, there needs to be leadership and capital committed to the
process. There is the need to catch up with modern trends in real estate
education so as to compete with others across the globe. Professionals
must measure up to the latest innovations in estate management; the
conventional approaches to carrying out professional assignment have
become increasingly inadequate. There is therefore great need for estate
surveyor and valuer to update and even expand on his knowledge base
so as to participate effectively in the shape of things to come.

In the light of the prevailing challenges hindering the growth of the

industry, there is need for players to scale up operations in order to
reposition the industry, and the quickest route to achieving this is the
formation of medium sized and large partnerships with 10 to 30 partners
in a firm. A workable model is the coming together of a number of small
and medium sized firms partnering to form larger ones with the purpose
of exploiting the growth opportunities in the real estate industry. Some
of the strategies that estate surveyors and valuers may adopt to increase
income and maximize the opportunities created by shifting market
conditions are: maximizing technology and the internet to the fullest
this will include marketing on the internet and concerted effort to direct
traffic to the websites; participating in or building a team forming a
formidable team through partnership (the benefits of partnerships
include ability to determine the market, increased specialization by
partners as they would be able to actively participate in every aspect of
business as per their knowledge, skill and experience, which would
increase value delivery to clients; improved business development and
encouragement of referrals between units to enhance profitability);
training and retraining staff and adequately remunerating them
(sponsoring the pupil estate surveyors to attend MCPD, National
Conference and Seminars); direct link with academics (funding of
research projects and application of research findings).
There is need to introduce and enforce valuation standards relating to
methodology and reporting, internationalization of and mutual
recognition of professional qualifications across the globe, raising the
profile of the profession both nationally and globally, and ensuring that
professional fees are fully paid. Likewise, it is high time the institution
critically examined the provision that made it mandatory for firms to
adopt the names of their owners. This current practice is limiting their
operations and does not give room to effective practice.
Mutual Recognition will become device for facilitating efficient global
working place for surveying services. Globalization of services is a
topical issue that we require to respond to this challenge and devise the
means to ensure global free movement, so that the process reflects the
requirements of the surveyor. However, in order to work anywhere in the

world, we need to be sure that our professional qualifications will be

recognized. Until we have total freedom to practice worldwide, and that
means recognition of our qualifications by other governments,
professional bodies and by international clients, surveyors are not going
to be in a position to respond to the global challenge.
Reliable research will be carried out for benefits of stakeholders when
market-based if there are official market data freely and publicly
available, especially from practitioners. It is also necessary for such data
to be available for all types of transacted property and across all
geographical locations. To build up a sales price register (transaction
register) market should be transparent and open and stated price in
contracts has to be reliable. The NIESV Research Committee has great
role to play in this respect by collating information of properties across
the country through the existing branch network of the Institution.
There may be need for NIESV to put pressure on the Lagos State
Government and other states where laws that are injurious to the practice
of estate surveying and valuation are operating. The Land Use Charge
Law 2001 must be amended to cater for default in rent payments by
tenants.
In respect of the EFCC and Money Laundering Acts, estate surveyors
must tread cautiously in collecting cash payment for transactions
involving large sums of money. Apart from this, efforts must be made by
estate surveyors to collect information on clients involved in cash
transaction to prove that he had taken due steps to determine the clients
status, while all letters of offer and acceptance and receipts must be duly
signed by the estate surveyors and the clients. The documents must be
kept safe for many years, even for as long as their firm remains in
practice.
Finally, before buying or leasing properties in Nigeria proper search and
verification must be carried out at the Lands Registry. However,
experience has shown that such search alone will not suffice as there are
occasion of connivance of the officials of the Lands Registry in
perpetrating the fraud. There may be need to go further to do personal
search within the neighbourhood of the property and ask questions
pertaining to determine if it transaction is genuine before making

attempt to consummate it. At all times, experienced estate surveyors and

valuers must be engaged for purchase or lease of properties. A search
may actually show that the document exists at the Registry and no legal
mortgage exists but may not reveal equitable mortgage or other lien that
may adversely affect the transaction.