When the developer owns the builder, who checks the build?

CONFIRMED REGULATORY POSITION — Lagos State Building Control Agency regulations describe construction contract documents as including professional drawings, priced bills of quantities, a construction programme, quality and safety plans, contract conditions and all-risk insurance. They also provide for notice before construction, submission of a planning permit and relevant technical documents, and inspection and stage certification. These requirements concern the work itself; they do not establish whether any particular developer's cost estimate or projected return is fair.

BLUEGATE ANALYSIS — A developer appointing its own construction company may reduce hand-off delays and align design with delivery. The same relationship creates a question financiers should ask plainly: who tests the contractor's price, certifies completed work and approves variations when the sponsor has an interest on both sides of the contract? Common ownership is not proof of a bad project. Undisclosed or unchecked common ownership is a preventable governance risk.

BEFORE A TERM SHEET — Verify the landowner's authority, title and survey; confirm the site's planning position and feasible scheme; commission an independent valuation and quantity survey; and identify the proposed contractor's registration, capacity, track record and insurance. A site area or conceptual rendering is not a final unit count, approved design or reliable construction budget.

PUT THE RELATIONSHIP ON PAPER — The development agreement should name every connected party and distinguish the land contribution, developer role, construction contract and financier rights. Specify the contractor selection rationale, agreed price basis, permitted mark-ups, variation approvals, defects liability and what happens if the contractor misses milestones or must be replaced. The financier should be able to understand both the development return and the construction margin.

CONTROL THE DRAWDOWNS — Put project receipts and payments through a dedicated account with agreed signatories and reporting. Tie construction releases to documented stages assessed by an independent architect, engineer or quantity surveyor, as appropriate. Require cost-to-complete reports, contingency tracking and evidence of statutory inspections. A site photograph or invoice alone is not independent certification.

TEST THE DOWNSIDE — Before committing capital, compare a base case with slower sales, higher construction costs, delayed approvals and a longer completion period. Record who funds overruns, whether new borrowing can dilute or outrank an investor, and the remedies if a milestone is missed. Do not mistake an illustrative projection for a promised yield.

BLUEGATE POSITION — We would present an affiliated-contractor arrangement transparently and subject it to the same independent commercial, technical and legal scrutiny as an external contractor. The investment case improves when authority, budgets, approvals, roles, reporting and exit rights can be verified independently. That is BlueGate's proposed due-diligence standard, not a claim that a particular project has passed it.

PRACTICAL TAKEAWAY — Ask for three names before advancing a development investment: who owns the land, who builds the project, and who independently verifies that the work and spending match the plan. If the last answer is unclear, the financing structure is not yet ready for a final commitment.