This article is the first of a series on the steps to be taken before you acquire a property in Lagos. From the legal frame work to the land acquisition procedures till you put paid to your real estate investment.
The basic legal framework for the acquisition of land in Nigeria is the Land Use Act, Laws of the federation of Nigeria 1990. This Act vests all land comprised in the territory of each state (except land vested in the Federal Government or its Agencies) solely in the Governor of the state, as trustee of the people.
The state is responsible for allocation of land in urban areas to individual’s resident in the state and to organizations for residential, agricultural, commercial and other purpose. Similar powers with respect to non- urban areas are conferred on Local Governments. By virtue of this Act, ownership vests in the governor while only a statutory or customary right to occupy land is given to a person for a maximum of 99years. The control and management of land is administered through the Land Use and Allocation Committee acting as an advisory committee in transactions affecting land.
It is therefore a requirement of law to obtain the consent of the governor for any assignment of title to land in accordance with the Act. Section 22 which provides as follows:
“It shall not be lawful for the holder of a Statutory Right of Occupancy granted by the Governor to alienate his right of occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease or otherwise howsoever without the consent of the Governor first had and obtained.”
This provision does not make an agreement to alienate unlawful, but makes such an agreement conditional upon necessary consent being obtained. Therefore, a clause to cater for obtaining the governor’s consent is usually inserted into the agreement, as follows:
“this agreement is conditional upon the vendor securing the governor’s consent under the Land Use Act, 1978. The purchaser shall solely be responsible for all expenses in obtaining the governor’s consent to the transaction”
The legal consequence of default in obtaining consent is that rights of the parties will remain inchoate and the parties cannot hold themselves to the bargain as the purported sale or transfer is void and of no effect.
Acquisition of land and its documentation involves a number of procedures that call for due diligence and caution on the part of the purchaser. Retaining the services of a good professional could help get through these procedures in the best interest of the purchaser.
The purchaser’s lawyer will usually carry out the investigations of title of the vendor and all other processes prior to the purchase of the land (payment of the purchase sum).
The primary objective at this stage is to ascertain that the vendor has a good root of title. A good root of title in this context means the following:
1. That the vendor is the rightful (beneficial) owner of the land.
2. That the land is free from any encumbrance or pending litigation.
3. That the land is not the subject of any government acquisition.
4. That the land is not subject to any of the overriding interests in land (e.g. short leases, easements, licenses, road or right of way).
5. That the vendors are acting in good faith (for instance where the land is family owned land)
Investigation of title is carried out at the lands registry or new towns development authority (whichever is applicable) by the purchaser’s solicitor shortly after inspection and expression of interest in the land using copies of the key title documents, evidence of payment of levies, approved building plans, survey plans, excision plans, etc. Sometimes investigations may include visiting the neighbours to the property and making direct enquiries in respect of the land in question.
If the property falls within the excision area (i.e. areas exempted from government acquisition such as Ajah and its environs), the investigation will include the verification of the red copy of the “excision plan of the layout” where property is situated. The excision plan itself is a vital document and a pre-requisite for registration of title to property at the lands registry. Very often, an area covered by an excision plan will also be published in the government gazette for the avoidance of doubt.
It is always prudent to verify the excision plan by re-confirming the survey beacons around the land. Where there is no excision plan, an application for the approval and registration of one will have to be made to the state government in the prescribed form by the original title holder/ beneficiary of the government excision. The process is usually an expensive procedure depending on the size of the property and the valuation of the property.
With this insight into various aspects of interest for would-be investors in the sector with reference to Nigeria’s commercial capital – Lagos State, it should be noted however that save for minor differences the same practices apply in most other states of the Nigerian Federation.
Next issue we will be discussing is the process of purchase/acquisition transaction of the supposed property.
to be continued…
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