Real Estate And Special Control Unit Against Money laundering (SCUML): Procedure For Obtaining Redan License

By Babayemi Olaniyan Esq

INTRODUCTION

This paper will focus majorly on what a real estate developer will need to aver his/her mind to in ensuring a smooth run in its operations especially as to a key license to acquire before applying for the special control unit against money laundering (SCUML) certificate. The phrase Real Estate has become very popular in typical settings, especially in Nigeria. To the average Nigerian, when Real Estate is mentioned, regard is given to owning property or a large expanse of land which can be let out, leased, or sold in units.

Real estate is the land along with any permanent improvements attached to the land, whether natural or man-made—including water, trees, minerals, buildings, homes, fences, and bridges. Real estate is a form of real property. It differs from personal property, which are things not permanently attached to the land, such as vehicles, boats, jewelry, furniture, and farm equipment.[1]

The real estate industry in Nigeria has grown so well that it’s a major form of investment in Nigeria. A lot of investors are willing to sink millions and billions into financing these projects because of the high need for houses and the eventual high-interest rate return. A lot of companies both new and old include the business of real estate as part of their objects whether or not they were carrying on that particular business at inception and of course, it is because the business is lucrative.

To regulate the industry, an association called the Real Estate Developers Association of Nigeria (REDAN) was established in 2002. The Real Estate Developers Association of Nigeria (REDAN) is the principal association and umbrella body of the organized private sector (public and private) responsible for housing development in Nigeria, having been conferred with official recognition by the Federal Government of Nigeria since November 2002.[2] The association is primarily concerned with the regulation of the real estate industry in Nigeria. Primarily, the association is for corporate entities and professionals in the built industry.

Due to the high investment inflow into the industry, it also became expedient to properly advise and regulate the inflow of funds and ensure that funds were not being laundered through this investment medium among other sectors like oil & gas, audits firms, brokers, consultants, super markets, etc. To this end, a special control unit against money laundering (SCUML) was created with the mandate to checkmate this menace of money laundering as well as sensitize members of the public.

Recently, SCUML released guidelines for companies that desire to obtain its certificate which is now a prerequisite for opening some corporate bank accounts. download

The only exceptions are Law Firms and this is premised on the judgment delivered by both the Federal High Court & Court of Appeal[3]

HOW TO OBTAIN REDAN LICENSE

To venture into the real estate business and thrive therein, one needs to obtain a license called the Real Estate developer’s license.

This work will run through the process of obtaining same.

1. A written application
2. Attach CAC registration documents
3. Audited accounts for 3 years
4. Detailed company profile
5. Project brochures
6. Bank reference/letter of introduction
7. Bank Cheque for registration and subscription fees
8. Tax Clearance certificate
9. Evidence of National Housing Fund Contribution
10. Photo identification of major shareholders and directors
11. Execution of REDAN membership code of conduct form.
12. Pick up relevant forms

The fees are:

1. Application fee- 10,000
2. Registration fee- 100,000
3. Development levy-140,000
4. Annual subscription- 100,000

CONCLUSION

Once a company can comply with the above, it will receive its certificate of registration with REDAN and will be able to register and obtain its SCUML certificate. This in turn will enable the company to open and run bank account in Nigeria. New companies must ensure that they comply with this requirement before applying for a SCUML certificate if its business objects contain any real estate related clause.

Lehi Attorneys is a full-service Intermediary law firm with a strong focus on helping clients to deliver on their task by rendering legal services in various jurisdictions. We have been able to carve out a niche by giving adequate advice in the commercial sector: Intellectual property, real estate, trade law & policy, corporate law, health & pharmaceuticals, technology, media & entertainment.  Further information about the firm is available at www.lehiattorneys.org. 

Disclaimer: This is a publication of Lehi Attorneys and is for general information only. It should not be construed as legal advice under any circumstances.

Babayemi Olaniyan Esq, ACIS, Lead Partner- Lehi Attorneys, Yemi.olaniyan@lehiattorneys.org, +234-813-469-9398

[1] https://www.investopedia.com/terms/r/realestate.asp ( accessed on 19/4/2021)

[2] https://redanonline.org.ng/ ( accessed on 19/4/2021)

[3] Registered Trustees of Nigerian Bar Association v. AGF & CBN ( Suit No: FHC/BS/173/2014, CBN v. NBA & AGF (CA/A/202/2015)