CHALLENGES OF DEALING WITH AGENTS

I was discussing with a friend who seemed to have loads of issues with Real Estate Agents and i requested that he wrote what his challenges were and how to solve them and this is what he sent:

“My wife is 6 months pregnant with triplets. I was shocked when we found out and in 3 months we will be a family of 5 with many visitors to celebrate with us. Presently we stay in a 1 bedroom apartment and we need to move to a bigger apartment that can accommodate the whole family. I have to put my taste to test, I think I will go for a 4 bedroom detached house so my kids can play in the compound, my wife and i can have our own room, another for the triplets and then my mom or mother-in-law, relative or friends. I made my requests known to agents to search for accommodation for my new family. My specifications were clear in terms of location, size, budget and rental period. And I still had the following challenges with Agents:

  1. Engaged two agents who requested that i pay a certain amount to mobilize them to look for a property for me and this does not take away from their expected agency fee afterwards. I paid but they were disengaged for non-performance.
  2. Meeting with a long chain of agents. One of the agents took me to another agent who took us to another agent who introduced us to a security who then directs us to another security who knows the owner(all this at your expense – time and money). Only to be informed by the owner that the property has been taken by another tenant (what a waste of time!!)
  3. Agents are only after the fees, when a client makes payment they varnish without rendering after-acquisition services.
  4. They do not verify property documentation for authenticity of ownership.

I believe it can actually be made easier and smooth to get a client a befitting apartment without much stress using the below recommendations:

  1. Reduce the long Agency Chain. The client does not need to know there are 1000 agents involved in a transaction such actually discourages the client. Transactions should be agent- client – property owner. To keep the peace it may be advised that Agents should have a preexisting written agreement, where there is a long chain of agents involved, with other agents on fees as that will ease the client dealing with so many people.
  1. Communication/visitation: a preferred mode of communication suitable to the client should be established either phone calls, emails or social platforms. A fixed time and date which all the parties involved will be available to meet should be agreed and the agent should confirm availability of all parties before parties set out.
  2. An agent should understand the clients request in order to be able to advise in terms of location, price etc., and also negotiate favorably on the client’s behalf. Advise in terms of contract clauses which should be fair to the client and also go as far as negotiating a rent free period for his client e.g negotiate 2 weeks rent free period for your client to make modifications, where necessary or at least to pack and settle in.
  3. Agents should verify the authenticity of a property document to ensure that the genuine owner is who is being related with and also do some due diligence to ensure that there is no court matter or any form of encumbrance on the property.
  4. Agents should have a database of their client with their contact details and program a reminder for quarterly follow-up call on satisfaction (between landlord and Client or vise versa) of the property and with this follow up it gives a client value for the services from the Agent. With this follow up you have provided value which is your after-rental service to the landlord and Tenant. You gain in 2 ways when the tenant is searching for another apartment and also you are made aware of the landlords vacant property. Your preexisting relationship with the Landlord and Tenant helps you to understand them better and know how to satisfy them.

Agents have to be real with Real Estates as it only when you are real and really satisfy clients that you can make real cash.”

As an agent I particularly find the long chains insane and do not like to work with Agents that long chains. Agents have to focus less on body counts (quantity of clients) to quality & sales.

I find the tips given by the writer very helpful and hope you do too, as an agent or a client. Have a great read and share your experiences with agents with us.

Written by:

Braimah Suleman Igekie
SKYPE: braimah01

OF LAND AND ITS UTILITY

Unknown

Land – as an asset

Investment in real property is a conscious venture investors need to make. Land is real estate or property, minus buildings and equipment that does not occur in a natural way. Land ownership may offer the title holder the right to natural resources on the land.

The term land can be looked at in a number of ways, and its definition viewed differently depending on the nature under which it is analyzed. The basic concept of land is it is a piece of earth, namely a piece of property that has an owner. Land is inclusive of all physical elements, bestowed by nature, to a specific area or piece of property. This includes environment, fields, forests, minerals, climate, animals and bodies or sources of water. In terms of being an asset, land includes anything that is on the ground, which means buildings; trees and water are a part of land as an asset. This is the reason banks, property consultants, investors, financial experts and financial institutions are extremely attracted to land because it is one of the oldest form of security and because it cannot be moved, stolen, wasted or destroyed. Air and space rights are also covered by the term.

Land, as a resource

There is a wealth of natural resources that may be present on a property or piece of land that the owner, or title holder, may be entitled to. This includes plants, human and animal life, soil, minerals, geographical location, electromagnetic features and geophysical occurrences. Whenever any resource or reserve is traceable to a land, it is of great value. Drilling and oil companies, in many instances, pay landowners substantial sums of money for the privilege of using an owner’s land to access such natural resources, as well as shell out small fortunes for large acreages of access, specifically if the land is rich in a specific resource.

Land, as security 

When applying for mortgages or any other loan, most lenders ask borrowers to list personal property values on a financial statement. This overview gives prospective creditors a proper measure of personal net worth and how firmly a credit applicant is positioned to repay debt. Individuals seeking the extension of credit are asked to assess the fair market value of personal property. Fair market value reflects the price a reasonable buyer is willing to pay for a particular item.

Some personal property assets, such as furniture, clothing, and automobiles, tend to depreciate. Other movable assets, such as collectibles and antiques, often appreciate in value. When assessing creditworthiness, lenders consider the total value of personal property added to real property and financial assets. The total assets are weighed against what an applicant owes to determine risk assumed by the lender in extending credit.

Of all the properties of available, special recourse is made to real property and a high premium is placed on it depicting its immense value. The extent of value accrued to a land or real property is largely determined amongst others by whether the land has been registered or title of its owner has been perfected or not.

CAUTIONS AND PRECAUTIONS  IN LAND TRANSACTIONS 2

I have mentioned it once and again I emphasize the importance of engaging professionals when coming into a real property transactions. Certainly when experts are engaged you will get qualitative services and not land into troubles. Grey areas become exposed and expounded to you. My general advice is for no one to sacrifice professionalism because of its attendant fees, when you do so, you pay far more by the likely damage and mess you may find yourself afterwards.

It is important that the document being presented by the seller to the prospective buyer must have been registered at the Lands Registry. This is because any document that creates or purports to create any interest in land must be registered at the Lands Registry. The registration makes it a public document under the Evidence Act and if the original copy is lost or destroyed, the certified true copy can be used in appropriate cases.

When a document is registered, the registration constitutes a notice to the whole world of the interest in the land to which the land/document relates. However, if there is any defect in the title of the person in whose name the document has been registered, the defect in the title cannot be cured by the registration.

Where it comes to the issue of priority, determination would depend on the time of registration. If X and Y had purchased the same parcel of land from Z and X registers his own document before Y, the document of X shall have priority over that of Y unless Y can establish that he purchased the land from Z before X and had entered into possession of the land immediately after the purchase of the land from Z and X has knowledge of his interest, he may lose the land to X who has registered his own interest.

PROOF OF TITLE TO LAND

To establish his title to a prospective buyer of land in Lagos State, 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. If 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.

Where no such legal document is available at the time of receipt apart from Receipts upon acknowledging payments, a bonafide purchaser’s interest is therefore protection upon the preparation of the necessary legal documents by his Lawyer and other professionals and such documents are further registered in the land’s registry.

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.

RIGHTS, TITLE & BENEFITS IN REAL PROPERTY

 

A bundle of rights is a broad term used to organize property rights (as they relate to real estate); a bundle of rights is comprised of five different rights of the property owner: the rights to possess, control, enjoy, exclude and dispose. The right to possess is the right to occupy the property. The right to control is the right to determine interests and uses for others. The right to enjoy is the right to use the property without outside interference. The right to exclude is the right to refuse others’ interests or uses for the property. The right to dispose is the right to determine how and determine whether or not to sell the property to another party.

Right of Possession

The right of possession refers to the rights given to the title holder of a particular property. These rights may be limited in certain instances, such as when a title holder fails to pay required property taxes, but in most regards, the title holder is considered the owner of the property.

Right of Control

The right of control allows the title holder the ability to manage the use of the property in any means deemed legal within the jurisdiction in which the property exists provided the right to control does not encroach on rights of other adjourning land or home owners.

Right of Exclusion

The right of exclusion allows the title holder to limit who may or may not enter the property. This applies to most situations except when certain easements are in place, or when a warrant authorizing the search of the property is properly issued and served by agents of the law enforcement agency.

Right of Enjoyment

The right to enjoyment asserts the title holder’s right to participate in any activities he finds pleasurable while on the property. The activities in question must fall within the confines of the law and most not override rights of other land/home owners within the same neighborhood.

Right of Disposition

The right of disposition confers on the title holder power to transfer ownership, either permanently or temporarily, to another qualified party at will provided that in cases where there is joint ownership such as a family land/property, all the principal members of family assent to the sale or transfer.

Acquisition and retaining title to land all over the world have always been a very contentious matter which sometime results to violence. In Nigeria, prior to 1978, all land belonged to the communities in which the land is situated. This practice resulted in a lot of fraud, corruption and nepotism by the land owners who were usually represented by the elders of the communities who held the land in trust for the people. The Nigerian Military Government at the time therefore promulgated the Lands Use Act, 1978 (the Land Use Law) to remedy some of these hardships in the old land ownership system.

A major provision of the Land Use Law is that all land in the urban area are held in trust for the entire people of that State by the Governor of that State whilst land in rural areas are held in trust for the entire community by the head of the Local Government Area where the land is situated. Lands that had been transferred or sold before the 1978 Law are still recognized under the subsisting Land Use Law.

Another provision of the Land Use Law is the requirement that any transfer of any interest in any land whether by assignment, mortgage, transfer of possession, long sublease or otherwise would only be recognised in Law if the prior consent of the Governor of the State or the Head of the Local Government – depending on whether the land is State or Local government land – is sought and such prior consent is obtained.

Since, you cannot give what you don’t have! The title obtained by the owner is invariably what is passed to the bonafide purchaser- whether legal or equitable.

 

REALITY OF REALTY

 

real-estate

The foremost reality about realty is that everyone needs one. Whether as a single person, alongside your spouse or family unit-immediate, extended or even a large compound family. It forms part of the basic needs of man. Hence whether sooner or later the need to purchase or build becomes the reality of the day. Unfortunately, not everyone is armed with the requisite information.

Knowing the approximate value of a property is only the first step to getting a good deal. Never be afraid to ask for a lower price and be an aggressive negotiator. The worst thing you can do is rush into a purchase or get bullied into one and pay beyond the actual market value. Go into the negotiations with a maximum price, a starting offer and several ideas on what you can offer instead of price tag. We sometimes get caught up in the financials or the staging of the home and forget about some important aspects of buying or selling a land/property.

One major area is for you to involve different professionals. They may include,

  1. Real Estate Agents
  • Provide a visual representation of the property for sale
  • Assess and provide valuation report of the current value of the property
  • Meet requirements of the real estate listing/purchase contract
  • Have adequate information to avoid delays in completing property transactions
  1. Surveyors
  • To ascertain the measured size of the land
  • Establish beacon around the property upon purchase
  • To confirm the accuracy of the location of the property.
  1. Lawyers
  • Conduct legal search to confirm if there exist any encumbrance on the property
  • Process the home sale or buy transaction
  • Participate in Negotiation
  • Prepare all legal documents and
  • Comply with all regulations.

By and large, finding and evaluating commercial properties is not just about farming neighbourhoods, getting a great price, or sending out smoke signals to bring sellers to you. At the heart of taking action is basic human communication. It is about building relationships and rapport with property owners so they feel comfortable talking about the good deals – and doing business with you.

I wish you the best in your purchase!

REAL PROPERTY PLANNING

The investment into real property requires a lot of planning. The simple plan of constant SAVING can save you when an opportunity opens up to you. Sometimes, there are prospects of having a new deal or buying a land, house or getting involved in some new property transaction. Some companies in fact provide for flexible payment plans, but you cannot take advantage of such if you have not thought through the process or have a plan towards such acquisition. When it comes to investing, nothing will pay off more than educating yourself. Do the necessary research, study and analyze before making any investment decision.

In your quest to invest in real property, the following tips will help you. To wit:

  1. Choose a time range you intend to make a purchase. Do not say I have to buy on a certain date. It is advisable to keep a range in your plan. An offer may come within the category of your date in view. You can save and have more than enough to make you purchase a property way less than your budget. The bottom line is don’t rush your purchase.
  2. Engage a Solicitor. I cannot overemphasize this. Purchase of real property or investment in land isn’t one of those areas you want to cut corners and not involves professionals. You are protected in terms of taking the right steps and doing the right thing when a Solicitor is involved. All fees such as Land Search, Survey Plan, Agency and Legal Fees can be properly monitored by your Solicitor.
  3. Anticipate Ancillary Fees. Most people who are desirable to invest in real property forget to factor in other fees that are associated with the purchase. The truth is settlement of some folks depending on the area the land is situate cannot be avoided. If it is bare land and in an undeveloped area, some traditional chiefs may want to be get paid. The sorting of Omo-onile (Touts) within the area, and all that may include part of additional expense for you to incur when purchasing a property.
  4. Be thorough. Let your planning include a comprehensive service to be provided to you by your Solicitor. All documents obtained consequent upon your purchase can be filed with the government. Sometimes, the entire process may not completed immediately. But then again, you would have commenced the process of solidifying your title post-purchase.
  5. ABCXYZ

Kindly send in your questions and comments to enable us serve you better!

 

 

 

 

 

DUE DILIGENCE

Due Diligence refers to a measure of prudence that is undertaken as an investigation of a business, person, property or project before a decision is made. In the world of realty, basic steps ought to be taken prior to parting with money or other interest to ensure no harm (that transactions relating to properties are water tight) is done to others in relation to property.

Areas of Due Diligence

  1. Review Seller/Owner’s Document
  2. Receipt
  3. Survey Plan
  4. Deed of Assignment and any other relevant document
  5. Evidence of other statutory rates relating to the property

Check for Taxes and other fees- Check for the payment of land use charge such as ground rent, tenement rates. Any land with C of O attracts these charges on an annual basis. If the seller/owner refused to pay this charge it will accumulate and would be inherited by the buyer. You need to confirm this before making payment.

Physical Inspection- After verifying the authenticity of the documents, it is important that you see for yourself the land in question. You need to engage the services of an independent surveyor to confirm the size of the land to find out if it is the same with what is in the documents. Also confirm the following:

  • Proximity to the highway: There is government regulation as to the measure of setback from the road to properties. This is necessary to forestall loosing part of the property to road expansion. Confirm to discover these because sometimes in the future road enlargement could mess up your property.
  • Power-line route:Check the distance between the land and power-line route because there are specific guidelines as to the how close a property should be to power-lines. Apart from regulations it is dangerous to build under a power line route. You might want to find this out before paying for the land. It could mean demolition in future.
  • Oil and gas route:Check the proximity of the land to an oil and gas pipeline so as not to contravene the law against closeness to one of these. It is safe to maintain your distance.
  • Waterways:ensure the land is not located on or dangerously close to a waterway or major drainage because of governmental regulation and flooding.

Prospective Buyers should not stop at doing personal investigation particularly if you’re not a professional. Engage one; such as Lawyer, Surveyor et al.

Assess the land further to discover its price in relation to others in the surrounding. Ask the owner of a similar land near you to discover if it is within the same price range or outrageously above. In real estate location of a property or land is a determining factor in the price.

Inquire about the supposed owner of the land from neighbours in that area to be sure they own the property.

Conduct a Legal search: The need to conduct search at the relevant land registry cannot be over emphasized. This will afford you the opportunity of confirming the current status of the property .i.e. the true owner of the property, whether it is encumbered, whether the owner has transferred interest in the property to a third party, outstanding statutory fees etc.