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Purchase of Land In Nigeria: What You Need To Know

Eldridge Emekawovie - 25 Jan, 2018 - read

  • Real Estate
  • Conveyance
  • Alienation
  • Land
  • Vendor
  • Purchaser
  • Governor's Consent

Land transactions happen every day. You doubtless have witnessed problems purchasers face in transacting in land. It is not news that the most common problems purchasers encounter is that the vendor does not have the title or to convey the interest or there are some defects or legal restrictions in the conveyance. There are also situations where a parcel of land is sold to more than one person by same vendor. The goal of this article is to reduce these ugly incidents to their barest minimum.

Definition of Terms

Here are the definitions of some the terms you will come across in this article from the Black’s Law Dictionary 8th Edition:

Alienation: 2. Conveyance or transfer of property to another < alienation of one’s estate.

Conveyance: The voluntary transfer of a right or property

Land: 1. An immovable and indestructible three-dimensional area consisting of a portion of the earth’s surface, the space above and below the surface, and everything growing on or permanently affixed to it. 2. An estate or interest in real property.

Lis Pendens: 1. A pending lawsuit. 2. The jurisdiction, power, or control acquired by a court over real property while a legal action is pending 3. Notice, recorded in the chain of title to real property, required or permitted in some jurisdiction to warn all persons that certain property is the subject of litigation, and that any interests acquired during the pendency of the suit are subject to its outcome. – Also termed (in sense 3) notice of lis pendens; notice of pendency.

Purchaser:  One who obtains property for money or other valuable consideration; buyer.

Real Property:  Land and anything growing on, attached to, or erected on it, excluding anything that may be severed without injury to the land. Real property can either corporeal (soil and buildings) or incorporeal (easements). – Also termed realty; real estate

Vendor: A seller, usu. of real property. –Also termed venditor.

Laws Restricting Sale of Land In Nigeria

There are certain laws that restrict the sale of land in Nigeria. Before you purchase a property, you have to check whether sale of such a parcel of land is restricted by a certain law or legal instrument before proceeding with the transaction

  • Restrictions by the Land Use Act

The Land Use Act, 1978 makes some provisions restricting the sale of land in Nigeria until certain conditions are met.

Section 21 of the Land Use Act provides as follows:

It shall not be lawful for any customary right of occupancy or any part thereof to be alienated by assignment, mortgage, transfer of possession, sublease or otherwise howsoever-

(a) without the consent of the Governor in cases where the property is to be sold by or under the order of any court under the provisions of the applicable Sheriffs and Civil Process Law; or

(b) in other cases without the approval of the appropriate local government.

That means for every alienation of land under customary right of occupancy, the consent of the local government must be first sought and obtained except where the land sought to be alienated is on to be sold by or under the order of any court under the provisions of the applicable Sheriffs and Civil Process Law (in which case it is the consent of the Governor of the state in which the transaction is to take place that is required to be sought and obtained).

Section 22 of the Land Use Act provides as follows:

(1) It shall not be lawful for the holder of a statutory right of occupancy granted by the Governor to alienate his right of occupancy or any part thereof by assignment, mortgage, transfer of possession. sublease or otherwise howsoever without the consent of the Governor first had and obtained:

Provided that the consent of the Governor-

(a) shall not be required to the creation of a legal mortgage over a statutory right of occupancy in favour of a person in whose favour an equitable mortgage over the right of occupancy has already been created with the consent of the Governor;

(b) shall not be required to the reconveyance or release by a mortgagee to a holder or occupier of a statutory right of occupancy which that holder or occupier has mortgaged to that mortgagee with the consent of the Governor;

(c) to the renewal of a sub-lease shall not be presumed by reason only of his having consented to the grant of a suh-lease containing an option to renew the same.

Also Section 7 of the Land Use Act provides as follows:

It shall not be lawful for the Governor to grant a statutory right of occupancy or consent to the assignment or subletting of a statutory right of occupancy to a person under the age of twenty-one years:

Provided that-

(a) where a guardian or a trustee of a person under the age of twenty-one years has been duly appointed for such purpose, the Governor may grant the consent to the assignment or subletting of a statutory right of occupancy to such guardian or trustee on behalf of such a person under age;

(b) a person under the age of twenty-one years upon whom the statutory right of occupancy devolves on the death of the holder, shall have the same liabilities and obligations under and in respect of his right of occupancy as if he were of full age, not withstanding the fact that no guardian or trustee has been appointed for him.

Furthermore, Section 46 of the Land Use Act provides that where a person is not a citizen of Nigeria, such a person cannot be granted a right of occupancy, nor can a right of occupancy be transferred to him except with the approval of the National Council of States.

So, restrictions under the Land Use Act has to do with the Governor or local government consent (as the case may be), the age of the person seeking to obtain the consent

  • Pending Litigation

The Law is where a matter is pending in court in respect of the title to a parcel of land, there cannot be a valid sale of such a parcel of land. This position of law is expressed in Latin as lis pendens: that is, pending litigation.

In the case of Akiboye v. Adeko (2012) All FWLR (636), Page 522 at 527 to 528, the Court of Appeal, Lagos Division held as follows:

The doctrine of lis pendens as expressed in Latin maxim, “lis pendent lite nihil innovetur”, means that nothing should change during the pendency of an action. The doctrine was evolved for the purpose of preventing parties from fraudulently seeking to overreach the decision of court granting title to the opposing party on the basis that he divested himself of the title before the decision of the court is reached. Where a litigation is pending between a plaintiff and the defendant as to the right of a particular estate, the necessities of mankind require that the decision of the court in the suit shall be binding not only on the litigants but also upon those who desire title under them by alienation made, pending the suit, whether such alience had or had no notice of the pending proceeding.

In simple terms, if A and B are in court over a the person who holds the title over a parcel of land, A cannot validly pass a title in respect of that land to C until the matter is determine in A’s favour in court. It does not matter if C has notice of the pending litigation or not.

The court held further that for the doctrine of lis pendens to operate the following ingredients must be present:

(a) That there is in fact an alienation pendente lite;

(b) That there has been a successful termination (that is, in judgment or order) of the suit at the time the alienation is made; and

(c) That the alienation pendente lite has prejudiced the other party.

However, the doctrine of lis pendens does not automatically operate to nullify the sale of a property. If a party intends to purchase a property which is a subject matter of litigation, he does that at his own risk. The conveyance of the property under litigation to him is subject to the outcome of the litigation. The contract entered into by a third party who purchases a property that is subject of litigation during the pendency of the suit is not void but that sale or alienation shall abide by the outcome of the suit [Bua v. Dauda (1999) 12 NWLR (Pt. 629) 59; Barclays Bank of Nigeria Ltd v. Ashiru (1978) 6-7 SC 99].

  • Communal or Family Land

When you intend to purchase a parcel of land held by a community or family, the consent of the Community head or that of the family head (as the case may be) must be sought and obtained before the sale of the land can be valid. The Principal members of that community or family must also consent to the sale of that land.

  • Town Planning Laws

There are certain restrictions that may be imposed on the sale of properties by the town planning laws of an area. For instance, certain areas are designed as commercial areas, lands cannot be sold for residential purposes in that area. Similarly, certain land are restricted from being alienated because they are designated for infrastructural development and public utility. For instance, the Land Development (Provision for Roads) Law, Cap. L 57 Laws of Lagos State 2003 states that the sale of any land which the prescribed authority has directed to be reserved for roads and development, shall be null and void.

Preliminary Matters

Before as a purchaser you make part with the consideration for the property and the interest is transferred to you, there are some preliminary matters you need to attend to. It is expected of the vendor is to make available to the purchaser all necessary information about his title to the parcel of land. The purchaser haven gotten the information provided by the vendor is to investigate the title of the vendor based on the information gotten. It is advisable by both parties to get a legal practitioner at this stage.

According to Yusufu Yilzum Dadem, Ph.D  in his book “Property Law Practice in Nigeria (2nd Edition), Jos University Press Limited, 2012,  the following are questions that the purchaser is meant to submit as preliminary enquiries to the vendor before the contract is entered into:

  • Boundaries of property.
  • Dispute over the property.
  • Notices in respect of the property.
  • Guarantees in respect of the property.
  • Services supplied on the property.
  • Facilities of the property.
  • Any adverse rights and restrictions on the property.
  • Planning schemes for the property.
  • Outgoings charged on the property.
  • Method of sale of the property.
  • Details of lease, lessor, headlessor, and licenses.
  • Covenant and their breaches.
  • Services charges.
  • Insurance provisions and policies.
  • Reversionary title or interest.
  • Any other additional inquiries in which the special circumstances of each transaction requires.

Investigation of title

After the vendor has deduced his title, the thing the purchaser is meant to do is to conduct investigate the title of the vendor. Investigation of title can take the form of a search or any other legitimate process to ascertain whether the title the vendor intends conveying is valid or not.

The following are ways to investigate title to land:

  • Search at Land Registry

There is a place called Land Registry in the Ministry of Land, Survey, and Town Planning. The name of this ministry slightly differs from state to state.

Every interest in and over a parcel of land ought to be registered with the land registry. However, not every interest is registered with the land registry. Where a parcel of land you intend to purchase is registered with the land registry, details like the description of the property-size, dimension, location, survey plans as well as any previous and existing encumbrances on the land can be found.  Also, you will find court judgments obtained and registered over the property if any.

  • Search at Probate Registry

The probate registry is a registry in the High Court of states in Nigeria where records of Wills and other testamentary documents are kept. A search at the probate is necessary when the property you intend purchasing is a subject of inheritance either in intestacy or testacy. A search will reveal the rightful heir to the property in question and whether there were disputed over the Will or letters of administration as the case may be and the resolution of such disputes.

  • Search at the Corporate Affairs Commission (CAC)

The Corporate Affairs Commission regulates the establishment and administration of companies and allied bodies in Nigeria. Where a property is intended to be bought from a company, it is imperative to search at the CAC for details like the registration status of the company, the real directors of the company and whether there was a board resolution empowering the sale of the property in question.

  • Search at the courts

It is wise to conduct search at the courts in the neighbourhood where you intend to purchase a property. The search will reveal legal battles if any in respect of the parcel of land you intend to purchase.

  • Physical inspection of the property

Physical inspection of the property is to ascertain the actual size, dimension, extent of development on the property.

  • Gathering of local intelligence

There is the necessity to meet with the family head if the property you intend to purchase is a family property or if the vendor derived his title from the family. A situation whereby a vendor derived his title from another family who sold to him, it is also necessary to meet with the family. Even where the land you intend to purchase is not a family land, it is important to interview owners of adjourning lands with a view to ascertaining the rightful owners of the land.

From the above, you can see that property purchase is not just about payment of purchase price. It requires skills and diligence. The principles treated in this article are not exhaustive but they can go a long way of reducing the incidents of purchase of land from a vendor without title.

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