In real estate sales transactions, documentation has been proven to be one of the discombobulating aspects for buyers in Nigeria. Land titles have remained a significant contributing factor to this bottle neck for years without end. The Nigerian legal system has seen an enormous number of cases on land disputes and fraud committed through manipulation of Land title documentation. We have identified that one of major contributing factors is ignorance and not enough awareness on what constitutes proper and valid documentation in Nigeria. Our goal at BuyLetLive is to make your property acquisition journey easier and in this article we have provided some information on land ownership documentations within the Nigerian context. We will kickstart the conversation from the types of titles and their importance in terms of what the holder can do. For information purposes, the Land Use Act of 1978 provides the latest framework for land ownership in Nigeria and will be the most referenced document throughout this article.
Certificate of Occupancy (C of O)
One of the most criticized provisions of the Land Use Act is that it vests all land within the territory of each state in the State Governor, who is expected to hold it in trust and make it available to the citizens through the grant of a 99 years rights of occupancy. Technically, this means that every land holder in Nigeria is considered a leaseholder and a Certificate of Occupancy is a legal document issued by the government to convey occupancy rights to the person.
On any piece of land in Nigeria, only one Certificate of Occupancy can be granted. The implication of this is that when a property owner decides to sell, the Governor is not expected to issue another C of O on the same property. What is usually required is that the original title holder would secure the Governor’s consent to sell. This consent document will then serve the purpose of transferring ownership to the new buyer and need to be documented with the state government authority.
Governor’s Consent
Because land is a property of the government, a transfer of such interest according to the Land Use Act is only permitted when the consent of the State Governor is sought and duly obtained. “Governor’s consent” is usually signed by the Governor as a proof that he has consented to the transfer of a right of occupancy on a landed property from one person to another. This document is very crucial and any title transfer that is not consented to by the Governor is considered invalid.
Deed of Assignment
A Deed of Assignment is a proof of transfer of title or the ownership in a property from one person to another. In this case, the original holder is known as the assignor, while the other party is known as the assignee. In Nigeria, where a party is buying from a holder of a certificate of occupancy, it is expected that the transaction should be followed with a deed of assignment. Deed of assignment is usually prepared by the buyer’s lawyer and then executed by both parties once properly vetted. Typically, a deed should contain information about the parties, and description of the subject property being sold. Additionally, a deed of assignment is only tenable in law if it has been duly registered with the consent of the Governor. Prior to the Land Use Act this was known as the Deed of Conveyance and some properties still have this title till date.
Registered Survey Plan
Every land is expected to have undergone a survey that will show the boundaries and geocode and its measurement, alongside other geoinformation. For a green parcel of land, especially if at the outskirts of town, this is usually the first document that developers offer to new subscribers before proper documentation is done and registered with the state. It is usually done by an estate surveyor and registered with the office of the Surveyor General in the state.
Deed of Mortgage
Real estate is one of the most tenable securities for loans all over the world. According to Allied Market Research, the global real estate loan market size was valued at $7,968 billion in 2020 and is projected to reach $23,121 billion by 2030. Typically, for every real estate secured credit, it is expected that the mortgagee (lender of a loan) should have an interest in the property. This additional interest would typically be conveyed through a Deed of Mortgagee and if the borrower of the loan defaults on loan payment, the holder of the document can take possession of the property. This document is usually prepared by a reputable lawyer and registered with the state. This is similar to the deed of Lease and/or Sublease that follows lease and sub-lease arrangements.
Contract of Sale, Letter of Allocation, and Receipts of Payment
Contract of sale indicates that a property has been sold. It is a typical contract between the buyer and seller that documents the sales contract between the parties. The transaction can happen between an individual or company and the state or a private developer. Oftentimes, a contract of sale is followed by a letter of allocation that documents every detail of the subject property or plot. Payment receipt on the other hand shows the amount paid to the seller by the buyer, and authenticates that there was a monetary consideration for the sales transaction. It is noteworthy that these documents on their own are not legally tenable, and buyers are encouraged to properly document titles with the state after a land transaction.
For more information on the documentation process, requirements, fees and additional information please visit the state land registry. For properties in Lagos, you can check up more information here.
You can follow us on LinkedIn and Instagram to get more insights into what is happening in the Nigerian real estate market. Send us your comments and feedback to research@buyletlive.com and we would like to keep in touch.