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Real Estate: Important Documents Relating to Real Property Transactions In Nigeria

One of the most common mistakes people make when thinking about buying real estate is that they do not consult a lawyer or get proper legal advice. 

Owning property goes deeper than just paying for the property alone, whether it’s land or a house. 

This is one of the major reasons why there are so many land/property disputes in Nigerian Courts today. 

While a lot of people get duped into paying for a defective property, a few others have taken time to do proper time to carry out due diligence to avoid stories.

WHAT IS IT REALLY?

Buying of land/property is the process by which ownership and title of land are transferred between the vendor/seller and the purchaser/buyer which may be for commercial or residential purposes. 

Before a buyer makes the move towards purchasing a property, there are certain issues that he and his lawyer have to consider and verify. 

Things like:

  • Physical inspection of the property to determine the size which can determine the purpose
  • The location of the property
  • Is the seller the bonafide owner?
  • The willingness of the bonafide owner to sell
  • If the seller is in possession of valid documents (especially if you are buying from a real estate agent or a third party)
  • If the owner has proof of root of title or can establish his root of the title (if buying from a family landowner)

If the answers provided are sufficient or there is enough proof that the property indeed rests with the rightful owner without any hindrances, then you’re safe and can do ahead with the transaction.

This article is geared towards providing you a helpful guide and lists out the  KEY documents you will need if you’re going to be involved in buying real estate of any kind in Nigeria. They are:

  1. Survey Plan
  2. Certificate of Occupancy
  3. Deed of Assignment/Conveyance
  4. Payment Receipt
  5. Deed of Lease
  6. Power of Attorney

Let’s take a closer look at each one.

1. SURVEY PLAN

A survey plan is a document indicating the size of the property in square meters, the location, and the borders. 

This is especially helpful in indicating whether the land is close to government property or access roads or under government acquisition. 

In Lagos state, it can be gotten by an application to the Surveyor-general at the Lagos State Land Bureau or the ministry of lands and housing in other locations.

2. CERTIFICATE OF OCCUPANCY

A certificate of occupancy is a document issued by a state governor to an applicant, leasing the land for 99 years.

A certificate of occupancy issued by a competent authority creates a prima facie evidence that the holder is an exclusive owner of the property and has been granted a statutory right of occupancy by the government. 

The procedure and requirement for the certificate of occupancy vary widely, especially depending on if it is a state-owned land or a non-state land.  

The requirements for a state-owned land includes the following documents:

  • A formal Letter addressed to the Executive Secretary, 
  • Evidence of Income Tax payment, 
  • Current development levy, 
  • A survey plan, 
  • A standard allocation form with a receipt, 
  • Four passport photographs with white background, 
  • All payment receipts of Land Charges and 
  • Vital information form. 

Non-state owned land requires the following process for application of a certificate of occupancy: 

  • Submitting an application and vital information form for Certificate of Occupancy,
  • A title search for previous registration and site inspection, 
  • Certificate of Occupancy Engrossment, 
  • Recommendation by a government official for the execution of Certificate of Occupancy, 
  • Execution of Certificate of Occupancy with stamp duty by the Commissioner for Stamp Duties, 
  • Certificate of Occupancy is registered by the  Land Registry, 
  • Collection of executed and 
  • Registered Certificate of Occupancy.

It is important to say this: Do not be carried away by the authenticity of the certificate of occupancy but also, be interested in how the vendor came by the property.

3. DEED OF ASSIGNMENT/CONVEYANCE

A deed of assignment is a very important document necessary for land/property transactions. 

It is a legal document whereby an assignor (seller) transfers ownership, title and interest of a property to an assignee (buyer). 

The document states:

  • the location of the property, 
  • the date of transfer, 
  • the consideration paid on the property, 
  • the description and size of the property. 

In some cases, it traces the family history with regards to how the land came to be in their possession till that moment when it is being sold accompanied by the different documents. 

It also contains a section for the Governor’s consent, especially when the consent of the Governor has not been gotten and the transaction is yet to be perfected for registration. 

The consent of the Governor is important because it is one of the processes needed for the perfection of an executed deed of assignment. 

Other processes necessary for the perfection of a deed includes stamping of the deed at the stamp duties office. 

The Governor’s consent should be gotten before stamping because if the Governor refuses to consent, the charge paid at the stamp office cannot be recovered. 

The last step necessary for perfecting an assignment is registration. 

Registration is important because it confers priority on the owner as the first in time will prevail. Registration also renders a deed of assignment admissible as evidence in court.

4. PAYMENT RECEIPT

A payment receipt is a document issued by the vendor (seller) to the purchaser (buyer) as proof that a transaction occurred. 

It shows that the seller acknowledges that he or she received payment for the land or property. 

There is often the mistaken belief that a receipt serves the same purpose as a deed of assignment. Most people feel that once a deed is issued, there is no need for a receipt. This is false. 

A receipt validates monetary payment while a deed indicates that ownership has been transferred.

5. DEED OF LEASE

A leasehold relationship exists between two or more people whereby one party lets out his property for use for a period, often with the payment of a consideration which is the rent and the observance of any condition or conditions contained in the deed of lease.

A deed of a lease is usually issued by a landlord or a leasor to a leasee for a term exceeding three years. 

The information contained in a lease is usually based on the agreement reached by both parties. 

6. POWER OF ATTORNEY

A power of attorney is a document that may be under seal, instructing a person (called a donee) to act on behalf of another person (called the donor) as an agent. 

A power of attorney seeks to satisfy third parties that the agent has the authority of the donor to deal with a subject matter. 

Such acts may include receiving and suing for rates and rents. 

It is important to state that a power attorney merely warrants and authorizes the donee to do certain acts on behalf of the donor and is not an instrument that confers title to the donee. 

Also, a power of attorney does not preclude the donor from exercising the powers donated. 

If anyone comes to state that he/she is acting on behalf of another person with respect to land/property transactions, you should demand to see a power of attorney document from him/her as proof.

CONCLUSION

The bottom line of this article is to encourage you to be extremely careful before they hastily purchase a land /property without carrying due diligence. 

Do a detailed background check on any property you’re thinking about investing in. 

It is also important to seek the advice of a legal practitioner/ lawyer before commencing and concluding property transactions. 

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