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Property and Environment

Legal knots buyers can’t ignore when buying properties

Whether for personal or commercial investment purposes, there are legal issues buyers must give adequate considerations to enable a seamless acquisition and avoid bundles of litigation.

Checks by BusinessDay revealed that most Nigerians do not take into consideration some legal requirements on a property before purchasing, hanging their fate on the neck of agents.

The trust on the property realtor to carry out all due diligence on a property, sometimes as a means of reducing cost, make people fall prey to dubious and fraudulent property dealers.

 Analysts polled by BusinessDay reeled out the step-by-step legal requirements that should be ascertained by a potential property owner before making payments for a property.

Yemi Opemuti, chief executive officer at BAM & GAD Solicitors, a commercial, corporate and business law firm, explained to BusinessDay that initial considerations must include all title documents such as a purchase receipt, survey, title documents, that is, certificate of occupancy or approved building plan of the owner in the case of a landed property with an existing building.

“Ask for survey, go and chart the survey at surveyor general’s office to determine whether the land falls under government acquisition,” he advised.

This is imperative as many developed areas in Lagos fall under acquisition without buyers knowing.

“A property might be on Adeyemi Street in Lekki Phase 1, but unscrupulous sellers can present you the survey of a property on another street where the land is free from acquisition,” Opemuti explained further.

Breaking down the due diligence requirements, he said that since the certificate of occupancy is issued only once by a state governor, buying a property with an existing C-of-O will require application for governor’s consent. The consent acknowledges the transfer of ownership to the new buyer.

Corroborating him, Florence Alao, a real estate legal adviser, said a buyer must first ascertain if the property has been registered.

 “That is if it has a titled document in the name of whoever you are buying from, not from a roadside agent (Omoniles) who issued the person a land purchase receipt and also the registration of the property  should not be ongoing as at the time of the purchase,” Alao told BusinessDay.

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Secondly, a legal research has to be conducted to ensure the property is not in combat or pledged for a credit facility because, in that case, the bank will register their interest on the title, Alao explained.

But legal issues vary from place to place and case to case.

In Lagos State, for instance, there are federal lands in some parts of Ikoyi, Festac Town and Abeokuta Expressway and likewise other locations. In these locations, buyers have to apply to the federal ministry of works for either C-of-O or consent which will be signed by the minister of Power, Works and Housing on behalf of the federal government before acquisition happens.

There are also areas in Lagos where excision—land acquired by the state government but later released to the customary or native land owner – is necessary.

“This is common within the Lekki area down to Epe. The excision is covered by gazette including the title of the customary owners, Opemuti noted.

“In that situation, a buyer needs to ask for the excision.”

Based on that, the buyer can make enquiry at the land registry as regards whether the excision given is genuinely issued by the Lagos state government to avert fraud.

However, there are also other issues buyers must be sensitive to.

If a property is to be sold by a company, a minimum of two directors must sign the Deed of Assignment, that is, the contract between the buyer and the seller.

Opemuti advised that soliciting lawyers in such case could conduct a search on the company to determine whether the signatories are current directors of the company. If not, it may result into a bad sale.

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In the event of purchasing a property tagged Mr and Mrs, the husband and the wife must also sign.

Where  the owner is late, a buyer needs to seek granted probate will or ask for letter of administration in the event that the owner died intestate.

Granted probate will is the will by the former owner registered with the court while ‘letter of administration’ is for someone that died without a will.

Either the wife of the deceased or the children or family member could be appointed as the administrator of a property. If not, a buyer should decline until that is done in the court.

In the case of a family land, buyers must seek principal members of the family or accredited members capable of being signatories. If a party is selling on behalf of the other, a buyer must seek the registered power of attorney to sell.

The process of buying land in Nigeria could be challenging and poses a great risk without being properly guided.

Explaining his horrible experience to BusinessDay resulting from a property he acquired around Fadeyi in the Lagos, a buyer, who did not want to disclose his name, said “till today the property I bought through the help of an agent my brother recommended to me is still in court.”

He explained that after “I bought the four flat apartment with all necessary documents given to me, another man came to the house six months later and had same documents as the ones that were presented to me claiming ownership of the property.”

He admitted that he did not carry out any form of legal investigation as he was told that the agents knew how to go about getting everything and considering “my brother recommended him, I didn’t have any reason to waste money, but now I regret not doing all that.”

Responding to why most people do not like to involve a legal professionals when acquiring a property, Yemi Stephens of Estate Links said people do not recognize the place of a professional in a real estate transaction because they want to save cost.

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“People don’t like paying professional fees and it is penny wise pound foolish,” Stephens said. He explained that even being a professional in the real estate industry does not stop him from consulting a Lawyer to help with his paper work when he wants to acquire a property.

“I can conduct due diligence search on a property but still what the trained eyes of a lawyer will see I might not be able to see. The case is the same for an engineer or a lawyer who is asked to come and do valuation of a property; they might not be able to see what I will get out from a property,” he noted.

On other areas where the expertise of a legal professional is required during the acquisition of property is confirming the originality of the property documents.

“There is also need to do verification to know if it is the original title you are holding, because sometimes title documents are cloned and this can be verified with the land registrar because they usually keep an original copy of a property document they issue,” Alao cited.

BusinessDay checks have shown that getting registration for land and real estate properties is one of the many issues that drags Nigeria’s property market which  is deficient by more than 17 million units.

“The land registry process, as I was told you, takes two weeks, but in the last two months I have been having an issue, and I have been advised by friends who have had similar issues to get a solicitor to help push on it,” a developer in Lagos told BusinessDay on condition of anonymity.

Source: Okafor Endurance

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