Transferring Land Title in Nigeria
Updated Information
This article was originally published as a general guide to transferring land title in Nigeria. It has been updated to reflect the importance of proper due diligence and the fact that land transactions and registration procedures may differ depending on the nature of the property, the interest being transferred and the State or Federal Capital Territory where the land is situated.
Introduction
Transferring an interest in land in Nigeria involves more than paying the purchase price and collecting documents from the seller. Proper investigation of the property, preparation of the appropriate transaction documents, payment of applicable duties and charges, obtaining any required consent and registration of the transaction are important steps in protecting a purchaser’s interest.
The exact procedure may differ from one State to another. Land administration in the Federal Capital Territory may also involve different requirements from those applicable in the States. The nature of the title being transferred can equally affect the process.
Whether you are buying land, acquiring property from a family, purchasing a house or receiving an interest in land through another form of transaction, proper legal due diligence is essential.
Step 1: Conduct Proper Due Diligence and a Title Search
Before entering into a land transaction, it is important to investigate the property and the person or persons claiming the right to transfer it.
A legal search can help determine the nature of the title being relied upon and reveal information available in the records of the relevant land authority or registry. Depending on the circumstances, the investigation may include checking whether the title is properly recorded, whether the property is subject to an existing encumbrance and whether there are restrictions affecting the proposed transaction.
This process usually involves conducting a proper land search before buying property in Nigeria.
A title search alone may not be sufficient in every transaction. Depending on the nature of the property, further investigation may be necessary.
Investigate the Seller’s Authority to Transfer the Property
A purchaser should confirm that the person offering the property for sale has the legal authority to transfer the interest being offered.
This is particularly important where the property belongs to a family, forms part of an estate, is owned jointly by several persons or is being sold through an attorney or representative.
Where a person is acting on behalf of another person, the authority under which the person is acting should also be properly examined.
Verify the Physical Property and Survey Information
The purchaser should ensure that the property being investigated corresponds with the land being shown by the seller.
The survey plan, land description, boundaries and other relevant documents should be carefully reviewed. Where necessary, a qualified surveyor may be engaged to assist with verification.
Check for Government Acquisition and Other Restrictions
It is also important to investigate whether the land is affected by government acquisition, planning restrictions, road schemes or other public interests that may affect the purchaser’s intended use of the property.
The appropriate authority for this investigation will depend on where the property is located.
Proper investigation at this stage can help prevent the purchaser from acquiring an interest in property that is affected by a legal restriction or other significant problem.
Step 2: Agree the Terms of the Transaction
Before the transaction is completed, the parties should clearly agree on the terms of the sale or transfer.
Important issues may include the purchase price, payment terms, the property being transferred, the documents to be provided by the seller and responsibility for transaction expenses.
In some transactions, the parties may first enter into a contract of sale before the final instrument transferring the interest in the property is executed.
Step 3: Prepare and Execute the Appropriate Transfer Documents
The document used to transfer an interest in land will depend on the nature of the transaction and the interest being transferred.
A Deed of Assignment is commonly used where an existing interest in land is being assigned from one person to another. Other transactions may require different documents.
The relevant document should accurately identify the parties, describe the property, state the interest being transferred and contain the terms agreed by the parties.
Errors in land documents can create serious difficulties during consent, registration or future transactions. For this reason, the preparation and review of the relevant documents should be handled carefully.
Step 4: Pay Applicable Stamp Duties and Other Charges
Documents relating to land transactions may attract stamp duties and other applicable charges.
The amount payable may depend on factors including the nature of the instrument, the value of the transaction and the applicable law or administrative requirements.
Stamping is an important part of the perfection of many land transactions. The applicable procedure and authority may depend on the location of the property and the nature of the parties and transaction.
Other charges may also arise during the process, including consent fees, registration fees, valuation fees and other administrative charges where applicable.
Step 5: Obtain Any Required Consent
Depending on the nature of the interest being transferred, consent from the appropriate authority may be required before the transaction can be properly perfected.
For certain transactions involving a statutory right of occupancy, the provisions of the Land Use Act may require the consent of the appropriate authority before the interest is assigned, mortgaged, transferred by possession or otherwise dealt with.
For land within a State, the relevant authority may be connected with the Governor’s powers under the applicable land administration framework. For land within the Federal Capital Territory, the relevant authority may involve the Minister of the Federal Capital Territory.
The requirement for consent should therefore be considered in relation to the particular title and transaction rather than assumed to apply in exactly the same way to every land transaction in Nigeria.
Step 6: Register and Perfect the Transaction
After the relevant documents have been properly executed and applicable requirements have been satisfied, the transaction may need to be registered or otherwise perfected with the appropriate land authority.
Registration helps create an official record of the transaction and may be important in protecting the purchaser’s interest against competing claims.
The documents required for registration may differ depending on the State or the Federal Capital Territory and the nature of the property.
A purchaser should therefore confirm the current requirements of the relevant land registry or land administration authority before commencing the registration process.
Important Things to Keep in Mind
1. Do Not Rely Solely on the Documents Presented by the Seller
Documents presented by a seller should be independently investigated. The existence of a Certificate of Occupancy, Deed of Assignment, survey plan or other land document does not remove the need for proper due diligence.
The authenticity of the documents and the authority of the person presenting them should be properly investigated.
2. Consider the Location of the Property
Land administration procedures are not identical throughout Nigeria.
The requirements applicable to property in Lagos State, Rivers State, Enugu State or another State may differ from the requirements applicable to property in the Federal Capital Territory.
Current procedures should therefore be confirmed with the relevant land authority before documents are submitted for processing.
3. Budget for Transaction Costs
The purchase price is not always the only financial obligation involved in acquiring property.
Depending on the transaction, additional expenses may include legal fees, survey fees, stamp duties, consent charges, registration fees, valuation fees and other applicable charges.
These expenses should be considered before completing the transaction.
4. Investigate Existing Encumbrances and Disputes
A purchaser should investigate whether the property is subject to an existing mortgage, court dispute, family dispute, charge or other competing claim.
Acquiring property without discovering an existing legal interest or dispute can expose the purchaser to significant difficulties after the transaction has been completed.
5. Consider Whether the Transaction Involves an Estate or Family Property
Additional issues may arise where the property forms part of the estate of a deceased person or belongs to a family.
Before property belonging to an estate can be validly transferred, the person dealing with the property must have the necessary legal authority to do so. Family property may also require the involvement or consent of the persons legally entitled to deal with it.
These situations require careful investigation because the rules applicable to them may differ from an ordinary sale between two individual property owners.
6. Engage a Qualified Professional
Land transactions can involve significant financial and legal consequences. Proper investigation before payment is often more important than attempting to correct problems after the transaction has been completed.
Engaging a qualified lawyer can help ensure that the relevant documents are reviewed, the necessary investigations are carried out and the transaction is properly structured and perfected.
Conclusion
Transferring an interest in land in Nigeria requires more than simply signing documents between a buyer and seller. Proper due diligence, verification of title, investigation of the seller’s authority, preparation of the appropriate documents and compliance with applicable consent, stamping and registration requirements are important parts of the process.
Because land administration procedures can differ depending on the location of the property and the nature of the interest being transferred, there is no single procedure that applies identically to every land transaction in Nigeria.
Taking the time to investigate the property properly and comply with the relevant legal and administrative requirements can help reduce the risk of disputes and protect the purchaser’s interest in the property.
Legal Disclaimer
This article provides general information about land title transfers and land transactions in Nigeria. Land laws, registration procedures and administrative requirements may differ depending on the location of the property and the nature of the transaction. The information provided does not constitute legal advice. Specific legal advice should be obtained in relation to the particular property and transaction.
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