 |
| Clementina E. Ukiri, Esq. |
The dream of owning property in Nigeria is a significant milestone. It represents stability, security, and a wise investment. However, this dream can quickly become a nightmare if you fall victim to the fraudulent schemes that unfortunately exist in the real estate market.
The good news is that with the right knowledge, you can protect yourself. This guide will equip you with the tools to spot red flags, understand the non-negotiable role of a lawyer, and demystify the complex legal language in your sale agreement.
Red Flags to Watch for When Buying Property
Fraudsters thrive on a buyer's ignorance and eagerness. By staying vigilant and watching for these warning signs, you can significantly reduce your risk. Here’s a checklist to keep handy:
1. Extreme Urgency: Be wary of sellers or agents who create a false sense of urgency, pressuring you to make a decision immediately. They might claim another buyer is about to pay or that the price will double tomorrow. This is a classic tactic to prevent you from conducting proper due diligence.
2. Demands for Cash Payments: A legitimate seller will have no problem with traceable payments like bank transfers or manager's cheques. Fraudsters often demand cash to avoid creating a paper trail. Insisting on paying through the bank is a simple but powerful safety measure.
3. Reluctance to Provide Original Documents: A genuine seller will readily provide copies of the title documents (like a Certificate of Occupancy, Deed of Assignment, or Survey Plan) for your lawyer to verify. If they offer excuses or only show you photocopies and refuse to let you see the originals, it's a major red flag¹.
4. Price is Too Good to Be True: If a property is listed at a price significantly below the market value for that area, you need to ask why. While you might find a good deal, an unbelievably low price is often a bait used in fraudulent schemes.
5. No Access for Physical Inspection: If the seller or agent repeatedly makes excuses for why you can't visit or inspect the property, walk away. They may be trying to sell a property that doesn't exist, is in a disputed area, or is under government acquisition.
6. Vague Seller Identity: You should be dealing directly with the owner or their legally appointed representative. If the person you're dealing with is a vague "consultant" or "friend of the owner" and cannot produce a valid Power of Attorney, be extremely cautious.
The Indispensable Role of a Property Lawyer
In a Nigerian property transaction, a qualified lawyer isn't a luxury; they are an absolute necessity. Relying on just an agent, or worse, a "quack" who isn't legally qualified, is one of the costliest mistakes you can make.
Here's why a specialist property lawyer is non-negotiable:
1. Thorough Due Diligence (Investigation): A lawyer's investigation goes far beyond what an agent does. They will conduct comprehensive searches at the Land Registry to verify the title, check for encumbrances like mortgages, and confirm the property's survey plan. If the seller is a company, they will also conduct a search at the Corporate Affairs Commission (CAC) to confirm the company's status and its authority to sell the property². This rigorous process uncovers issues that could nullify the entire transaction.
2. Expert Document Preparation: A lawyer drafts and reviews the Contract of Sale and the Deed of Assignment to ensure your interests are fully protected. They make sure the property is accurately described, the seller's obligations are clear, and there are no hidden clauses that could harm you later.
3. Safe Management of Funds: Your lawyer can advise on the safest way to structure payments. Often, payment is made to the seller through the buyer's lawyer, who ensures that funds are only released once all conditions are met, providing a crucial layer of security.
4. Title Perfection: After the sale, the lawyer's job isn't done. They will guide you through the critical process of perfecting your title, which involves obtaining the Governor's Consent, stamping the Deed, and registering it at the Land Registry. Without this, your legal ownership is incomplete.
Contrast this with a "quack" agent, whose primary motivation is their commission. They often lack the legal training to spot title defects and may inadvertently (or deliberately) lead you into a bad deal.
Decoding Your Sale Agreement: Key Clauses Explained
Legal documents can be intimidating, but understanding a few key clauses can empower you to know what you're signing.
1. Indemnity Clause:
- In Simple Terms: This is a "we've got your back" clause. The seller promises to protect you (the buyer) from financial loss if a specific problem arises from their end after the sale.
- Why it Matters: Imagine you buy land, and a year later, the seller's family member shows up claiming they never consented to the sale. An indemnity clause would require the seller to cover your legal fees and any financial loss you suffer from this claim³. It's a crucial safety net.
2. Force Majeure Clause:
- In Simple Terms: This is the "Act of God" clause. It addresses what happens if an unforeseeable and uncontrollable event (like a natural disaster, war, or pandemic lockdown) makes it impossible for either party to complete the transaction on time.
- Why it Matters: It protects both you and the seller from being penalised for a delay that is genuinely out of anyone's control. It typically allows for the contract to be postponed or, in some cases, cancelled without penalty.
3. Dispute Resolution Clause:
- In Simple Terms: This is a pre-agreed plan for how you'll handle disagreements. It specifies the steps to take before heading to court.
- Why it Matters: Lawsuits are expensive and time-consuming. This clause often requires that you first try to resolve disputes through mediation (with a neutral third party) or arbitration (a more formal but less cumbersome process than court). This can save both parties immense time and money⁴.
Conclusion
Navigating the real estate market doesn't have to be a gamble. By learning to spot the red flags, engaging a qualified property lawyer from day one, and understanding the terms of your agreement, you transform yourself from a potential victim into an empowered buyer. These steps are your best insurance against fraud, ensuring your investment is secure and your dream of ownership becomes a happy reality.
Disclaimer: This article provides general information and does not constitute legal advice. You should consult with a qualified legal professional for advice tailored to your specific situation.
References
[1] Udo, U. (2019). Due Diligence in Real Estate Transactions in Nigeria. Mondaq. Retrieved from [a relevant legal article source].
[2] The Nigerian Bar Association (NBA). (n.d.). The Importance of Legal Representation in Property Transactions. [A publication or article from the NBA].
[3] Garner, B. A. (2019). Black's Law Dictionary (11th ed.). Thomson Reuters. (Definition of Indemnity Clause).
[4] Institute of Chartered Mediators and Conciliators (ICMC). (n.d.). The Benefits of Alternative Dispute Resolution (ADR) in Commercial Contracts. [A relevant publication from a Nigerian ADR institution].
0 Comments