The place and nature of agreements in property acquisition and development (4)

Ogunsakin Mustapha
11 Min Read
Ebun Olu Adegboruwa SAN

Ebun-Olu Adegboruwa, SAN

It has been earlier mentioned that acquisition of immovable property in Nigeria is a fundamental right, guaranteed under the highest law of the land, being section 43 (1) of the 1999 Constitution. There are therefore certain steps, established by daily practice and procedures, that should serve as guides on property acquisition in Nigeria. One of these key steps is to get a reliable real estate company or professional to guide the potential investor through necessary processes of property acquisition in Nigeria. The next step is to engage a Solicitor to conduct verification of the title of the proposed investment in order to determine if it is subject of either committed or non-committed acquisition or any other encumbrance. This step is very necessary especially as the property may be subject of litigation or some other disputes, all of which may not be easily discovered through the official search at the Land Registry. There is thus the need to conduct what is now commonly referred to as Social Search, which is an informal investigation of the property. This can be through interactions with those living within the neighbourhood, security men of the adjoining land and others who are familiar with the history of the area. Many have lost huge investments due to their negligence or shrewdness in failing to engage professionals to assist them in this process. It is a case of being penny wise pound foolish , as the sum to be paid to professionals to conduct these searches is just a token when compared to the colossal loss that may be suffered in the event of any encumbrance.

Some of the various methods of acquiring property in Nigeria are:

Probate/ Letter of Administration: The learned authors of Black’s Law Dictionary, Deluxe Ninth Edition, page 1321 explain the meaning of “probate” as follows: “The judicial procedure by which a testamentary document is established to be a valid will, the proving of a will to the satisfaction of the Court.” A probate is a Court-ordered process where the will of a testator is validated. It is the authority that a beneficiary has to assume ownership of any gift or properties granted in the Will. The Will alone cannot convey title in a real estate to a beneficiary, it is only after the probate has been applied for and obtained that the beneficiaries can have unlimited access to the gifts granted in the Will. The Letter of Administration is the authority given to an Administrator to administer, manage or distribute the properties of a deceased person who died without a Will. The challenge with both processes is the delay usually associated with the process, whereby beneficiaries have to wait for years in order to obtain probate.

Gift: This is a voluntary, willful act of transfer of interest and ownership in a property. For a gift to constitute a valid gift inter vivos one must either produce and tender a deed of gift, if the grant was under English Law, or call his grantor, successor in title or a witness of the transaction, to testify at the trial if under customary law.”

Sale of Real Estate: This is a common method of property acquisition as it involves the transfer of the entire rights, title and interest in a land or building from the vendor to the purchaser for valuable consideration.

Some of the documents required in property acquisition in Nigeria are documents required when acquiring the property:

Approved Survey Plan – A land survey plan is a specialized map of a parcel of land, created by thoroughly examining and measuring the property. It determines and delineates boundary locations, building locations, physical features and other items of spatial importance. This document provides the buyer with information on the actual location and boundaries of a property. It also reveals whether the land is under any government acquisition or not.

Deed of Assignment – Deed of Assignment is a formal contract acting as the main document between the vendor and the purchaser to show that all negotiations, investigations, and other necessary due diligence have been done.

Certificate of Occupancy – In Nigeria, the Certificate of Occupancy (or C of O) is the most important document to property buyers and landowners. The document is issued by various governments in Nigeria and it verifies that you own the land or property in question. Property purchased without a Certificate of Occupancy is the equivalent of purchasing a vehicle without a logbook.

Governor’s Consent – This is the approval of a state governor by himself or through the designated commissioner to any property transfer. The law is that a document of title to land that does not have the consent of the Governor will still sustain a claim for title provided it is coupled with possession of the land in question. Such a document vests in its holder, in such circumstances, an equitable interest in the property in its terms which will become a legal interest on obtaining the consent of the Governor and that such equitable interest would sustain an action for ownership of the property. See OBIJURU v. OZIMS (1985) 2 NWLR (Pt 6) 167. The rationale for this position of the law is that, in applying the provisions of Sections 21 and 26 of the Land Use Act, the Courts recognize that there are two broad stages culminating into the vesting of title to a purchaser in a land transaction. The first stage is the agreement or contract stage. At this stage of entering into a contract for sale of land, no alienation takes place and this is up to the point of arriving at a binding contract and as such no consent of the Governor is required as a legal prerequisite at this stage. The second stage involves alienating or transferring the vendor’s right of occupancy and which is done by a conveyance or deed and because this stage invariably involves the vesting of title in the purchaser, consent.

It must be mentioned that, the legal consequence of an agreement prepared in anticipation of obtaining Governor’s consent is that, such agreement is inchoate or at best a mere escrow till the requisite governor’s consent is obtained. The logical and legal consequence is that, in such an agreement, no interest in the land is passed under the agreement, till the consent of the Governor is obtained. See BROSSETTE MANUFACTURING (NIG) LTD v. M/S OLA ILEMOBOLA LTD & ORS (2007) LPELR-809(SC).

Purchase Receipt: Generally, a purchase receipt does not convey title or legal estate in a landed property to the purchaser. However, it can be tendered as proof of actual purchase or indeed exchange of money between the vendor of land and the purchaser. See ENADEGHE v. EWEKA (2014) LPELR-24479(CA). The law is fairly settled that a party who claims title to land through purchase and seeks a declaration in respect of the land must prove that he purchased the land by producing a purchase receipt or an agreement of sale or any document that shows that such a transaction did in fact take place. See OTANMA v. YOUDUBAGHA (2006) 2 NWLR (Pt. 964) 337. It is the purchase receipt that constitutes proof or evidence that there was an agreement for sale of land and that due consideration for the sale was paid by the purchaser. Furthermore, the key step by step guide on Property Acquisition in Nigeria can broadly be divided into pre-contract stage, contract stage, post contract stage, completion stage and post completion stage.

Pre-Contract Stage: This is the stage where the purchaser physically inspects the property. He/she wants to purchase to ascertain whether the property fits the description given by the vendor and whether the property is in conformity with planning laws and other relevant laws in Nigeria.

Contract Stage: This involves negotiation of terms and conditions of the sale such as price, obligations of the parties, etc. A formal contract is drafted at this stage.

Post-contract stage: This is the stage where the purchaser does a thorough investigation on the title of the property. This involves carrying out searches on the property at relevant places/government agencies (for example, Ministry/Bureau of Lands) in order to ascertain the authenticity of the vendor’s title.

Completion Stage: This is the conclusion of the sale and purchase of the property. At this stage, the purchaser makes complete payment for the property and the vendor executes and hands over all original copies of the property’s title documents, thereby conferring the entire title and interest in the property to the purchaser.

Post-Completion Stage: The purchaser is required to perfect their title to the property. This is done by registering the title at the relevant land registry in Nigeria.

Conclusion: Acquiring a property in Nigeria connotes various legal requirements and key procedures to be followed. It is essential to involve a solicitor when one intends to acquire a property in Nigeria, as the responsibilities and roles of a solicitor concerning acquiring property are fundamental.

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