CAUTIONS AND PRECAUTIONS IN LAND TRANSACTIONS

Land is, undoubtedly a fundamental necessity of life. It remains the foundation/framework within which the social, political and economic activities of a society must function. No society can exist without land. We cannot over-emphasize the need to make investigations prior to determining whether or not to purchase a real property. Your enquiries revolves around whether the land is not being contested, what purposes its being used for currently and if this coincides with your own intended purpose upon purchase. Ultimately, the kind of questions to be asked depends inter alia on the location of the land, whether the vendor has registered his title or acquired same customarily or taken any step(s) towards perfecting such title.

Apart from the afore-mentioned, another major step to take is to confirm from the land registry or surveyor-general’s office of the state where the land in question is located to confirm whether or not the land is free from all encumbrances. The implication of this is to the effect that where there is any encumbrance whether conflicting interests or possibility of government future compulsory acquisition or other foreseeable hindrances, it is advisable to let go of the property. On the other hand, where such land is free from all encumbrances, the bonafide purchaser should immediately take steps towards perfecting his own title.

What does it mean to perfect a title to land? “Perfection of Land Title” simply means registering a title (or interest in a property) with the government. When purchasing a property, to be sure that what is being bought is genuine and will not be sold to anyone else after making payments, it is important for the buyer of the property to obtain proper title if none existed before, or perfect the title if the one already exist in the buyer’s favour.

By virtue of the Land Use Act in Nigeria (this is the law regulating land property usages and transactions), if a property has a Certificate of Occupancy which makes the beneficiary the legal interest holder on the land, if he decides to resell or do anything with the property, since the land is held in trust by the State Government, the Governor needs to approve that transaction. All these transactions must be assented to by the Governor of State.

For a seller to establish his title to a prospective buyer of land in Lagos State, for example: a seller may present before the buyer any of the following piece of evidence;

  1. That he is the traditional owner of the land by way of customary inheritance i.e. on partition of family property or that his ancestor and predecessor-in-title owned the land from time immemorial and had been in uninterrupted possession before the Land Use Act and that he is therefore the person entitled to the right of occupancy in respect of the land. He is, in the eyes of the law, a deemed holder of the right of occupancy.
  1. That he has been in occupation and possession of the land prior to the Land Use Act by virtue of a Deed of Conveyance which must have been duly registered at the Lands Registry.
  1. That he is the beneficiary under a Will or Letters of Administration covering the land or property in which case he is the person entitled to the grant of the statutory right of occupancy. It must however, be observed that due care must be exercised by the prospective purchaser and his solicitor in confirming whether the Will has been genuinely admitted to Probate or whether the Letters of Administration was properly issued by the appropriate Probate Registry and there is no objection to the appointment of the Administrator is defective or invalidated as a result of objections being raised in respect thereto, the purchaser would have bought nothing as the sale would be void ab initio.
  1. That he has applied to the Governor of the state and been validly granted a Certificate of Occupancy. Undoubtedly, this represents the most popular and preferred mode of proving title to a piece of land in Lagos State. Although the Certificate of Occupancy is, in itself, not entirely unimpeachable, it still represents the most reliable method of establishing ownership.
  2. That he possesses a Deed of Assignment in respect of the land granted to him by an Assignor who was the holder of a Certificate of Occupancy. The Deed of Assignment must have been duly stamped at the Stamp Duties Office and registered at the Lands Registry after the consent of the State Governor must have been obtained. Failure to obtain Governor’s consent to the Deed of Assignment renders the Deed void.

REGISTRATION OF INTEREST IN REAL PROPERTY

Purchasers of Real property are of the mistaken opinion that provision of a deed of assignment by a vendor passes good title and that in its self finalizes a purchase but this is not true. It is essential that a purchaser perfects a purchase by registering the acquired interest in that property as it is only when the State or Federal government has consented to a sale where there is an existing right of occupancy that the sale can be said to be concluded and a valid transfer of interest done.

It is also for the benefit of the purchaser who should with immediate effect commence the registration of title as this will offer protection from any fraudulent seller or mischevious 3rd party and protect the legal interest of the purchaser.

To register interest acquired from a purchase it is essential to have a valid transfer document (Deed of Assignment). The Deed must contain essential elements like the names of the parties and their designation, the root title, the nature of interest being passed, adequate description of the property- this includes type of property, size, value of the property, survey plan number, location, signature, date, and provision of space for the Governors consent.

In Lagos State, there should be 4 copies of the executed Deed of Assignment with a registered survey plan attached to each Deed and enclosed with the following documents for an application to obtain Governors consent:

  • Dated letter of application with address and telephone numbers
  • Completed Form 1c
  • Certified true copy of Title of vendor
  • Vendors tax clearance certificate
  • Purchaser’s tax clearance certificate
  • Evidence of payment of charting & endorsement fee.
  • Photograph of the property
  • Means of Identification of the Purchaser
  • Evidence of lodgment of survey plan at the Surveyor-General’s office.

 

After the application is submitted and it is found that all the documents are valid, an assessment on fees payable will be calculated. The fees to be paid include capital gains tax, stamp duty, consent fee.

 

When evidence of payment is provided the Deed will be processed for Governor’s consent after which a purchaser may then register that deed at the Lands Registry.

 

It is only after these processes have been complied with can one be rest-assured of the validity of a purchase.

 

It is worthy of note that the name and signature of the lawyer must be on the Deed of Assignment before it can be accepted by the Lands registry for procession of governors consent.

 

Also note that an unregistered Deed of Assignment is an inadmissible document in court.

 

As usual, we look forward to your questions and comments on this issue or any other property related matter.