THE LEGALITIES OF LAND OWNERSHIP AND REAL ESTATE TRANSACTIONS IN NIGERIA

 THE LEGALITIES OF LAND OWNERSHIP AND REAL ESTATE TRANSACTIONS IN NIGERIA

Understanding land ownership laws, property rights, and real estate transactions in Nigeria can be quite stressful and difficult, given the diversity and differences in the Nigerian legal systems, historical factors, and modern developments. Below are some guides to understanding the key elements of real estate transactions in Nigeria.

1. Some Types of Land Ownership in Nigeria

In Nigeria, land ownership is divided into systems:

• Customary Law: Land ownership is governed by traditional beliefs and family inheritance. Customary law applies in rural areas, where the local communities or villages own land, families and individuals acquire such ownership rights either through inheritance from ancestors, gift, or allocation by family head or community leaders.

• Statutory Law: Land ownership is governed by Nigerian statutory law applied in urban areas and follows a formal process. The law governing the allocation of land is the Land Use Act of 1978, which vested all urban lands in Nigeria in the state government and federal government for Federal lands

• State Ownership: Under the Land Use Act 1978, all lands in Nigeria are vested in the state governor. This means that the governor has the right to allocate land to individuals, companies, or entities, subject to some conditions for a period of time and the law stipulates a maximum of 99 years.

 

2. Property Rights

Property rights in Nigeria can be proven with the following:

• Land Title: it is a legal document to prove ownership of a piece of land. This may include certificates of occupancy (C of O), deed of assignment, or deed of conveyance, and land use documents. It proves the title owed on the land.

• Certificate of Occupancy (C of O): The primary proof of land ownership in Nigeria, issued by the state governor under the Land Use Act. It grants the landholder the right to use and develop the land for a specific period. It is usually the most sought-after legal land document in Nigeria.

• Deed of Assignment: It is a legal document that confirms the transfer of land rights from one party to another. It also that the title has been transferred to another. It must be registered in order for it to be documented at the Land registry of the state in which the land is situated

• Governor’s Consent: Any transaction that involves the transfer of land or the creation of an interest in land (such as a sale, lease, or mortgage) requires the consent of the state governor of that state under the Land Use Act, that the interest vested on a person is being transferred to another.

3. Land Registration

It is the process of registering land and it is essential for establishing clear ownership of such land and reducing disputes. The Land Registry in each state of Nigeria records all land transactions, including transfers of ownership, mortgages, and leases.

• Deed Registration: After execution of a deed (including sale, lease, or mortgage), the deed would be taken and registered at the Land Registry. This serves as public notice of the ownership transfer and it is accessible to the general public for search.

• Survey Plan: A properly executed survey plan is essential for land registration. It helps with the description, size, and structure and also determines the exact boundaries and location of the property.

4. Real Estate Transactions

Real estate transactions in Nigeria are regulated by various laws of the State. See below some steps to ensure compliance with the law;

• Due Diligence: Conduct a thorough search before purchasing land or properties in Nigeria. This includes: Verifying the land’s title and ownership status, confirming the originality of the Certificate of Occupancy (C of O) if any, ensuring that there are no disputes, unpaid taxes, or unregistered interests on the land and conducting a search at the Land Registry to check for any discrepancies or conflicting claims on the land.

• Sale Agreement: This agreement should detail all terms of the transaction, which includes the price, payment schedule, the receipt clause and any terms of the agreement. It must be signed by both parties and witnessed by legal professionals.

• Payment of Stamp Duty: The Nigerian government requires the payment of stamp duty on property transactions. The rate of stamp duty is not fixed but depends on the transaction value and is paid to the Federal Inland Revenue Service (FIRS) or the state tax authority

• Obtaining Governor’s Consent: Any transfer, mortgage or lease of land requires the state governor’s consent. Failure to adhere to the rule of obtaining this consent can render the transaction void and unenforceable.

5. Some Popular Challenges in Land Ownership and Real Estate Transactions

• Land Disputes: Conflicts over land ownership are common due to unclear title, transactions that are fraudulent , or family disputes between their selves and this can be avoid by involving professional for due diligences before purchase, so as not to purchase disputes with your own money.

• Land Grabbing: In urban areas, there have been instances of land grabbing popularly called by powerful individuals or groups. This is particularly concerning for communities without clear land titles.

• Administrative Hurdles: The process for obtaining land titles or government consent can be slow, difficult and cumbersome, these cannot be fixed until the lack of efficiencies in land administration and registry services is addressed.

• Corruption: Corruption has really impacted the real estate sector negatively, especially in obtaining permits, approvals, or conducting Land searches and all other land transactions.

• Lack of Adequate Land Records: The lack of an appropriate, detailed and technologized land registry system can contribute to the obstacle faced in confirming land ownership and verifying titles. The ignorance of the fact that land has to be recorded or updated is also a contributory factor and this can be controlled by getting professional assistance.

8.   Points for Real Estate Investors in Nigeria

• Engage the services of an experienced lawyer who specializes in land transactions and property law to guide and assist you through the legal process.

• Verify all land documents (C of O, survey plans, deed of assignment) at the appropriate place and register the title with the appropriate authorities.

• Ensure that you get the governor’s consent (when required) especially for any transaction that involves a transfer of land rights.

• Be extremely careful of fraudulent practices, including fake land documents and illegal sales.

By thoroughly going through this article and understanding the rights and responsibilities regarding land ownership in Nigeria, you can mitigate and curtail risks and ensure a successful real estate transaction.

Disclaimer:

This article provides general information and is not intended to replace professional legal advice. Consult a qualified professional from Notre Dame Attorneys at 08033056627 for personalized guidance.