By Mashe Umaru Gwamna
An Estate Surveyor and Valuer (ESV), Rosech Nzekwue said compensation is essential in real estate.
Speaking yesterday in Abuja, he explained that compensation is in two main concepts .
He said the market value and the non-market value are the major differences.
He said whatever concept that is adopted, the process is usually a counter-balancing one. “In fact, the courts had held generally, that just compensation should be paid to the dispossessed owner. This is very critical, because compensation valuation practice is becoming significant to the Estate Surveyors and Valuers.
Speaking on the basic considerations, he said
it has been argued that compensation is at the center of compulsory acquisition, and the whole essence, is to restore the dispossessed owner in a state he/she was before the acquisition, hence, the issues of immediate concern are:
• Do project affected persons accept compensation willingly/happily?
• Is it that the amount paid as compensation not adequate?
• Is it in the nature of compensation to cause conflict?
• Is it the manner it is determined?
Speaking further, he said compensation is at the heart of compulsory acquisition, or any damage done to the property rights of the affected person and the whole essence is to restore the dispossessed owner to a state it was before the acquisition or damage.
“One form of compensation is by cash, and before cash payment is made the estate surveyor and valuer will assemble all indemnity certificates, arrange passport photos of all claimants (if available) or scan all the passports collected in the field, or from the power of attorney into the printed indemnity certificates. Alternatively, he may collect the passport photos at the point of payment and affixed them to the indemnity certificates before payment.
He added that share ownership
method involves the drawing up of memorandum of understanding, properly drawn up by a lawyer and signed by the village head, principal members of the family and claimants.
“The memorandum of understanding, and other necessary documents will indicate the number of shares allocated to each claimant. In most cases, this method of payment also specify other welfare package like electricity, water, secondary school, health center to the community.
“Under land for land method, the acquiring authority (government) usually agrees to allocate alternative land to the parties who are affected by the acquisition.
“Section 33 of the Land Use Act provides for resettlement option in case of renovation of right of occupancy. The resettlement is in the form of a reasonable alternative accommodation. It is noted that where the value of any alternative accommodation is higher than the compensation payable, the excess in value shall be treated as a loan, which the person affected shall refund or repay to the Government.”
On valuation techniques, he said the basis of valuation is generally governed by the following status- Land Use Act Cap L5, Laws of Federation of Nigeria, 2004; Oil Pipelines Act Cap O7, Laws if Federation of Nigeria, 2004; Petroleum Act Cap P10, Laws of Federation of Nigeria, 2004 and Mineral and Mining Act Cap M12, Laws of Federation
“Section 30 of the Land Use Act provides that where dispute as to the amount of compensation, should be referred to the appropriate Land use and allocation committee. Dispute is always in the form of quarrel, fighting, argument, disagreement among parties.
“Dispute often arise in compensation matter and will be classified into three for the purpose of this presentation, field inspection stage, valuation stage and compensation payment stage. At the field inspection stage, the dispute ranges from boundary adjustment, ownership tussles, and appointment of multiple agents by single claimant, false claimants, speculative structures. All during valuation stage. The disputes come from the methodology to be adopted, the rates to be used, heads of claims, and the value of compensation itself. These often lead to arguments between the aggrieved parties, their agents on one hand and the acquiring authority and the appointed consultant valuer on the other hand.
“Dispute during payment stage is usually among the claimants, the agents, the estate surveyor and valuer and the acquiring company arising from the final approved compensation figures. The complied lists with attendant compensation amount usually causes rifts that may lead to rejection of compensation amount, counter claims, petition and courts case by the affected parties.
“Method adopted in most cases to resolve the conflicts can be classified into under, proactive and reactive methods. The proactive method of resolving disputes involves fostering better communication and collaboration with diverse interest groups, addressing the causes of the disputes, developing and building trust, understand and persuasion.
The reactive method involves the use of disputes resolution mechanism such as negotiation, mediation, conciliation, arbitration or litigation. The reactive method comes when the dispute has erupted and can no longer be handled in a proactive manner.”
