By Mashe Umaru Gwamna
An Estate Surveyor and Valuer ESV Francis Kamen said there are proffering solution to the challenges of installment and part payment in the sale and letting real estate property in Abuja .
She stated this in Abuja, yesterday.
ESV. Kamen explained that “Installment or part payment is an arrangement whereby the payment of an agreed sum for goods and services in a transaction is split into smaller units to allow easy payment within an agreed period of time”.
According to he; “In real estate transactions, such arrangement may be allowed where there is pressure on the realtor from either the property owner for need of liquid money or from the person in need of the property because of insufficient fund at the moment but with high hope of raising the balance sum in a short future or stipulated time”.
She noted that real estate transactions, either in form of sales, lease, letting are always capital intensive. “Accommodation is one of the basic physiological needs of a man as propound by Abraham Maslow in his motivational theory of hierarchy of needs. Everyone needs accommodation and landed property for personal use, store of wealth or even for investment or prospective purposes.
“So the demand for real property is so extensive either for religious purpose, recreation, commercial, residential, hospitality , institutional or multi functional purposes, the list is endless.
“In fact real property is the focal point on which other economic factors of production revolve”, she stated.
Speaking further, the Estate Surveyor, maintained that,”Due to the peculiar nature of real property market, despite the high level of demand, Sometimes, it may not be that easy getting a willing buyer or prospective tenant who has the bulk sum to pay for the prospective property at once.
“ And due to pressure from either sides and sometimes fears from the agent not to lose fees or the available client, the agent may succumb to the option of accepting and convincing the client for installment payment”,she added.
Giving more insight on installment payment, she emphasized that, it is not a bad idea on its own but care must be taken while engaging on such arrangement due to the inherent risk involved .
She stated that there are risks involved in installment/ part payment.
She mentioned the in ability to meet up with future installment payment and may be unwillingness of the owner to refund the advance payment where by hanging the transaction for a every long time than expected in the case of sales and some time ending up on litigations.
“As a property consultant or agent, when this occurs, you may end up losing your client, the property and even your fees”.
Also, the risk of death , incapacitation of the prospective buyer or tenant.
Whereby any of these occur, the payment of the future installment will be affected and the transaction hangs.
“One of the best ways to avert the risk of not meeting up with the subsequent installment payment is to clearly/ specifically spelt out in the agreement that post dated cheques with the values of the subsequent payments be issued and handed over to the property owner or his agent to be presented to the bank without any notice or pre information to the issuer before presentation.
“That assures security to the subsequent installment payment , as the issuer is aware of the criminality of his failure to redeem an issued cheque. Whereby the cheques bounce, it becomes a case between the issuer and the nation or constituted authorities.
“The defaulter will be prosecuted the moment the case is reported and evidence provided to confirm that he really issued the cheque and it bounces on presentation to the bank,”she said.
She said other ways to avert default in subsequent payments of the installment balance is to request for collateral of a property or asset higher in value than the subsequent installment balance to be surrendered and agreement reached for forfeiture of such property par-adventure he defaults.
While citing an case study of a sale of transactions client’s fenced land in FHA Lugbe, saying that the land belongs to a client of mine which I was briefed to sale in FHA Lugbe and it attracted the interest of prospective buyer who accepted the offered price and promised a down payment of about 20% of the total sum with the agreement of paying the balance within 3 days or a week.
However, proper care was not taken to commit the prospective buyer who paid the first installment with the promise of offsetting the balance in less than a month.
“ My client was convinced in accepting the part payment with the hope of receiving the balance payment in days, weeks or less than a month.
“Unfortunately, the prospective buyer could not meet up in the first month, first year and even the third year. Letters were written and much meetings and negotiations /renegotiation was done but all to no avail”,.
She noted that this ugly situation could have avoided had we taken one of the above suggested approach to avert the risk of defaulting in the installment balance payment
