NAVIGATING PROPERTY LAW IN NIGERIA: KEY CONSIDERATIONS FOR BUYERS AND SELLERS.

Nigeria's real estate market is a vibrant and dynamic sector, offering immense opportunities for investment and homeownership. However, navigating the intricacies of property law in the country can be complex. For both buyers and sellers, understanding the legal framework, key processes, and potential pitfalls is crucial to ensuring a smooth and secure transaction.

This article delves into the essential considerations for anyone looking to buy or sell property in Nigeria, helping you make informed decisions and safeguard your investment.

For Buyers: Due Diligence is Your Best Friend

Purchasing property in Nigeria requires meticulous due diligence. Rushing into a deal without proper checks can lead to significant financial losses and legal headaches.

1. Verifying Title and Ownership:

This is arguably the most critical step. Before parting with any money, you must ascertain that the seller has a valid title to the property and the legal right to sell it. Key documents to verify include:

Certificate of Occupancy (C of O): This is the most common and arguably most important title document in Nigeria, issued by the Governor of a state. It grants a statutory right of occupancy for a term, usually 99 years.
Deed of Assignment: This document transfers the interest in land from the assignor (seller) to the assignee (buyer). It must be properly executed, stamped, and registered.
Governor's Consent: For most transactions involving land held under a Certificate of Occupancy, the consent of the State Governor is legally required for the transfer of interest to be valid. Without it, the transaction is incomplete and voidable.
Survey Plan: This document defines the exact boundaries and dimensions of the land. It helps to prevent disputes arising from boundary encroachments.
Power of Attorney: If the seller is acting through a representative, ensure the Power of Attorney is validly executed, registered, and grants the representative the authority to sell the property.

2. Conducting a Physical Inspection and Property Search:

Beyond the documents, a physical inspection of the property is essential. Check for:

Encumbrances: Are there any existing tenants, squatters, or easements that could affect your use of the property?
Structural Integrity: For developed properties, assess the building's condition, including its foundation, roof, plumbing, and electrical systems.
Neighborhood and Amenities: Consider proximity to essential services, infrastructure, and security of the area.

A thorough search at the relevant land registry is vital to confirm that the property is not subject to any government acquisition, litigation, or other encumbrances like mortgages or caveats.

3. Understanding the Land Use Act:

The Land Use Act of 1978 vests all land in Nigeria in the Governor of each state. This means that individuals do not own land absolutely but rather hold a "right of occupancy." This is why the Certificate of Occupancy and Governor's Consent are so crucial. Understand the implications of this Act on your ownership rights and responsibilities.

4. Engage Legal Counsel:

Do NOT attempt to navigate a property transaction in Nigeria without a qualified legal practitioner specialising in property law. Your lawyer will:

Conduct comprehensive due diligence and title verification.
Draft and review all legal documents, ensuring your interests are protected.
Facilitate the process of obtaining the Governor's Consent.
Advise on all legal aspects of the transaction and mitigate risks.

For Sellers: Prepare for a Seamless Process

Selling property in Nigeria also requires careful preparation to attract serious buyers and ensure a legally sound transaction.

1. Prepare Your Documents:

Having all your property documents readily available and in order will significantly speed up the selling process. This includes:

Your original Certificate of Occupancy or other valid title documents.
The original Deed of Assignment or other instruments of title through which you acquired the property.
Approved building plans (if applicable).
Evidence of tax payments (ground rent, tenement rates, etc.).

2. Ensure Valid Title:

Before putting your property on the market, ensure your title is unencumbered and transferable. Resolve any issues such as outstanding charges, disputes, or missing documents. If you acquired the property through an unregistered Deed of Assignment, you might need to perfect your title before selling.

3. Accurately Represent the Property:

Transparency is key. Provide accurate information about the property's condition, boundaries, and any known defects. Misrepresentation can lead to legal action down the line. It is advisable to conduct a valuation to determine a fair market price.

4. Obtain Governor's Consent (for your buyer):

While it's the buyer's responsibility to obtain Governor's Consent for the new transfer, as a seller, you need to cooperate fully and provide all necessary documents and information required for this process. Delays in obtaining consent can frustrate a sale.

5. Understand Capital Gains Tax and Other Levies:

As a seller, you may be liable for Capital Gains Tax (CGT) on the profit made from the sale of the property. Other potential levies include withholding tax (for corporate sellers) and consent fees. Factor these into your pricing and budget.

6. Engage Legal Counsel:

Just as with buyers, engaging a property lawyer is essential for sellers. Your lawyer will:

Review offers and draft or review the Deed of Assignment.
Advise on legal obligations and liabilities.
Ensure the transaction is legally sound and protects your interests.
Assist with tax implications and other regulatory requirements.

Common Pitfalls to Avoid

"Omo-Onile" (Land Thugs) Issues: Be wary of land grabbers and touts. Ensure you are dealing with the legitimate owner or their authorised agent. Engage security where necessary during inspections, especially for undeveloped land.
Fraudulent Documents: The prevalence of fake title documents is a significant concern. This reinforces the need for thorough verification at the land registry.
Unregistered Transactions: An unregistered transfer of interest in land is not legally recognised. Ensure all deeds are properly stamped and registered.
Lack of Proper Searches: Skipping land registry searches is a major risk that can lead to buying encumbered or disputed property.
Informal Agreements: Avoid verbal agreements or poorly drafted contracts. Always have a comprehensive written agreement prepared by a lawyer.

Conclusion

Property transactions in Nigeria, while potentially lucrative, demand a high level of diligence and legal expertise. For both buyers and sellers, understanding the legal landscape, preparing the necessary documentation, and crucially, engaging experienced legal professionals, are not optional but indispensable steps. By taking these key considerations to heart, you can navigate the complexities of Nigerian property law with confidence, securing your investment and ensuring a successful transaction.

Clementina E. Ukiri, Esq.

07057269862