What happens when you see a property that fits your budget, location specification, quality, and style and you desire to buy but you discover that the title on the land is not complete? Do you proceed with payment, or do you go in search of another? What consequence could it possibly have if you insist on buying?
When purchasing a property, whether for investment or personal use, one important consideration is the property document.
Simply because the property document on a property (land or building) shows the true legitimacy of purchase. It is the only way to guard you against theft, government seizures, court cases, and land grabbers.
Besides, it’s the only legally recognized means for real estate property to be inherited or given out as an inheritance.
You may have heard about court cases involving land or house debates that drag on for years. Legal and courtroom statistics in Nigeria show that the majority of outstanding court cases pertain to property issues. Most of which rarely ends well.
In buying a property in Nigeria, CAVEAT EMPTOR applies: Meaning Buyer beware. Any wrong purchase falls on you, the buyer. And you alone would bear the responsibility for a bad deal.
The best way to avoid this is to know about and conduct proper research on property documents (titles) in Nigeria.
In this article, you will learn all about the different property documents and their relevance. First, an understanding of the laws guiding these documents is necessary.
The Various Laws Governing Real Estate Transactions In Nigeria
There are two major laws governing real estate transactions in Nigeria, they are:
- The Constitution Of The Federal Republic Of Nigeria
- Land Use Act
The land use act is applicable throughout the federation and it states; The act vest ownership of all lands in the governor of that state to hold in trust for the people. (Section 2 LUA) (1978).
However, each state has adopted its laws to administer and regulate the land use act and they include
- Registration of Title law
- Property and Conveyance law
- Land Instrument Registration
- Laws of Various States
Reasons For Property Document In Nigeria
- To show and verify ownership of a property
- Serve as valid evidence when a third party attempts to claim ownership of the property
- It is the only legal way for a property to be transferred either for sale or as an Inheritance
- It is the only acceptable means for a property to be used as collateral when applying for loans.
Types Of Property Document In Nigeria
In Nigeria, in order to establish ownership of a property (land or house), property documents are needed to show ownership.
There are various transferable instruments and titles including but not limited to the following:
- Deed Of Assignment Or Conveyance
- Governors Consent
- Power Of Attorney
- Land Excision
- Right Of Occupancy (R OF O)
- Survey Plan / Certificate Of Deposit
- Certificate Of Occupancy (C Of O)
- Deed Of Gifts
Let’s explain the above property documents.
Deed Of Conveyance Or Deed Of Assignment
A Deed of Assignment is also known as a Deed of Conveyance in some states. It is used in sales transactions to permanently transfer property from the seller (also known as the assignor) to the buyer (also referred to as the assignee) starting from the commencement date stated in the document.
A Deed of Conveyance or Assignment must be registered in the land registry where the property is located. This property document serves as legal proof that the property has changed hands. At the land registry, the deed is stamped and a governor’s approval is given before it is registered. LFN 2004 (LUA).
The deed of assignment/Conveyance is a legal document used to record the sale of land or a house. In states like Lagos state and the Federal Capital Territory Abuja. The laws governing these states recognize the Deed of assignment. While states like Rivers and Edo, recognize the Deed of Conveyance.
Also, the holder of a statutory Right of Occupancy (R of O) can assign the unexpired residue of the existing interest through a Deed of Assignment / Conveyance.
Benefits Of Deed Of Assignment Or Deed Of Conveyance In Nigeria
- It is a legal document essential for the transfer of property (land or house) from one party to the other as it contains all the agreed terms by both parties.
- It serves as a legal root to the property title. A deed of conveyance or assignment is needed when processing your Certificate of Occupancy (C of O).
This document shows the consent obtained from the government of the state through his signature. Without the governor’s consent, the real estate transaction is deemed illegal. In Nigeria, this is an essential property document to possess before one can process their Certificate of Occupancy (C of O).
Benefits Of Governors Consent In Nigeria
With the governor’s consent, it is easier to process your C of O
Power Of Attorney
A Power of attorney is a property document that authorizes a person (agent) to act for another person (Principal) in several matters and decisions. Usually drafted by a lawyer for both parties.
The Power of Attorney can be used in two ways, either as:
- A Delegable Instrument
- A Transferable Instrument
A Delegable Instrument
Power of Attorney as an instrument of delegation is one by which a person called the donor appoints the donee to perform certain lawful acts on his behalf. UDE V NWARA.
Usually used in cases where the property owner is indisposed (medical condition, absence, etc). There is usually a limit to what the donee can do on behalf of the donor. The Donee cannot transfer or vest ownership of the donor’s property to another.
A Transferable Instrument
A Power of Attorney is used as a transferable instrument for the transfer of property(land or house). This is where a POA becomes a transferable Instrument recognized in some States example: Anambra, Lagos, Imo, and Akwa Ibom.
This is why when buying land in states like Anambra, Lagos, Imo, or Akwa-Ibom the title Power of Attorney is recognized as an acceptable title for transfer of property ownership.
Types Of Power Of Attorney
There are two types of Power of Attorney
- Revocable Power of Attorney
- Irrevocable Power of Attorney
Revocable Power of Attorney
The various ways of revoking power of attorney are:
- express revocation(when done through a deed)
- implied revocation
- revocation by operation of law(when fraud, misrepresentation, or duress arises)
Irrevocable Power of Attorney
Where a Power of Attorney is given for valuable consideration and it is expressed in the instrument creating it to be irrevocable in favor of the purchaser. See section 8(1) CA and section 143(1)(i) PCL.
An Irrevocable Power of Attorney must be registered with the necessary land registry, or else it is inadmissible in court. Also, it should be attested either by a Judge, Notary public, or a magistrate.
Benefits Of A Power Of Attorney In Nigeria
- It ensures that your will and duties are carried out in case of your absence or when you are unable to carry out your will yourself.
- Institutions like banks do not accept instructions from individuals or institutions on your behalf without being legally authorized through a Power of Attorney.
Land excision means that a part of the land has been legally released to indigenous settlers by a government gazette and it’s termed to be excised.
Also, this signifies that the land is no longer under government acquisition, thus C of O (Certificate of Occupancy) procedure is now possible. Since the Land use act was enacted in 1978, this title has been used to compensate the original owners of the Land. Every land you buy must be excised.
Benefits Of Land Excision In Nigeria
It saves you from disputes with ancestral land owners (OMO NI LE). This group of people or individuals does not really care about your property documents, but they do respect it. More reason why a property document is very important.
Right Of Occupancy
This is the offer to occupy a plot of land. It is of two kinds:
- Statutory Right of Occupancy
- Customary Right of Occupancy.
Certificate Of Statutory Right Of Occupancy
Statutory Right of Occupancy given by the governor of the state. Section 5 (1) (a) of the (LUA).
In Abuja, the Right of Occupancy is issued by the minister. And as the name implies, it means a particular person has the right to use and occupy the land. This title is for 99 years.
Certificate Of Customary Right Of Occupancy
It is a right of occupancy expressly granted by a local government authority to persons in respect of land within its localities, which are not designated as urban areas by the state government, under Section 6(1)(a) of the LUA. It could be for agricultural use, residential use, or other purposes.
Customary certificates of occupancy are administered by local government councils and apply solely to rural land. It is a very important property document.
A survey plan is another legal property document that is important for every property transaction. It gives an accurate measurement of a parcel of land, its location, and description, and states the owner’s name. When the survey plan is deposited in the office of the surveyor, a Certificate of Deposit is tendered.
Certificate Of Deposit (COD)
This property is very vital in the processing of the Certificate of Occupancy.
Certificate Of Occupancy (C of O)
The best property document to own is the C of O. It is the legal and official title to the land or house. A certificate of occupancy (C of O) is the most important document in a real estate transaction. It is a land title document issued by the governor of a state to landowners, as legal proof of land ownership in Nigeria.
Since the land use act of 1978, the governor of any state reserves the right to seize any property not having a C of O without giving any compensation.
Benefits Of Having A Certificate Of Occupancy In Nigeria
- What makes the Certificate of Occupancy unique is the fact that no land or house can have two C of O. This usually prevents cases of fraud and false claims to properties as it ensures only one owner for a property.
- It protects you against government seizures or confiscation without compensation.
- It increases the value of the land, as the process to get one is often tedious and expensive, most property owners with C of O include the value of the C of O to their property when selling.
Procedure For Acquiring A Certificate Of Occupancy (C Of O) In Nigeria
The process of acquiring a C OF O on your property could be a bit tedious, but it is highly important for you to attain. It is both time-consuming and costly. For easy understanding, I would be dividing the procedure into four parts. Here are the procedures to get a C OF O in Nigeria:
Gather the following documents:
- Land information certificate, which is obtained from the Surveyor General’s office.
- Certificate of deposit (COD)
- Stamp duty receipt
- 3 years of tax clearance or evidence of being domiciled abroad.
- Passport photograph (3 copies)
- All the stamp duty of your property document
- Survey plan
- Deed of Assignment or Conveyance; depending on which state it is.
- Power of Attorney(POA)
- Copy of approved building plan(if developed)
- Copy of tenement rate receipt if occupied
- Cover letter addressed to the Executive Secretary, Land Use Allocation Committee (LUAC) stating all documents attached, as above, and typed with the applicant’s address.
- Visit the ministry of land use and allocation
- Obtain a C OF O form either physically or through their website
- Submit forms
- An official receipt for application fees of 5,000 (NGN) for residential use or 10,000 (NGN) for commercial use.
- The publication is made in any newspaper or public information outlet within 21 days giving room for anyone to contest the application.
- Pay the requisite fee (premium, temporary occupation, license)
- Collect the acknowledgment slip as evidence of payment.
- Applicant collects letter of Allocation
- The allocation fees should be paid (with a period not less than 90 days)
- Site inspection is conducted by the Land Use Allocation Committee. A report is made which is used in processing the C of O
- A letter of confirmation is issued to the applicant along with a plot number and block number.
This contains the preparation, signing, and registration process of C of O
- The scheme officer begins processing the application for C of O, signs off on the file, and forwards it to the Executive Secretary of land use allocation (LUAC)within a space of 5 days.
- The surveyor general provides the Scheme officer with a digitized survey copy
- The Executive Secretary approves the processing and signs an allocation letter and signs off the file.
- The file is sent to the Senior Special Assistant to the Governor, Lands. Who examines the entire file and sends it with a covering memo to the Permanent Secretary, Land Bureau
- Should the file have a query, it is sent back for correction.
- The Permanent Secretary Land Bureau signs off on the memo and sends the file to the governor.
- The governor approves the file and signs the C of O and sends it to the Deputy Registrar for further processing
- The Deputy Registrar signs off the file and sends it to the Registrar of Title for registration of the C of O.
- The Registrar of Title, signs, and requests for printing of the C of O.
- Collection of C of O.
ASSENT is a vital document that is used to vest the property of a deceased beneficiary. An assent law applies in Lagos State and some western regions. In northern or eastern states, the beneficiary doesn’t need assent because he or she gets the gift straight from the will (Administration of Estate Law).
A receipt in any real estate transaction indicates that the seller received the purchase price from the buyer.
Deed Of Gift
A deed of gift is a signed legal document that voluntarily transfers ownership of real estate property, without recompense. From one person or institution to another. It is often used when one (the donor) wants to show appreciation or gratitude to another (the recipient).
A deed of gift is irrevocable once given. A deed of gift can be accepted on behalf of the donee by another person, especially in cases where the donee is not yet of age. Once registered, A deed of gift is recognized as a transferable property document for Real Estate Transactions.
Final Take Away on Property Documents
Before accepting any of these documents when buying a property, ensure to verify its authenticity at the land registry of the state. This would confirm that the document is duly registered and belongs to the person who claims to own it.
It is always advisable to employ the services of a lawyer to guide you through the process. All these property documents help prove ownership of properties in Nigeria. The most important is the C of O.
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