What Does Development Fee Mean In Nigeria Real Estate
In real estate development, one of the major fees required to pay by an investor aside the property fee is the Development Fee. This development fee is part of the statutory fee an investor is required to pay apart from survey and documentation fee.
When clients meet with us at GLE Properties, one of the questions they ask is; “Hope there are no hidden charges”
What is a Development Fee?
A development fee in the Nigerian real estate context is a levy imposed to cover the cost of infrastructural amenities
If you’re buying land in any estate there are three extra fees aside the cost of the land that you will be required to pay. And they are always clearly stated in the terms and conditions of sale (in some case, contract of sale) that you are required to read and sign before your application will be processed, therefore these charges are not hidden. Two of them, Survey fee and Deed of Assignment fee are what we refer to as “statutory charge”.
Understanding development fees in real estate transactions is very important. Development fee can be paid separately and some companies include it in the cost of the property you are buying.
A development fee in the Nigerian real estate context is a levy imposed to cover the cost of infrastructural amenities
The amount you pay for development fees can vary. In some instance, it may be a fixed amount based on the type of property or its location and other times, you are required to pay 5% to 10% of the property value.
3 Things Development Fee is used for in Real Estate
1. Earth Road
Earth roads are important because they increase the estates accessibility and motorability potential. Roads in an estate potentially increasing its desirability and value, especially if it connects to a wider network of roads. Yet, they come with their own challenges, such as damage to vehicles and increased maintenance costs.
2. Security
As a real estate investor, one of the things your development fee covers is maximum security by the estate management. In this case, the estate developers build a gate house that would later house security professionals when the estate becomes habitable.
3. Drainage System
A drainage system is important in ensuring proper water management within the facility, especially during heavy rain. Your fee covers this as well.
4. Street Lightning
Having street lights in an estate is very non-negotiable and one the major a standard estate must have. Developers charge development fee to cover the installation of electrical systems. As well as connection to national grid.
Why is Development Fee in Real Estate Important?
Development Fee in Real Estate is important because it ensures the safety of your parcel. This fee ensure that your project is secure and livable.
Also, development fee allows to avoid paying for infrastructure upgrades later in the future when you finally move.
Ultimately, the Development Fee Real Estate is an investment in quality, efficiency, and project success, that benefits you and the community at large.
Conclusion
Knowing what the development fee you are asked to pay covers and how it is calculated helps you understand what you are getting into and the viability of the property when making a purchase of property in Nigeria.
Are you interested in getting affordable valuable properties in Epe, Ajah, Lekki, Ibeju-Lekki, Lagos or anywhere in Nigeria? Reach out to Timothy Moyofola on +234 806 400 3456 or send an email to support@godslandempire.com. We are ever ready to assist you on your property ownership journey in Nigeria.