7 Steps to Vet Property Developers before Investing in Nigeria

Thinking of investing in Nigerian real estate?
Before you sign that deal, how well do you really know the developer? Nigeria’s booming property market has created exciting opportunities, but it has also attracted fraudulent players and half-finished projects that trap unsuspecting investors.

For many, especially Nigerians in the diaspora, the challenge lies in separating credible developers from impostors. This article provides a practical, step-by-step guide to vetting property developers before committing funds, helping you verify credentials, confirm legal documents, and invest with confidence in a trustworthy project.

Why Vetting Property Developers Is Crucial

Vetting property developers before investing in Nigeria is essential because, while the real estate market offers high returns, it also operates within a complex system that often lacks transparency.

Fraud, legal disputes, and regulatory non-compliance are common issues that can lead to serious financial loss, project abandonment, or even the complete forfeiture of your investment.

Thorough due diligence ultimately safeguards your investment, ensuring you’re dealing with credible developers capable of delivering both legally and structurally sound projects.

Step-by-Step Guide to Vetting Property Developers

Vetting a property developer goes beyond casual background checks — it’s a structured due diligence process that examines their legal status, financial strength, project history, and ethical standards.

Step 1: Confirm Legal Registration

The first step is verifying that the developer is a legally recognized entity.

Check Corporate Affairs Commission (CAC) registration: Use the CAC online portal to confirm the company’s registration number, incorporation date, and directors. This confirms that the business is duly registered under Nigerian law.

Confirm Tax Identification Number (TIN): A legitimate developer should have a TIN issued by the Federal Inland Revenue Service (FIRS). The absence of one could indicate non-compliance with national tax laws.

Cross-check ownership details: Review the listed directors and shareholders to ensure transparency. You can also search their names for any prior legal or financial controversies.

Step 2: Verify Past Projects and Track Record

A developer’s history says more about their credibility than any marketing brochure.

Visit completed projects: Inspect previous estates or developments to confirm they actually exist and meet quality standards.

Ask for client references: Contact past buyers to learn about their experience with the developer, including communication, delivery timelines, and after-sales support.

Evaluate project timelines: Check if past projects were completed on schedule. Consistent delays may signal financial or operational weaknesses.

Research online presence: Authentic developers usually maintain active websites, verified social media profiles, and traceable office addresses.

Step 3: Validate Land Titles and Approvals

Title verification is one of the most critical aspects of due diligence in Nigerian real estate.

Request title documents: Always ask to see original or certified copies of the property’s Certificate of Occupancy (C of O), Governor’s Consent, or Registered Deed of Assignment.

Confirm with the land registry: Engage a licensed property lawyer to verify the title’s authenticity and ensure there are no multiple claims, encumbrances, or disputes.

Check development approvals: For new estates, verify that building and layout plans have been approved by the relevant urban planning authorities.

Investigate land ownership: Confirm that the land is not under government acquisition or community dispute, which could result in demolition or confiscation.

Step 4: Assess Financial Stability

A developer’s financial health directly affects their ability to complete projects.

Ask about funding sources: Developers with bank partnerships, mortgage institutions, or cooperative backing are generally more stable than those relying solely on deposits from buyers.

Look for audited statements: While not always public, reputable developers are often willing to share financial summaries or references from financial institutions.

Review the scale of operations: Sudden large-scale projects from previously unknown developers can signal overextension and high risk.

Step 5: Examine Reputation and Industry Standing

A developer’s reputation reflects their standing in the real estate community.

Membership in professional bodies: Check if the company belongs to recognized associations such as the Real Estate Developers Association of Nigeria (REDAN) or the Nigerian Institution of Estate Surveyors and Valuers (NIESV).

Press coverage and recognition: Awards, partnerships, or verified press mentions can indicate credibility and professional recognition.

Online reviews: Search for feedback from buyers or tenants on Google and social media. Consistent negative feedback or unresponsiveness to complaints is a warning sign.

Step 6: Inspect Legal and Ethical Practices

Every legitimate developer should operate with transparency and fairness.

Review the contract thoroughly: Ensure all agreements clearly outline project timelines, refund terms, and penalties for delays or non-delivery.

Engage your own lawyer: Never sign a contract prepared solely by the developer’s team. Independent legal review protects your interests.

Watch for red flags: Be wary of developers who avoid documentation, pressure you for full payment upfront, or insist on verbal agreements.

Step 7: Use Technology for Verification

Modern tools make due diligence faster and more reliable.

Government platforms: Use the CAC portal for company registration checks and NIMC for identity verification.

Escrow systems: Consider using escrow services where your funds are released only after specific milestones are met.

Verified property platforms: Leverage credible proptech platforms that list only verified developers and properties.

Special Considerations for Diaspora Investors

Vetting property developers from abroad comes with unique challenges. While the due diligence steps remain the same, distance, limited access to local information, and reliance on intermediaries often make proper verification more complex and riskier for diaspora investors.

Limited Access to On-Ground Verification: Diaspora investors rarely have the luxury of visiting a site or verifying a developer’s office in person. This makes it easy for scammers to stage-manage photos, forge documents, or misrepresent project progress. To bridge this gap, work with independent inspection firms or legal representatives who can physically visit sites, verify titles, and confirm development status.

Overreliance on Informal Networks: Many investors depend on relatives or friends for property verification. While convenient, this often leads to emotional bias or incomplete due diligence. Always complement personal connections with professional validation through lawyers, registered surveyors, or verified property platforms like ATEOS Homes & Properties Ltd.

Currency and Payment Risks: Foreign payments sent directly to unverified developers can be difficult to trace or recover. Use escrow accounts or international payment channels that require confirmation of receipt and documentation before funds are released. This adds accountability and minimizes fraud risk.

Legal and Regulatory Unfamiliarity: Diaspora investors may not fully understand Nigerian real estate laws, such as the Land Use Act, Governor’s Consent, or building approvals. Having a trusted local lawyer ensures these requirements are met and protects you from signing unenforceable contracts.

Distance magnifies every small oversight. Combining technology, verified professionals, and structured oversight helps diaspora investors overcome these barriers and invest confidently in Nigerian real estate.

In Conclusion

Investing in Nigerian real estate can be highly rewarding, but it carries inherent risks, especially for diaspora investors. Thorough vetting of property developers is the key to protecting your investment, ensuring legal compliance, and securing a project that delivers on its promises.

By confirming registration, verifying past projects, checking land titles, assessing financial stability, and monitoring ethical practices, you significantly reduce the risk of loss. Diaspora investors should also leverage trusted lawyers, escrow accounts, and independent inspections to overcome distance-related challenges.

Remember, due diligence is far less costly than recovering lost funds.