guide on how to buy property in Nigeria
Benjamin Isiekwu Article Picture

Author:
Benjamin Chukwuemeke Isiekwu
Founding Partner
Black Rex Partners

Guide on How To Buy Property [Land Or House] In Nigeria

Most Citizens and Residents of Nigeria as well as Nigerians in diaspora desire to own Property but do not know how to go about the process. Property could be an undeveloped Land / bare Land; or a Developed Land [as in a House or Residential Apartment or an Industrial or Commercial Building]. Land in Nigeria is regulated by several laws and these include: the Land Use Act; the Constitution of the Federal Republic of Nigeria; the Conveyancing Act [applicable in North and South of Nigeria except Abia and Rivers States]; Property and Conveyancing Laws [applicable in former western Region of Nigeria and some parts of Lagos State]; Registration of Titles Law [applicable in some part of Lagos; Lagos old colonies; Victoria Island, Jibowu, Ikoyi, Yaba and parts of Mushin]; Companies and Allied Matters Act; Stamp Duties Act, etc.

The Land Use Act vests land title in each State's Governor, to be held in trust and administered for the use and common benefit of Nigerians. Further, it limits rights in land to Statutory Right of Occupancy granted by the State Governor and Customary Right of Occupancy granted by the local government. The Nigerian Constitution provides legal basis for Property acquisition and ownership. Section 43 of the 1999 Constitution of the Federal Republic of Nigeria provides that every Citizen shall have the right to own immovable property anywhere in Nigeria. Acquiring and owning a Property is a good way to leave a legacy for family members by way of inheritance. However, acquiring a Property in Nigeria is a time and capital intensive project. Hence a Buyer needs to understand the process and have a clear objective in mind.

On Property transactions, the legal maxim is apt: Caveat Emptor - Buyers Beware. It is not for a Seller to beware. A Buyer needs to exercise full caution and due diligence when buying a property. Here are basic guides on how to proceed. Strict adherence to the tips in this Guide would ensure things do not go wrong and hence there would be no exposure to risks.

  1. Identify the objectives.
  2. Conduct a physical inspection of the property.
  3. Hireprofessionals to conduct a property search.
  4. Documentation and payments.
  5. Take possession.
  6. Processing of governors consent registration of documents with the State Government.

1. IDENTIFY THE OBJECTIVES
Identify the objectives for making a property acquisition is key. This will determine the location, type, budget and other specifications of the property. Without a clear objective or goal in mind, a potential buyer is prone to have difficulties making any acquisition or investment as the property market is saturated with lots of offers. Having clarity of mind and focus is vital.

2. CONDUCT A PHYSICAL INSPECTION OF THE PROPERTY
When a Buyer finds a property that seems to meet his or her identified objectives, a physical inspection of the property is needed to ascertain that it is exactly as described. Physical inspection reveals things otherwise hidden about the physical condition and state of the property. In a situation where a Buyer is resident outside Nigeria, he or she can simply send a trusted family member or friend to help conduct a physical inspection of the property and make verifications of the suitability based on the identified objectives of the Buyer.

3. HIRE PROFESSIONALS TO CONDUCT A PROPERTY SEARCH
Once the physical inspection of the property is done, request should be made for the Documents of the property. The Documents are required to conduct a property search. Documents may include Certificate of Occupancy, Deed of Assignment / Conveyance / Sub-Lease, Survey Plan, Registered Title, Court Vesting Order, and the likes.

A prospective Buyer must ask questions. Questions like: Who is the owner of the property? Who is selling the property? If the person selling the property is not the Owner of the property, there is need for the Seller to present a Letter of Authority or a Power of Attorney from the Owner empowering the Seller to act. A Seller may be authorized to sell by grant of Probate or Letters of Administration where the Owner of the estate or property is deceased. Whose name appears in the documents? Is it the current Owner or the previous Owner? Where it is the name of the previous Owner, the current Owner has to undertake to perfect his or her title and secure Governors Consent to enable the prospective Buyer perfects his or her own title without incurring additional costs in form of payment for double consenting otherwise, the current Owner who has not registered his or her title has to ensure the previous owner executes the Deed of Assignment and other relevant documents incidental to perfection of title for the prospective Buyer. What liabilities currently exist on the property?

There is no easy way to determine all these queries. Hence, before a prospective Buyer makes purchase of a property, a Lawyer should be engaged. The cost of conducting a thorough search on a property is far too low in comparison to the safety and security it affords. As easy and simple as it looks, purchasing a property is very complex and has its technical sides. Hence even this guide cannot explore all the endless possibilities a property acquisition scenario may present. A Buyer must hire a good Lawyer with experience in Land and property transactions who would advise and see to it that all due process is observed. Beyond identifying who owns and is selling it is important to determine that the property has a good root of title. Different properties require different forms of search based on the nature of the property and the peculiarities it has. Hence a search may be conducted in any of the ways discussed below.

1. Physically on the property: The essence is to confirm actual size and dimensions as stated in the Title Documents with the reality on ground; make general enquiries from residents in the neighborhood of the property; etc.

2. By Charting of the property: This is done by engaging the services of a Registered Surveyor. The Registered Surveyor has to use a GPS device to pick the coordinates of the property, then chart the land based on the coordinates and then make a Chart Report. It is very important that the coordinates are gotten physically from the property with use of the GPS device because fraudulent Sellers tend to place false coordinates on Survey Plans such that if an unsuspecting Buyer dispenses with the need to do the needful, the chart report made on basis of coordinates on a Survey Plan may end up misleading the Buyer.

In Lagos State, charting of the property [especially in cases of purchase of bare Land] helps identify if it is Committed or if it is Free Land. If the Land is Committed it means the Government has reserved or acquired the Land alongside others together with it for future project and plans. If the Land is Free it means either of two things. It could mean that the Land is part of the Land excised and allotted to a Community or Village by the Government and published in its official publication [the official publication of Government is called Gazette]. Hence people generally refer to Land that falls within this description as having Gazette / Village Excision. Also, in cases where the Land is Free, but is not part of the Land referred to as having Gazette / Village Excision, it simply is Land in respect of which the Government has not determined areas to earmark for its commitment to future projects and plans and as such no determination has been made on excision. Acquiring such a property is 50 - 50 gamble. A Buyer of such a property may be lucky enough to have the property fall under the area in respect of which an excision is granted after the process is followed through. Such properties usually have fancy titles such as: Gazette in Process and Excision in View with Estate Developers or Sellers making sales with File Numbers. This is a commonly used scam / trick by real estate companies in Lagos, Nigeria.

3. At the Lands Registry: Each State in Nigeria has a Lands Registry. Usually, search on properties with Certificate of Occupancy or Registered Title Document, are carried out in the Lands Registry. The Title Document or Instrument is registered as No.....at Page ....in Volume... This makes it easy for a manual or electronic search. A properly conducted search at the Lands Registry would show:

  • The Property Register which details - the devolution of title, reference to map/field plan, notes relating to ownership of mineral, exemptions from overriding interests, easements, rights, privileges,  etc.;
  • The Proprietorship Register which details - particulars of registered owner / proprietor, cautions, inhibitions and restrictions affecting the right of the proprietor to dispose title, etc.; and
  • The Charges Register which details - particulars of charge, mortgage and encumbrance created, notices of leases and adverse interest or claims permitted by law, notes relating to covenants, conditions, and other rights, dealings with registered charges and encumbrances capable of registration, etc.
Also, there are cases where fraudulent Sellers present cloned Certificate of Occupancy or Registered Titles, alongside fake or forged means of identification. Hence it is very important to confirm the authenticity of Certificate of Occupancy and means of identification presented by any Seller.

4 At the Companies Registry [Corporate Affairs Commission]: - In a situation where the Property is owned by a Corporate Body incorporated or registered under the Companies and Allied Matters Act, Search at the Companies Registry is paramount. This will help to reveal the Registered Trustees or Directors or Alter Egos of the Corporation so as to determine their capacity and authorization to validly carry out a Sales Transaction. Also, Companies are require to file annual returns with the CAC which is accompanied by a Company's Financial Statement. The Company's Financial Statement reveals the Company's Assets [if there are any] as well as any charges or encumbrance on same. Charges against assets of incorporated companies must be registered with the CAC in compliance with Section 197 of the Companies Allied Matters Act. Non-registration can lead to the same being declared null and void against the liquidator and any secured creditor of such a company.

5. At the Probate Registry: Search at the Probate Registry is very vital where the Owner of a Property is deceased and the personal representatives or executors or beneficiaries to the deceased estate [usually family members] desire to sell off the property. This is a search conducted to reveal whether or not probate or letters of administration has been granted on the estate of a deceased and to ascertain the scope of authority of the personal representatives or executors or beneficiaries. Without a grant of probate and /or letters of administration, no Vendor or Seller [whether family members or otherwise] possesses the requisite authority to sell the estate or property of a deceased person.

6. By Inquiry into the Traditional Evidence ; This is simply conducted on the principal members of the family or community land and the head of the family or community. The history of the land and how possession and ownership has always been handed down is investigated. Steps are taken to ensure that the land is not subject to any Litigation or dispute whatsoever. Also the consent of the principal members and head of the family or community to the sales transaction is obtained so as not to make the sales transaction void or voidable.

A Buyer looking at buying a property in Lagos should be aware that irrespective of the fact that a community or family may have been settlers or dwellers from time immemorial on a property, if the Chart Report obtained from charting of the property does not turn out right, no purchase should be made. The deal should be called off immediately and no payments whatsoever should be made. The Land Use Act vests land title in each State's Governor, to be held in trust and administered for the use and common benefit of Nigerians. Also, the Land Use Act stipulates that the Governor must give consent to any transaction that transfers or assigns ownership of Land. It is the Governor's Consent that would validate the transaction. Not the consent of the Family or Community whether or not they have been in possession of the land for donkey years.

7. By Search at the Court: Search at the Court is vital to confirm absence of litigation. Where a Sale is made and there is a pending litigation on the Property with respect to ownership or title, the sales transaction is void or at best voidable.

Lis Pendis is the inhibition/restriction of sale of Land which is the subject of a pending suit. Lis Pendis usually applies where at the time of sale/purchase there is a pending suit in respect of the property, the action or the lis is in respect of real property, object of the action is to recover or assert title to a specific real property; and party concerned [Seller / Vendor and / or Buyer / Purchaser] was aware or ought to be aware of the pending suit.

It also comes in handy where the property was subject of litigation and there is a Judgment of Court. The search at Court also reveals if there is an appeal against the Judgment in question. Most times, fraudulent Sellers present Court Orders as document they rely upon to confirm their ownership of property so as to sell. A Court Order is not a Court Judgment and a Court Judgment is subject to appeal except it is the Judgment of the Supreme Court. Court Judgment may be relied upon where it is the full and final judgment of the Supreme Court. Court Judgment also could arise in a case of debt recovery where a property is attached in lieu. A Certified True Copy [CTC] of a Court Judgment may be obtained upon proper applications and payment of a prescribed fee. Some fraudulent Sellers may go as far as forging a Supreme Court Judgment just to make a Buyer dispense of the need for a Search. Hence it is important to have a Lawyer conduct a search because a fraudulent seller may present a forged Court Judgment.

The fact that everyone is buying is no guarantee that the property or Estate has good Title. Situations exist where an Estate Development Company has good Title Documents for some of their Estates while others have defective Title Documents. Also in some cases, an Estate could comprise of Land that has good Title Documents and some other Land that has defective Title Documents. The fact that the whole of the Estate is fenced up as one property does not guarantee that the Land a Buyer is about to make payments for is genuine. Hence, when conducting Charting, it is vital to conduct it specifically on the Land about to be acquired.

Also, the fact that a beautiful mansion or luxury edifice [House] is built on a Land does dispense with the need for Search. Some Sellers who make discovery that they have a legally defective Title to the Land may develop the Land hurriedly so as to make it easier to sell off to an unsuspecting Buyer. What the Buyer usually is told in these kind of scenarios is: “Governors Consent is being processed”. If the Title of a Land is defective, whoever buys a House built on such a Land is merely a tenant at the mercy of the true Owner with a valid legal Title to the Land. The Legal Maxim: “quicquid plantatur solo, solo cedit” in very instructive. It simply means that whatever is affixed or planted to a land belongs to the land. So be it a High-Rise or Skyscraper or Factory or Hotel or whatever it is affixed to the Land, it belongs to the true Owner with a valid legal Title to the Land.

A Lawyer is a professional with requisite expertise to facilitate the conduct of a property search in every ramification required and further interpret the outcome of the search via a Search Report that breaks down the details. A Buyer is advised to not replace a Lawyer with an Estate Agent who offers to conduct the property search as this would be a serious gamble of hard earned money.

4. DOCUMENTATION AND PAYMENTS
Ensure all Documents evidencing the sales transaction is prepared and ready for signing. It is the duty of the Lawyer of the Buyer or Purchaser to prepare the Documents which includes: Contract of Sale; and Deed of Assignment; or Deed of Sub-Lease; or Deed of Conveyance; or Deed of Transfer; or Power of Attorney; as the case may be. The rationale for which the duty of preparation of the Documents is on the Lawyer of the Buyer or Purchaser flows from the right of the Buyer or Purchase to the non - reversionary interest of the property. It is advisable to make all payments regarding the property on basis of legal advise. Upon payments, the Buyer’s Lawyer should ensure that all Documents are promptly executed and all Documents relating to the property ownership such as the purchase receipt; the contract of sales; the building plan; originals of other relevant documents in possession of the previous owner; etc. should be collected.

However, where the property is a Flat in a Block of Flats or a House that shares common facilities with other buyers, the Documents may be prepared by the Lawyers of the Developers or Sellers or Owners [as the case may be], however, the purchaser or buyer in such a case has a right to hire a Lawyer to ensure the terms and covenants are in the best interest of the purchaser or buyer.

Sale of real estate, however, does not involve actual selling and purchasing. There is only the transfer of rights from one person to another. This transaction is usually called anassignment. The seller assigns the right to use and occupy the land to the buyer. In this case, the seller acts as the assignor, and the buyer is the assignee.

It is important to note that the Deed of Assignment is to be accompanied with the Survey Plan of the property in question as these are part of the Documents required for perfection of title. It is compulsory that every Deed of Assignment contains a Consent section for the Governor of the relevant state where the land/property sold is situated.

5. TAKE POSSESSION
Buyers should beware of any clause or hidden fine print in an Agreement which prevents them from taking immediate physical possession of property once they have made payments. Even in cases where payments is made in installments, there ought to be a Contract of Sale to regulate the entire process of the transaction and stipulate terms. Some Estate Development Companies add unreasonable conditions aimed at preventing subscribers or buyers from taking immediate physical possession. A property owner who cannot show precisely where the property owned is cannot be said to be a true Landlord in every sense. Without taking physical possession, all a Buyer has is merely paper.

Taking possession reduces the risk of litigation from trespassers. Also, it reduces the prospects of a Fraudulent Seller or Estate Development Company reselling the same property to many other people. Most of the popular Estate Development Companies in Lagos today put up clauses and difficult commitments to ensure that their Buyers or Subscribers do not get possession. Such include Developmental Levies; proof of commitment to develop before allocation to land is made; etc. The sad truth however is that most of these Estate Development Companies have sold beyond what they have and as a result, they keep pushing the legal battle from their subscribers to a later date. A clear example is where an Estate Development Company owns 240 Plots of Land in a gated community / Estate; meanwhile they have sold the same Plots of Land to over 10,000 unsuspecting Buyers or subscribers. So why would they allow possession to be taken by the Buyers or subscribers when that would amount to chaos and all-out war, legally and otherwise? Buyers or subscribers keep hearing sweet fairy tales by moonlight, to soothe their demands for possession.

Possession means holding property in one's power or the exercise of dominion over property. By having possession one exercises control over something to the exclusion of all others. The saying possession is nine tenths of the law is an old common law precept that means one who has physical control or possession over the property is clearly at an advantage or is in a better possession than a person who has no possession over the property. Even if a person is the rightful owner of the property but has no possession over it, the person who is in possession will be in a better position should the property ever be subject to challenge. This is especially true with adverse possession. However mere possession alone does not grant the possessor rights in the property superior to those of the actual owner. This adage possession is nine tenths of the law is not a law but a logical rule of force that has been recognized across ages.

Hence if there is litigation on a property, the Court may order that status quo be maintained and the person in possession would remain in possession. After making payments and executing Title Documents, a Buyer can take possession by: erecting a small fence, farming on the property, putting tenants on the property, putting a security person on the property, putting construction materials on the property, etc.

6. PROCESSING OF GOVERNORS CONSENT REGISTRATION OF DOCUMENTS WITH THE STATE GOVERNMENT
The Land Use Act prohibits alienation of Land without the consent of the Governor. It makes it mandatory to seek and obtain the consent of the Governor of the State where the Land is situated before alienation or sale of interest in Land, otherwise the transaction shall be void.

However, owing to the delays and commercial loss that would be occasioned by waiting for Governors Consent before a transfer of interest in Land or Property is made, the practice as endorsed by the Supreme Court in the case of Savannah Bank v Ajilo is for Governors Consent to be sought after the Land transaction has been made.

The Buyer / Purchaser should ensure that the Seller / Vendor signs the application letter for Consent, this is because it is needed to seek consent of the Governor to alienate. The Procedure for obtaining Governors Consent and Registration differs from State to State.

Application for Governors Consent
The documents listed below are required to process an application for Governor's Consent [in Lagos State, other States have similar procedures]:

  1. Dated letter of application with address and telephone numbers;
  2. Completed Lands Form 1C;
  3. Certified true copy of grantor's title document;
  4. Vendor/Grantor's tax clearance certificate and development levy receipt;
  5. Purchaser/Grantee's tax clearance certificate and development levy receipt;
  6. Four executed Deed of Assignment;
  7. Four Chartable survey plans;
  8. Evidence of payment for charting, endorsement and Lands Form 1c;
  9. In case of an undeveloped land, an Affidavit in lieu of Tenement rate;
  10. In case of a developed land, a Building Plan and photograph of property.


The application letter and documents listed above are to be submitted at the Land Registry of the state in question, same would be received and referenced. The status of the land is then investigated through charting at the Surveyor General's Office. The property would subsequently be assessed to determine the fees to be paid at the designated bank which includes assessment fee, registration fee, consent fee, charting fee, stamp duty, capital gains tax etc.

After the assessments, a demand Notice will be issued to the Purchaser who is required to proceed to make payment and forward treasury receipts of payment of fees to the registry. Thereafter, the documents would be approved and stamped accordingly. Failure to pay stamp duty renders the document unacceptable for registration and inadmissible in evidence in a court of law. Penalty would also apply where relevant documents are stamped outside the prescribed number of days.

Registration Legal Ownership of property is based on registration of title documents. Failure to register renders the Instrument void. Registration guarantees indefeasibility of title subject to overriding interest, reduces fraud and possible challenges arising from suppression or omission of instruments. Also, registration gives priority, as applications when received are numbered serially. Hence conflicts as to ownership is determined by reference to the registered title deed. Where both parties have registered title deeds, time of registration determines priority.

Land Instrument registered without inherent defects take priority over unregistered land instruments.

Registration does not cure defects neither does it confer validity on the Instrument which it would not have otherwise had but for its registration.

Registered Land Instrument can also be pleaded and tendered as evidence in court, whilst unregistered instrument can only be so tendered/pleaded where relief sought is an equitable one coupled with possession that some consideration was provided for. Registration gives an indication that a property is encumbered and any subsequent purchaser would be duly informed upon carrying out a search at the registry.

Procedure for obtainment of Certificate of Occupancy
An application for issuance of Certificate of Occupancy can be made after the Governor's consent has been obtained and the Deed of Assignment duly registered. The process obtainable in most States is largely similar to that in Lagos State. These include:
  1. Submission of Application Letter addressed to the Executive Secretary Land Use and Allocation Committee [LUAC], at the Lands Registry with the following documents attached:
  2. i. Vital Information Form for Certificate of Occupancy with receipt;
    ii. Completed Certificate of Occupancy Form with receipt;
    iii. Land Information Certificate with receipt;
    iii. Four original Survey Plan [2 cloth copy and 2 paper copy];
    iv. Four Passport Photographs with white background;
    v. Sketch Map of the Site Location Purchase Receipt Duly Stamped;
    vii. Evidence of payment of: Income Tax, Current Development Levy, Publication Fee, Capital Contribution Fee.
  3. Compilation of Applicants names for publication, Title Search for previous Registration and Site Inspection.
  4. Certificate of Occupancy Engrossment [by Land Use Allocation Committee - LUAC].
  5. Recommendation for execution of C of O [by E.S. LUAC, SSA LANDS P.S. Lands].
  6. Execution of Certificate of Occupancy [by the Governor].
  7. Stamp Duty [by Commissioner for Stamp Duties].
  8. Registration of Certificate of Occupancy [by Lands Registry].
  9. Collection of executed and registered Certificate of Occupancy.
This Guide on How to Buy Property [Land or House] in Nigeria makes a bold attempt to provide an in-depth insight on all an interested Buyer should know. Simply follow our prescribed step:
  1. Identify the objectives.
  2. Conduct a physical inspection of the property.
  3. Hire professionals to conduct a property search.
  4. Documentation and payments.
  5. Take possession.
  6. Processing of governors consent registration of documents with the State Government.


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