Every day, people lose money to real estate scams when they should be making money because they cannot identify red flags in property transaction.
The number one rule of investing in real estate is: ‘DON’T INVEST IN WHAT YOU DON’T KNOW’.
Many real estate investors are scared due to the sad stories they have heard or experiences from land fraudsters, because they are ignorant of too many terms flying around in property documentations leading to a fruitful transaction and they wonder what it all means. But, before you invest in real estate in Nigeria, how well do you know about real estate or land you want to buy?
Here is how to invest safely in real estate in Nigeria without getting scammed by requesting for the underlisted title documents in order to assist in conducting due diligence at the Lands Registry as follows:
Ask whether the land has Certificate of Occupancy (CofO):
- What is a Certificate of Occupancy or CofO?
A CofO is basically a land title document that is issued by the government to land owners. It serves primarily as a legal proof of land ownership in Nigeria. A Certificate of Occupancy (CofO) is a fundamental land title document in Nigeria. Certificate of occupancy issued by the Lagos State government officially leases Lagos land to you, the applicant, for 99 years, subject to renewal.
In the event that the land does not have a Certificate of Occupancy (CofO) then, the next step of conducting due diligence search is to:
Ask whether the land has government excision?
- What is Excision of Land?
Excision simply means free from government acquisition, thus CofO could be easily processed on such property. In land excision, state governments release land to indigenous peoples or settlers following legal protocols and processes. Since the Land Use Act was enacted, land excision has been used as a method for compensating the original landowners. A grantee who excises a piece of land maintains ownership and control of the land within the confines of local laws and regulations. Opposite of excision (in this context) is acquisition.
So, when a land has been excised, it means that the grantees have full authority over the land and can do as they wish within the confine of local laws and regulations.
The release of these lands to the original holders is captured in a legal government notice or publication that is officially known as a GAZETTE. For this reason, it is much easier to process the Certificate of Occupancy (CofO) on a land with an excision that is recorded in a land excision gazette.
In the event that the seller informs you that the land has a government or community or village excision, the next step of conducting due diligence search is to:
Ask for Government Official Gazette?
A Gazette is a publication by Government. However, in property law practice, a gazette is a publication of all the excisions granted to various communities with their attendant coordinates and boundaries. The Gazette has an NPV just like a c of o. If you have a client buying land in an area that has been “Gazetted” You quote the Gazette NPV (Number, Page and Volume), so that your client can obtain Governs consent upon perfection. This document is usually obtained at the Cabinet Office in Alausa, Lagos State.
Kindly note that a land that has been excised to a community or village is usually registered, recorded and published in Official Government Gazette. Thus, a land under village or community excision must be contained Official Government Gazette to authenticate that the government has released such land to the village or community and it is free for acquisition.
Ask for Governor’s Consent:
- What is Governor’s Consent?
Governor’s consent is a consent obtained from the governor of a state on a land transaction, without which will be deemed illegal in the eyes of the government and the law.
Unlike a C of O which is a document produced by the government and personally signed by the governor him/herself conferring right of occupancy unto the holder for 99 years, Governor’s Consent is appended on a page in a deed of assignment that is submitted by the assignee to the government informing the government that a transaction has taken place and they require the consent of the Governor for the transaction to be valid as required by the Land Use Act.
IT IS IMPORTATNT TO NOTE THAT
Some property sellers in a bid to market properties or land for quick sales, will say that the land or property has a “registered survey plan” as one of the title documents to back up the authenticity of the property or land, but unfortunately, a ‘registered survey plan’ cannot and do not pass title to land. The major purpose of a ‘registered survey plan’ is to confirm the location of the property or land and also to give some level of confidence that such land has a free hold interest, no restrictions from government and without any encumbrance which is suitable for purchase by a buyer.
Property sellers or marketers who parade Power of Attorney, Registered Survey Plan, Supreme Court Judgments and Family Receipts as documents to prove that such property or land has good title, are not being truthful and sincere to the prospective buyers, because these documents cannot pass title to a new buyer.
It is the duty of the property investor or buyer to engage the services of a lawyer to conduct due diligence search at the land registry to confirm the genuineness and authenticity of any land within a State. Thus, for any property or land to have good legal title suitable to be transferred to a buyer in accordance with the extant state laws, it must have certificate of occupancy, or governor’s consent, or official government gazette/community/village excision releasing such land for public purchase as these are the documents that can legally transfer title to land.
A duly executed Deed of Assignment backed up with certificate of occupancy or governor’s consent or official government gazette/community/village excision as well as attached registered survey plan are legal documents that can validly transfer title to land as such transaction with have approval of the state government upon presentation for registration at the land registry.
SUMMARY:
In summary, a checklist of things to do before investing in Nigerian real estate are:
- Avoid buying land or property without conducting due diligence search at the land registry,
- Do not buy any without a Certificate of Occupancy (CofO) or Governor’s Consent or Official Government Gazette,
- Before purchasing any land, make sure that there is a duly executed Deed of Assignment traceable to a Certificate of Occupancy (CofO) or Governor’s Consent or Official Government Gazette and obtain a registered survey plan as well as purchase receipt, if need be, to back up the transaction that fees or money has been paid for the land.
- It will not be an oversight to take a registered surveyor to the site of the property you want to buy to pick coordinates of the land in order to determine whether the land is under government acquisition or that the title has been revoked by the government.
- Do not buy any land under government acquisition to avoid stories that touches the heart.
To obtain Governor’s Consent over a landed property, the first person on a virgin land that has neither been occupied by another person nor under acquisition by the government is entitled to get a Certificate of Occupancy (CofO) on that piece of land.
If the person with CofO decides to sell his land to another person after so many years, the new buyer must now obtain the Consent of the Governor before that transaction can be deemed legal in the eyes of the law and government.
If the new buyer decides to sell the land again to a third owner in future, that third owner must also obtain a new Consent of the Governor before that transaction can be deemed legal in the eyes of the government and the process continues every time the property changes hands to a new buyer.
In other words, the first person on a land is the only person or group of persons entitled to obtain a Certificate of Occupancy. Every subsequent buyer of that property must get a Governor’s Consent.
Thus, there can only be one (1) owner of the Certificate of Occupancy on a land and it will not be replicated for another person once the land has been sold or transferred to another person.
CONCLUSION:
The Land Use Act says that all land belongs to the government and before any assignment of land, the Governor has to give his consent. In Nigeria, one of the means by which a person can get a proper title to land is by obtaining Governor’s Consent in respect to that land.
Section 22 of the Land Use Act provides that:
“It shall not be lawful for the holder of a statutory right of occupancy granted by the Governor to alienate his occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease or otherwise howsoever without the earlier consent of the Governor first obtained.”
Also, in the celebrated Supreme Court case of Idundun & Ors v. Okumagba & Ors (1976) 9-10 SC 227 at pp. 246-250, the held that there are five (5) ways a person may prove or establish title to property in Nigeria and these are
(1) By traditional evidence.
(2) By production of documents of title duly authenticated and executed.
(3) By acts of ownership extending over a sufficient length of time numerous and positive enough as to warrant the inference of true ownership.
(4) By acts of long possession and enjoyment; and
(5) Proof of possession of connected or adjacent land in circumstances rendering it probable that the owner of such connected or adjacent land would, in addition, be the owner of the land in dispute.
Usually, it is the duty of the holder of the right of occupancy to get the consent, but in practice this is left to the buyer, especially in Lagos State where this practice has been embraced over the years.
Finally, when governor’s consent is duly obtained by the seller after a transaction, it will serve two main purposes viz:
- It will serve as evidence of ownership in compliance with government regulations,
- It will serve as security and protection of legitimacy of the buyer’s title to the land.
Remember, that failure to get governor’s consent can make a transfer of interest in land null and void.
For further legal assistance on property and real estate transactions, do not hesitate to contact the author.
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