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Introduction
As more people and businesses flock to Lagos, Nigeria's commercial hub, the real estate sector has become one of the booming investment opportunities in Lagos State. The demand for land in Lagos has been on the rise. However, with this boom comes several complexities; land transactions in Lagos are often riddled with overlapping claims, hidden government acquisitions, and the notorious Omo-Onile (or land grabbers) demands. In such a high-demand market, buying land requires more than just choosing the right location; it requires a clear understanding of the legal landscape to ensure your investment is safe, valid, and future-proof.
Types of Land Ownership in Nigeria
Before the enactment of the Land Use Act, 1978 ("The Act"), landed properties were held by communities or communal leaders. With the passage of the Act, ownership of all lands in Nigeria is vested in the State Government.
From the foregoing, there are two main types of land ownership recognized under the LUA, namely:
- Communal Ownership of Land: This refers to land that is owned by an entire community and managed by its traditional leaders. The government recognizes this type of ownership through a Customary Right of Occupancy (CRO), which covers land the community already held before the Land Use Act (LUA) was passed.
- Leasehold Ownership: This is ownership of land granted on application to an individual by the government for ninety-nine (99) years, after which, the ownership of such land devolves to the government. Here, the Lessee can further apply for a lease renewal for another ninety-nine (99) years.
In both scenarios, the land owner is given a Certificate of Occupancy or a "C of O" as evidence of the applicable right of occupancy, whether customary or statutory.
Other Methods of Owning Land in Nigeria
- Assignment or Sale: The land owner has the right to assign or sell his ownership right to another person, with the consent of the Governor.
- By way of Gifts: In this case, the land owner gives the ownership of the land to another person as a gift.
- Through Inheritance: Here, the land owner can devise his ownership of that land to an heir or any other person through a Will or administration of the estate of a person who died intestate (i.e. without a will), with the governor's consent.
- Government Allocation.
Key Legal Considerations When Buying Land in Lagos State
- Engage Professionals: One of the most important steps to take when buying a property in Lagos or any other State in Nigeria is to engage professionals, whether they are lawyers or licensed surveyors, to greatly reduce your risk of fraud and avoid future disputes. It is pertinent to note that in Nigeria, only lawyers can prepare land documents.
- Consider the location of the land: As a buyer, you have to consider the location of the land—Is the land located in an urban or rural area? Is the land zoned for residential, commercial, industrial, or mixed-use purposes under Lagos State planning laws?
- Consider the costs involved: Aside from negotiating a fair purchase price, there are other costs in land transactions to consider. These include the cost for hiring lawyers and surveyors, stamp duties payment at the Lagos state Inland Revenue Service, registration costs at the land registry, and the Governor's consent fee.
- Consider your financing: Land transactions can be financed through personal savings, loans from banks, or cooperative societies. Each option has legal implications — for example, banks require registered titles before granting loans, as well as an equity contribution in order to secure a property through a mortgage. Whatever the source, ensure all agreements are documented and your title properly registered to secure your investment.
- Conduct due diligence: Due diligence in land transactions is a thorough investigation of the legitimacy of that land and identifying any potential issues or encumbrances with the land before committing to buy it. This usually involves inspecting the physical land, inspecting the title document, verifying the ownership history of the land at the land registry, and sometimes, even a background check on the seller. If sold by a company, verifying that the company is registered and that the sellers are bona fide officers of the company.
- Get A Survey Plan and Verify Boundaries: Engage a licensed surveyor to confirm the exact boundaries and status of the land. Only licensed surveyors can legally prepare and register survey plans with the Surveyor-General of the State where the land is located.
- Get Proper Documentation: After negotiating the price of the land and concluding on other terms, ensure that the seller documents the agreement in a contract for sale document. Your lawyer should also review the contract. Be sure to collect a receipt for deposits and other payments. Also, ensure you collect the registered survey plan and a Deed of Assignment prepared by your lawyer.
- Obtain the Governor's Consent: This is a crucial aspect of buying a landed property in Nigeria. To obtain the Governor's Consent in Lagos, the process begins with applying and sending the land documents to the Surveyor-General's office for charting, which determines the land's acquisition status. Once charting is completed and no defect is found, a clean report is sent to the Lands Bureau. Afterwards, the statutory fees payable are assessed, which typically include consent fee, stamp duty, and registration fee. After payment is made, a title number is issued, signifying that the Governor's Consent has been duly obtained.
- Pay Stamp Duties & Register your title document: This is also a crucial aspect of buying a landed property in Nigeria. After full payment of the purchase price and obtaining the Governor's consent, the assessed stamp duties and registration fees are to be paid at the appropriate departments in the Lagos State Land Bureau. The title document is duly stamped and given a unique registration number.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
