10 THINGS TO DO BEFORE BUYING LAND IN LAGOS
10 THINGS TO DO BEFORE BUYING LAND IN LAGOS
In Lagos State, perfection of title simply means registering an interest in a property with the government. When purchasing a property in Lagos or elsewhere in Nigeria, the purchaser must obtain a proper title register with the government.
The Land Use Act of 1978 is the primary law governing property registration in Nigeria. For many people, buying a piece of land or real estate is all about finding a vendor who is willing to sell and agreeing on a price. Many people make the mistake of dealing with property vendors in trust, assuming that the fact that they have known each other for many years or that an agent has assured them of good title is enough to avoid future problems with the land or real property.
It is critical to take certain steps prior to the purchase of land, or land with structure, during the course of the purchase, and even after the purchase, in order to secure one’s interest in the said property. In order to avoid future legal issues, a willing purchaser must investigate the vendor’s title to the said land and, in some cases, the track record of such vendor. When purchasing a property in Lagos, there are several steps to take before the title is perfected, which are briefly discussed below.
The two parties (vendor and purchaser) meet and discuss at the preliminary stage the price, mode of payment, nature of the vendor’s title, and so on. After the parties agree on the purchase price, a Contract of Sale Agreement is drafted pending the Purchaser’s investigation to determine the nature of the Vendor’s title in order to ensure that the property truly belongs to the Vendor and is free of any encumbrance.
When the contract is exchanged, the vendor is deemed to hold the land in trust for the purchaser until he pays and all conditions are met. The goal is to obtain a good root of title from the vendor. There is no obligation on the vendor to establish that he is the owner of the title that he intends to convey until the contract is executed, but once the contract is executed, he is required to do so. Terms agreed upon by the parties may be included in the Contract of Sale Agreement.
TITLE STAGE INVESTIGATION
Following contract execution, the purchaser would collect title documents from the vendor. These documents should be sufficient to establish land title without the need for any additional evidence. Certificate of Occupancy, Deed of Assignment/Conveyance, Survey Plan, Registered Title, Court Vesting Order, and other similar documents may be required.
After obtaining the relevant documents (usually copies) from the vendor, the Purchaser’s solicitors conduct an investigation to confirm the vendor’s title and to ensure that there are no defects in the said title to the property. Several searches are conducted at various registries where records of properties and encumbrances are kept.
Searches can be carried out in the following ways:
• Land Instrument Registration Law – Each state’s Land Instrument Registration Law establishes a land registry for the State, where documents relating to land within the territory are kept, and it varies from state to state.
• Check with the Corporate Affairs Commission (CAC) if the vendor or previous owner is a company incorporated under the Companies and Allied Matters Act. Aside from the land registry searches, a search at the CAC should be performed to determine whether or not the property is encumbered or has any other charges. Companies are required to file annual returns with the CAC on a yearly basis, which are always accompanied by a financial statement; the financial statement will reveal the company’s assets (where any exist) as well as any charges or encumbrances on same.
• Probate registry search – This is a search performed to determine whether or not probate has been granted on any estate and to identify the personal representatives or executors of a testator in cases of properties belonging to a deceased’s estate. The vendors lack the necessary authority to sell a deceased person’s property without a grant of Probate and/or letters of administration.
• Traditional evidence is obtained by investigating or verifying from the principal members of a family or from the community and heads of the community where the property is owned by the family or the community. It is critical to ensure that all necessary permissions have been obtained and that the title is not void or voidable.
• Court judgments – A search is conducted to determine whether the land is the subject of any court litigation, and if so, the outcome of the dispute; or whether the vendor is a personal representative or beneficiary in a probate dispute, entitling him to convey the property.
• Physical inspection – This is a personal visit to the property in question to determine if there is a problem with it or to determine the actual size of the land and whether it conforms to the dimensions on the survey plan at the Lands registry.
PREPARATION OF DEED OF ASSIGNMENT
After the purchaser has determined that the vendor has good title to the land through his solicitor, the next stage is the preparation and execution of a Deed of Assignment/Conveyance by the parties with respect to the property to be sold.
The Deed of Assignment can be prepared by the purchaser’s solicitor and vetted by the vendor’s or his solicitor, after which several copies (called engrossed copies) are produced, and the documents are signed by the parties and their witnesses. The Purchaser would pay any outstanding sums or balances at this point.
PERFECTION STAGE
Many people who are unaware of legal requirements believe that after executing deeds of assignment or conveyance, as the case may be, they have completed all of their obligations and can continue to enjoy their newly acquired property. However, much more work remains to be done to “perfect” the title to the newly acquired land. These include obtaining the Governor’s consent, paying stamp duties, and registering a conveyance or assignment with the Lands Registry. This is done to ensure compliance with relevant statutes and to protect the purchaser’s legal title to the property.
APPLICATION FOR THE GOVERNOR’S CONSENT
When it comes to landed property transactions, there are two types of Governor’s approval. The consent to mortgage is the approval to transfer part or all of a vendor’s interest in the landed property to a third party. When pledging a property as security for a credit facility, the latter is usually required.
The following are the necessary documents for obtaining a Governor’s Consent in Lagos State and, by extension, perfecting a title to land:
- A properly completed Land Form 1C application, dated and signed by the parties to the transaction and sworn to before a Magistrate or Notary Public.
- A cover letter from the Solicitor/Applicant submitting the Governor’s consent application.
- A certified original copy of the property’s title document.
- Make checks payable to the Lagos State Government for the charting fee, endorsement fee, and Form 1C.
- Four copies of the Deed of Assignment, each with survey plans attached.
- A photo of the property.
- A copy of the parties involved in the property transaction’s most recent tax clearance certificate.
All of these documents must be forwarded to the Surveyor General’s office for charting. If the survey plan is free of flaws, a clean report is sent to the Lands Bureau and the applicant is issued a demand notice for the following fees, which are percentages of the assessed value of the property.
The following fees are paid via bank draft in the name of the Lagos State Government, and receipts will be issued to the applicant as part of the process outlined below: 1.5% consent fees, 0.5% capital gains tax, 0.5% stamp duty, and 0.5% registration fees.
At the moment, the entire process of obtaining approval and perfecting a title in Lagos State takes at least three months if all assessments and required fees are paid as soon as possible and there are no queries or defects in the applicant’s file/documents. The State Government, on the other hand, has set a target period of 30 days.
The steps an applicant will need to take in perfecting a land title in Lagos State are as follows:
- Application and accompanying documents are to be received at the Land Bureau from the Applicant
- Application is uniquely referenced for identification purposes at the Lands Bureau
- Investigation of the status of the land through charting will be done at the office of the Surveyor General
- Assessment of Property to determine applicable fees by officials of the Lands Bureau