For many Nigerians, buying an off-plan home has often been a gamble. Prospective homeowners have paid substantial deposits for properties that were never completed, delivered years behind schedule or failed to meet promised standards.
These experiences have eroded public confidence in the real estate sector and discouraged institutional investors from financing residential developments.
The Federal Government is now seeking to change that narrative through the proposed National Housing and Built Environment Regulation Policy, which introduces escrow protection for off-plan housing transactions.

Speaking at the BusinessDay Abuja Real Estate Conference 2026, the Minister of Housing and Urban Development, Muttaqha Rabe Darma, urged stakeholders to actively shape the policy before it is presented to the Federal Executive Council (FEC).
Rather than unveiling a finished document, he described the consultation as an opportunity for industry players to contribute to a framework capable of restoring confidence in Nigeria’s housing market.
The proposal has attracted considerable attention because escrow accounts are widely regarded as one of the strongest safeguards for off-plan buyers. Under such an arrangement, purchasers’ funds remain in a protected account and are released to developers only as construction progresses.

Industry experts, however, argue that while Nigeria’s proposal reflects international best practice in principle, its success will depend on whether the framework clearly defines how the escrow system will operate
Lessons from established markets
Countries with mature off-plan housing markets treat escrow accounts as only one element of a broader accountability system.
Dubai’s Law No. 8 of 2007 requires a licensed engineering consultant to certify each construction milestone before funds are released. India’s Real Estate (Regulation and Development) Act, 2016 adopts an even stricter approach, requiring certification by an engineer, an architect and a chartered accountant before withdrawals are approved.

Malaysia’s Housing Development (Control and Licensing) Act assigns the responsibility to licensed architects.
Despite these differences, the principle remains the same: independent professionals—not developers—verify that construction has genuinely reached the stage required for payment.
The standards for certification are also clearly established before construction begins.

Dubai and India link every payment to registered construction milestones and documented project costs, ensuring that fund releases correspond with actual work completed. Malaysia prescribes the payment schedule directly in law, eliminating uncertainty over when developers can access buyers’ money.
Equally important is documentation. Dubai maintains project records through its Land Department, India publishes regular project updates on public regulatory portals, while Malaysia preserves certification records that can be relied upon during disputes. These records create transparency long after construction has ended.

Closing the verification gap

Nigeria’s draft policy already embraces escrow protection and milestone-based disbursement of funds. However, analysts believe the framework should go further by identifying who verifies construction progress, the standards that should apply and how certification records will be maintained.
Founder of Assetrica, Mayowa Adetoun believes these details will determine whether the reforms truly protect buyers.
“Every mature off-plan regime pairs the trust account with independent, licensed verification. The account governs where the money sits. The verifier governs whether the release is warranted,” he said.

According to Adeosun, the stakeholder consultation offers an opportunity to strengthen the framework before it becomes law.
“The Nigerian draft has addressed the escrow requirement. What remains is specifying which licensed professionals will verify construction, the standards they will apply and the records they must maintain.”

He argues that Nigeria does not need to establish entirely new institutions.
“The necessary professional bodies already exist. The framework simply needs to assign clear statutory responsibilities to them.”

More than buyer protection

Beyond safeguarding individual homeowners, experts believe the reforms could reshape housing finance in Nigeria.
Institutional investors have long identified poor project monitoring and weak verification systems as major obstacles to investing in residential developments.
According to the National Pension Commission (PenCom), pension assets under management stood at N31.48 trillion as of July, yet only a small fraction has been invested in real estate.
Analysts argue that introducing transparent verification procedures would provide institutional investors with the accountability and documentation they require before committing long-term capital to housing projects.

As Adeosun noted, “Solve the trust question at the buyer level, and you have solved it at the pension fund level. The same discipline that protects a first-time buyer is what unlocks institutional funding for developers delivering projects responsibly.”

A critical window

The ongoing stakeholder consultation provides what many consider a rare opportunity to strengthen Nigeria’s regulatory framework before it reaches the Federal Executive Council.
For industry participants, the conversation is no longer about whether escrow protection is necessary. The focus is on ensuring that the framework includes the practical safeguards needed to make it effective.

If the final policy incorporates independent verification, clear construction standards and transparent record-keeping alongside escrow protection, it could transform Nigeria’s off-plan housing market.
Such reforms would not only protect homebuyers from avoidable losses but also improve accountability, restore confidence and attract much-needed institutional investment into a sector central to addressing the country’s housing deficit.

Ultimately, the success of the reform will depend not only on where buyers’ money is kept but also on ensuring that every payment released is backed by independently verified construction progress. That assurance could become the foundation for a more transparent, credible and investment-friendly housing market in Nigeria.