Things to check before buying land in Nigeria
You want to buy a land in Nigeria, and the reason is simply because of the fact that you have acquired the money. It is marvelous, really, because land is the best piece of investment a person can chuck his money into. Land, unlike other investment, can only appreciate in value over the years; it can never depreciate. Its value only goes up, not down.
NB: this is a very long post about the entirety of what you need to know about making land purchases in Nigeria, so be warned that you might stay on this page longer than you think.
However, before you rush off to make that purchase of the land and transfer all your life savings into the account of a total stranger all simply because of the fact that he told you that he is the legal owner of the land, there are certain factors you have to check in before you pay. It is called Legal Due Diligence. If you do not conduct your Due Diligence, you may succeed in buying the land, but you will definitely suffer for it in the years to come.
The Need for Legal Due Diligence in Land Transactions.
Many people think that they can play smart and pull of a land transaction without contracting the services of a certified professional in the field to handle certain matters for them. Well, they are wrong.
When trying to delve into a land transaction, the purchaser should endeavor to contract the services of these two sets of individuals:
1 A legal practitioner
2 An estate surveyor/ valuer
A legal practitioner, if and when consulted in a land purchase transaction, is the one responsible for conducting the legal due diligence on the land the purchaser intends to purchase. He is the person that will look into certain matters pertaining to the land:
Ø He is the one to request for the epitome and abstract of title from the vendor
Ø He is the one to check for patent and latent defects on the land
Ø He is the one to check court records, probate registry records, conduct land registry search, amongst others, and then prepare the search report in which he will give his client either the go-ahead to purchase the land or the advise to keep his money
Ø He is the one to help negotiate the terms of payment for the land (if the purchaser is buying from estate agents, he can negotiate for a payment scheme to be followed which will be favorable to the means of the client)
Ø He is the person to check out a lot of details about the land which the purchaser may have absolutely no knowledge of prior to entering into the transaction
Ø Lastly, he is the person to prepare the Deed of Assignment; and this is because the law authorizes only a legal practitioner to be the person to prepare a Deed of Assignment and frank same. No other person can prepare a Deed of Assignment to effect transfer of ownership in a land from vendor to purchaser, so you see why you have to sign on the services of a legal practitioner?
Reasons to conduct Due Diligence in Land transactions in Nigeria
There are several reasons why a prospective buyer of land should undertake due diligence in respect of the property he wants to purchase. These reasons are underlisted below:
u It will reveal the true owner of the property in question. This is essential because of the fact that several persons can easily pose as the true owners of a property whereas they are merely fronts looking to rip purchasers off their money. If the prospective purchaser undertakes due diligence, then he can easily detect this. NB; it is better to have the lawyer do this because he knows the necessary questions to ask and the documents to demand for which the purchaser ordinarily would have no inkling of.
u It will help the purchase to detect the physical defects in the property he wants to purchase from an estate agent or land owner.
u It will help the purchaser the to detect/uncover hidden fees and taxes which remain unpaid. Please note that certain rates and land use charges run with the land and not with the occupant of the land. In other words, if there are taxes, rates, land use charges that remain unpaid as at the time of the intended purchase of the land and the land is eventually purchased, the new owner will have to pay it. But if he undertook due diligence, then he would have taken note of these unpaid rates and possibly worked out an arrangement with the vendor to deduct same from the purchase price. If he didn’t . . . well, he will still have to pay them. It is not the government’s business that the rates were left unpaid by the previous owner of the property.
How to Conduct Due Diligence for a land purchase in Nigeria
- Request for the owners documents: This is generally the first step. Your lawyer can request for the epitome and abstract of title of the vendor which will have to be in chronological order and date back at least a period of forty years from the time of the proposed transaction. These documents are:
- a) The certificate of occupancy (where applicable; if the land is an urban area)
- b) Deed of Assignment
- c) Power of Attorney (especially if the vendor is not the main owner of the land eg, family land)
- d) Owner’s receipts
- e) Vendor’s tax clearance certificates dating back a period of at least three years from the date of the transaction
NB: please consult a property lawyer for this. I know that many people think that they can do a lot of these themselves. In the short run, you can; in the long run, you will end up running into a hell lot of trouble for your efforts and then you will wish you had used a lawyer in the first place.
- undertake a physical inspection of the land. Estate agents can use very nice digital cameras to show you stunning shots of the land you want to purchase. However, in some cases, the reality may be a far cry from what you saw. So, before you commit yourself financially to purchasing any piece of land, make sure you go to the land and physically inspect it yourself or send a trusted associate/representative to do same for you.
- check the zoning and town planning laws of the location where you are purchasing the land. I cannot begin to stress this enough. Please have your lawyer look over the town planning laws of the area you want to purchase land from. This will save you a lot of trouble and help you avoid pitfalls like building an industry in an area designated for residential purchases only; building a four-story building in an area where the planning permits you to erect structures not above two stories. Or buying land already designated for building a road; buying land which is superimposed over a proposed waterway. The list is endless. Like they say, the windmills of the gods grinds slowly but surely. So you might buy and build, but one day the government will come and then you will pay the costly price. Then you will watch your structure demolished or have to pay hefty bribes to corrupt government officials in order for them to turn a blind eye to your ‘illegal’ structure.
- ESTATE VALUATION. In the preceding paragraphs I stressed that you also need an estate valuer/surveyor in a land transaction. This is where they come in. Engage the services of an estate valuer to value the market value of the land you want to purchase. The price of a piece of land in Banana Island will never be the same with that of a land situated at Isheri even if they are of the same exact dimensions. So, it will save you a lot of costs to find out the market value of the land you want to purchase in case you might want to sell the same in the not-so-distant future or use same as collateral for a mortgage loan. Then you will find out that the land is priced at a considerably lower price than you had originally bought.
The Estate Surveyor is the one to check if the land is properly in a grid and properly marked out. Ever encountered a scenario where you see road construction workers marking a particular section of a building to be torn down because it lies directly in the path where they want to build a road? Yes, ouch. Goes to show that some people really do not value their money before building. You need the services of an estate surveyor too just like you need that of a lawyer.
It is the job of the Estate Surveyor to survey the coordinates of the land, insert back the land beacons after the survey, and then file for Land Information at the office of the Surveyor-General of the State. Note that some Estate Surveyors can be dubious, so ensure you utilize the services of someone trustworthy and professional. If and when in doubt, then use a surveyor from the office of the Surveyor General.
Afterwards, the Surveyor General will issue a Land Information Certificate, which will showcase whether the land is a committed land; one to be used by the Government for whatever purpose. Or, if the land is free, it will be showcased there on the Land Information Certificate.
Finally, after you complete the transaction, you make sure that you collect all the necessary documents from the vendor; the documents to be collected are the original copies, not photocopies.
Like I always say, when in doubt, ask questions. In this case, consult your lawyer. You can contact me using the contact form below, or here, or via my email. I will be glad to be of help to you.
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© 2017 by Kingsley Ugochukwu Ani Esq.
About the Author:
Kingsley Ugochukwu Ani Esq. is a legal practitioner, blogger, corporate branding expert, and human rights activist living and working in Lagos, Nigeria. You can contact him via +2347035074930, email@example.com or on Linkedin, Facebook, and connect with him on Twitter.
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