Meridian Solicitors

GENERAL OVERVIEW OF PROPERTY LAW AND PROPERTY TRANSACTION IN NIGERIA

THE VARIOUS LAWS THAT HAVE DIRECT IMPACT ON PROPERTY TRANSACTIONS IN NIGERIA ARE:
• The 1999 Constitution – The constitution affects property as regards to section 43 which provides for the right of every citizen to acquire and own immovable property anywhere in Nigeria.

• Land Use Act 1978 – An Act to Vest all Land compromised in the territory of each State (except land vested in the Federal government or its agencies) solely in the Governor of the State, who would hold such Land in trust for the people and would henceforth be responsible for allocation of land in all urban areas to individuals resident in the State and to organisations for residential, agriculture, commercial and other purposes while similar powers will with respect to non urban areas are conferred on Local Governments. Section 1 provides that the Governor of each state shall hold the land comprised in such State upon Trust and administer same for the use and common benefit of all Nigerians. This actually gave birth to the acquisition of Certificate of Occupancy in Nigeria, what private individuals have on the land is a right of occupancy. This is the greatest and highest legal interest a holder can have in Nigeria.

• Property and Conveyancing Law (PCL) 1959 – This is enacted by Western region of Nigeria commonly referred to as PCL. The most important features of this law is that no sale of land shall be enforced except there is a note of memorandum in writing containing the terms of the sale and signed by the person to be charged – Section 67(1) of PCL; all conveyances of land or interests in land for the purposes of creating any legal estate are void unless they are made by deed – Section 77(1) and 78(1) of PCL; where a person executes a deed, he shall either sign or place his mark on it and sealing alone is not sufficient – Section 97(1) of PCL; and the right to create leases are safeguarded so long as certain elements exist in it – Section 79(2) of PCL.

• Stamp Duties Act/Law 2004 – There is a Stamp Duty Act for every State and FCT which provides for the procedure for stamping of documents. Duty on land within the control of the State is paid to State Internal Revenue Service. Stamping of documents should be within 30 days of the ex*****on of the document though it may be stamped out of time, which will attract penalty.
• Illiterate Protection Laws (IPL) 1994 – This is a law made to protect illiterate persons involved in transactions generally. “It is like a very wide umbrella and covers all forms of writing or document written at the request of an illiterate person”. Any person who shall write any letter or document, at the request on behalf or in the name of an illiterate person shall also write on such letter or other document his own name as the writer and his address. The importance of this protection is for the benefit of the illiterate person. Further, where the illiterate person is to sign or to make a mark, the document must be read over and explained to him. The object of this law is to protect an illiterate person from possible fraud.
• Registration of Titles Law 2004 – This is under Cap. R4, Laws of Lagos State which requires titles to land to be registered as first or subsequent registrations. The principal purpose of this law is for the State to guarantee titles that have been investigated and registered by the Registrar of titles so that purchasers of land can rely on it in determining if the vendor has title to sell the property and the encumbrances that attach to the land.
• Administration of Estates Laws of States - This law regulates the administration of the estate of a deceased person who dies intestate or testate. The law substitutes local provision on intestate succession with English law on intestate.
• Companies and Allied Matters Act (CAMA) – The Act permits registered companies under the Act to mortgage their properties by the creation of debentures over the assets of the company. Section 166 of the Act states that a company may borrow money for the purpose of its business or objects and may mortgage or charge its undertaking, property and uncalled capital and issue debentures, debenture stocks and other securities for any debt, liability or obligation of the company. ‘Property’ in the section includes land or any interest in land which the company has.

WHAT YOU NEED TO KNOW BEFORE MAKING PAYMENT IN LAND TRANSACTION
1. You must be sure that the vendor of the property is really entitled to sell it. You need to ensure that vendor proves that his title to the land is good and that he can pass to you the land/ property which he is offering to sell.
2. You must know whether any third parties have rights to the land which might interfere with his intended use of it. These third-party rights might include covenants restricting usage, a right of way, tree preservation order, or even mortgages.
3. You must know the exact size of the land by physical inspection and sighting of survey plan.
4. You need to ascertain the genuineness of the legal papers available in respect of the land.
5. Finally, you need to ascertain that there is no dispute over the property.

WAYS TO ASCERTAIN THE GENUINENESS OF THE PROPERTY

1. SEARCHES AT THE LANDS REGISTRY – The Land Instrument Registration Law of each State establishes a land registry for the State, where documents relating to land within the territory are kept, and it varies from one State to another. The procedure in conducting the search varies from state to state; to save you the stress get a lawyer that can assist you in conducting the search. Note that some properties are not registered and such properties will have no record at the Lands Registry.
2. SEARCH AT THE COMPANIES REGISTRY – This is situations where the vendor or past owner is a company incorporated under CAMA (a Company registered in Nigeria), apart from the searches at the land registry, there should be a further search at the Corporate Affairs Commission.
3. SEARCH AT PROBATE REGISTRY – This is a search conducted to reveal whether or not probate has been granted and who are the personal representatives. This is important in a situation where the owner of the property is deceased and a Letter of Administration has been obtained or is being processed.
4. TRADITIONAL EVIDENCE – This is a search conducted on the principal members of a family land or on the community and heads of the community where the property is not subject to family or community ownership, to confirm that all relevant consents were obtained and that the title is neither void nor voidable.
5. PHYSICAL INSPECTION – This is a personal visit to the property in question in order to find out from neighbours if there is any issue, or to find out for yourself the actual size of the land and whether it conform to the dimensions of the land registry or survey plan if any.
6. COURT JUDGMENTS OR PENDING LITIGATION – This is a search conducted at the Court Registry to see if the land is subject to any court litigation, and if any, the outcome of the dispute.

DOCUMENTS REQUIRED FOR LAND PURCHASE IN NIGERIA.
During the process of purchasing a land, there a number of crucial documents required from the seller in order to effectively validate the transaction. These documents are necessary as they are evident of title which the buyer possesses in relation to the land. It is important to note that there are different types of land documents in Nigeria. These documents include:
i. Approved survey plan: This is an important title document that helps to reveal the true ownership status in any land and landed properties’ transactions. It also helps to reveal if such land is not under any government acquired or committed lands/area.
ii. Approved layout:
iii. Title Documents such as; Deed of Assignment/ Land Sale Agreement/C of O, Deed of Gift, Deed of Conveyance etc: These are very important documents that must be demanded and given to a purchaser after the conclusion of any land/property transaction between such purchaser/buyer and the owner/seller of the land/landed property in question.
iv. Purchase receipt: this is the evidence of due payment of the purchase of the land, it gives the vendor an equitable right on the land.
These documents are essential as they are necessary to process a search in the land registry and they are use during the registration of title, as well as registration of Certificate of Occupancy. It is equally important to note that these documents are to be registered in the land registry of various states but very few purchasers do register their title due to the cost effect. Non-registration of land documents makes them lose priority against registered ones affecting the same land.

TITLE DOCUMENTS IN LAND TRANSACTION
In the course of property transaction different kinds of documents are transferred from one person to another as title document. The most common of Title documents are:
A. Land Sale Agreement: Sale deed is the document prepared at the time of full payment made by the buyer and when the actual transfer of the property takes place.
B. Deed of Conveyance: The term conveyance refers to the act of transferring property from one party to another, so a Deed of Conveyance is an instrument that transfer ownership of land to another.
C. Certificate of Occupancy: A Certificate of Occupancy is a land title document issued to an individual by the Government as legal proof of land ownership in Nigeria. The Government can seize a plot of land or property without a C of O at any time without any compensation paid.
D. Deed of Assignment: This is common and vital document in property transaction, it is use to assign interest in land with a pact binding on the parties who entered into it.
E. Deed of Lease: It is use where one party gives out or lets out his/her property to another person to use for a period over 3 years in consideration of rent.
F. Deed of Gift: It is use to transfer an interest in land voluntarily to another without any consideration.
G. Power of Attorney coupled with interest in land: It is use to authorize another person as agent to pass title in land.
H. Deed of Mortgage: It is use where owner of estate in land uses the land as collateral to secure a sum of money majorly from banks.
The above documents must be registered within 60 days of ex*****on; it is amazing when people purchase property and neglect to spend on the registration of the document or processing for the Certificate of Occupancy as the case may be, most especially where the property is in a developed area.

3 MAJOR IMPORTANCE OF REGISTERING DOCUMENTS THAT ALIENATE LAND:
1. The presence and evidence of registration will put an intended buyer of land to be cautious and hint him/her on the identity of the real owner of the property.
2. Where such documents are not registered they are inadmissible in evidence in any court in Nigeria. The unregistered document can only serve as receipt of payment not title to land.
3. Where there are other rival Deeds that are registered in respect of the same property, the first in time will be reckoned with.
So, it is very essential and advisable to engage a lawyer when one intends to buy a land or acquire a property.

Dear esteemed clients,

We sincerely appreciate the trust and confidence you have in us. Thank you for being part of our 2021.

We are committed to serving you professionally with dignity and respect.

Wishing you a more prosperous 2022!