Real estate transactions in Nigeria can be rewarding but are often fraught with potential legal pitfalls. These pitfalls, if not carefully navigated, can lead to financial losses, disputes, or even litigation. This article outlines common legal challenges in real estate transactions in Nigeria and the laws enacted to address them.
Lack of Proper Land Title Documentation
One of the most common issues in real estate transactions is the absence of valid land title documentation. The Land Use Act of 1978 is the primary law governing land ownership in Nigeria. Under this act, all land is vested in the state governor, and individuals or entities can only hold land through a Certificate of Occupancy (C of O) or other recognized documents.
Before purchasing any property, ensure that the seller has a valid C of O or a registered Deed of Assignment. Failing to verify these documents can result in buying a property with defective ownership.
Double Sales or Fraudulent Transactions
Fraudulent sales, where a property is sold to multiple buyers, are common in Nigeria. The Registration of Titles Act (Cap R4, LFN 2004) was enacted to curb this issue. It mandates the registration of land titles and transactions at the relevant land registry.
Buyers are advised to conduct due diligence, including a search at the land registry, to confirm that the seller has clear ownership rights and that no encumbrances (such as mortgages or court injunctions) exist on the property.
Unregistered Land Transactions
The Property and Conveyancing Law of 1959 (applicable in some states) and the Land Instruments Registration Law require that any transaction involving land be registered. Unregistered land transactions are legally unenforceable and can lead to disputes or outright loss of investment.
Always ensure that the Deed of Assignment or any other legal instrument transferring ownership is registered promptly to secure your ownership rights.
Failure to Obtain Governor’s Consent
Section 22 of the Land Use Act of 1978 stipulates that any transaction involving land, such as a sale, lease, or mortgage, requires the governor’s consent. Failure to obtain this consent renders the transaction void under Nigerian law.
Buyers must insist on seeing proof of the governor’s consent before finalizing a transaction to avoid legal complications.
Encroachment and Boundary Disputes
Encroachment on land is another legal pitfall in real estate. The Surveyors Registration Council of Nigeria (SURCON) Act, 1989 provides a framework for resolving boundary disputes through certified survey plans.
Engage a licensed surveyor to verify the boundaries of the property and ensure there is no encroachment before completing the purchase.
Non-Compliance with Zoning and Planning Laws
The Urban and Regional Planning Act of 1992 governs the use of land and ensures compliance with zoning and planning regulations. Purchasing land in areas not designated for residential or commercial use can result in penalties or demolition by the government.
Confirm the zoning classification of the property with the relevant planning authority to avoid these risks.
CONCLUSION
Real estate transactions in Nigeria require careful attention to legal details. Always engage qualified professionals, such as lawyers and surveyors, to guide you through the process and avoid falling into legal traps. Familiarizing yourself with key laws, such as the Land Use Act of 1978, can also help you make informed decisions and secure your investment.
Invest wisely and always prioritize due diligence to avoid the pitfalls of real estate transactions in Nigeria.
