Smart Ways to Avoid Construction Fraud in Nigeria

Building your own house in Nigeria is a great achievement. For many people, it’s a product of years of hard work, saving money, sacrificing, and planning for the future. That’s why it’s so devastating when the contractor hired for building leaves halfway through the process. Leaving you with no projects completed or constructing you a home that starts cracking as soon as you open your suitcases.

Unfortunately, construction fraud is more prevalent than most people would expect. It doesn’t just happen to those who are careless or unaware. The smart, hardworking Nigerians have been hoodwinked and deceived too just because they didn’t know what to look out for. Fortunately, if you have the right information, you can avoid being one of them.

Why Construction Scams Are So Common in Nigeria 

Let’s first explore why they happen so frequently. The construction industry in Nigeria is booming. The country is seeing an increase in the number of homes, shops, offices, and investment properties. This is the good news for the real professionals. It is, although, bad news for those seeking easy money by unscrupulous methods.

A lack of regulation, little accountability for unqualified contractors, financial bottom line pressures for shortcuts, and clients who may not grasp construction technicalities are a recipe for fraud. This shouldn’t deter you from building. It only ought to make you extra careful and better prepared.

The construction industry is a prime target for scams, and there are a variety of types to be aware of.

Construction Scams You Should Know About 

There are many common types of scam. Having knowledge about them is the best way to avoid it. One of them is the unregistered or unqualified contractor. These individuals will offer you great results at a very low cost. They take an advance payment. They begin the project and either go off the radar completely or Having work done that is so bad that it can’t be fixed at a lower cost than if it were done in the first place. When the price of anything seems too good to be true, there most likely is a reason.

One of the other common problems is overbilling and hidden fees. Some contractors overestimate the amount of materials required. They overbill for work not done. They also add on additional charges that were never agreed upon at the outset. When it’s hard to understand what you are paying for, you should be worried.

The problem of fake or substandard building materials is also there. A contractor can also give an estimate for high-quality cement, reinforcement rods, roofing sheets, or electrical cables but purchase lower-quality ones and pocket the savings. Initially, it all might seem well. The serious issues typically do not appear for months or even years and may become costly or even hazardous.

Another big problem that frequently occurs prior to construction starting is land-related scams. Others purchase land with forged documents, a fake certificate of occupancy, or from a person who does not own the land. Think you’ve built your dream home, only to have someone come along with valid paperwork. Believe it or not, it does occur more than you would expect!

Warning Signs You Should Never Ignore 

There are some warning signs to look out for, whether you are hiring a contractor or already have one.

Take a closer look if one of the quotes is significantly lower than all the other quotes you have received. Low prices are a common tactic employed by many scammers. After the project has been launched, and you are 100% invested, they begin to charge you more or take a complete departure.

Another red flag is a contractor that will not offer references, pictures of their completed work, or registration. A true professional won’t hesitate to provide proof of past work if asked to do so as he or she is likely to be proud of their accomplishments.

Beware of any person asking for payment in full or for a large initial deposit prior to work commencing. Milestone payments are generally preferred by most reputable contractors: they get paid out after the project has been done at various stages. If someone is adamant on taking all the money at once, they certainly warrant additional attention.

And then there’s the issue of contracts. Any contractor that refuses to sign a written contract or refuses to discuss paperwork is a big red flag. If someone is not happy to have things written down, ask yourself why.

How to Protect Yourself

Fortunately, construction fraud can be avoided with the proper steps taken from the start.

The first thing to do is conduct proper background checks. Request references and call them to verify. When possible, see projects worked on by the contractor. Another method to confirm business registration is at the Corporate Affairs Commission (CAC). A better option is to look for contractors that are members of professional organizations. Organizations like the Council of Registered Builders of Nigeria (CORBON). Also the Nigerian Institute of Building (NIOB). Membership in such organizations generally implies they should conform to the standards of a profession.

Never accept an oral contract. Don’t settle for anything less than this. The scope of work, the type of materials used, the project schedule, and payment terms, as well as conflict resolution, should be clearly outlined in the agreement. If a contractor is not comfortable in signing a proper contract, then take heed.

Ensure that all land documents are checked prior to construction commencing. Verify that documents like the CofO are authentic from the state land registry. Even if the seller seems trustworthy, don’t skip this step.

Make use of milestone payments rather than paying all at once. The payments may be linked to the completion of the foundation. The block construction, roofing and finishing phases, for instance. This will ensure that the contractor has a personal interest in their work. This makes them more responsible. It also limits your financial liability if it does not go as planned.

Also, it is significant to be actively engaged in the project. Regularly go to the site and focus on the quality of materials being employed. If technical knowledge of construction is not available, engage an independent architect. You can also employ an engineer or project manager to oversee the construction process. Professional fees tend to be inexpensive relative to what you might lose if you are defrauded or your job isn’t done properly.

Last but not least, steer clear of cash payments. Bank transfers give a clear record of transactions and can be beneficial should any future disputes occur. It is very difficult to substantiate cash payments.

Final Thoughts

The construction of a house in Nigeria requires more than finances. Patience, attention and a certain degree of caution are also needed. Those who defraud clients are not always easy to identify. They are confident, friendly, and persuasive and know just how to win your trust in many cases.

To protect yourself, you should take full precautions before hiring. Insist on having a solid written contract. Also keep payment in stages, and closely supervise the project until it’s finished. All these steps are not difficult to take, but all of them are important.

You don’t want your building project to be a venue for scams. Be informed, be involved and safeguard your investment at every turn.