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Understand the title deed when buying a property in Nigeria

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Investing in property in Nigeria offers growth opportunities. Options include city apartments, suburban homes, and countryside estates, making it an enticing market for investors.

However, international buyers may find it challenging to navigate the Nigerian real estate market, particularly when verifying the authenticity and legality of the "Certificate of Occupancy," which serves as the official title deed in Nigeria.

We have actually covered this specific document (among others, like the sales contract) in our property pack for Nigeria.

In this article, we will give some insight to ensure a smooth and legally compliant property transaction in Nigeria.

However, please do not forget that this blog post is for informational purposes only and that we are not legal experts. It's always advisable to consult with one. They can indeed thoroughly examine your specific situation and provide you with the most appropriate and tailored advice.

What is the Certificate of Occupancy in Nigeria?

In Nigeria, the Certificate of Occupancy, commonly referred to as the "C of O," is a crucial document in real estate transactions.

It's essentially a land title document issued by state governments to landowners and property buyers as a legitimate proof of ownership. This certificate is pivotal because it certifies the legal right of a person to occupy a piece of land.

Unlike other property documents in Nigeria, such as the Right of Occupancy or the Governor’s Consent, the Certificate of Occupancy stands out because it's the most recognized and widely accepted proof of ownership.

The Right of Occupancy is usually a precursor to obtaining a C of O, especially in federal lands, and signifies a lease from the government, but doesn't provide the comprehensive ownership rights that a C of O does.

Governor's Consent, on the other hand, is needed when a property with a C of O is being transferred or sold; it's the approval from the state governor for that transaction.

The legal rights conferred by a Certificate of Occupancy are significant. It proves that a person has the leasehold rights to the land for a term, usually 99 years. With this certificate, you are legally recognized as the occupant of the land, which allows you to use the land for residential, agricultural, or commercial purposes, depending on the specified use.

However, it's essential to note that it doesn't confer freehold rights; that is, the land still ultimately belongs to the government. You're more of a leaseholder than an outright owner.

The reliability of a Certificate of Occupancy lies in its legal recognition and acceptance. It is a formal document backed by law, making it a reliable proof of land ownership. However, it's crucial to ensure that the document is genuine and properly registered to avoid disputes or fraud.

Regarding what the Certificate of Occupancy does not confer, it's important to understand that it doesn't grant absolute ownership of the land forever.

After the lease term (usually 99 years), the land reverts to the state, and the owner might need to renew the lease. Also, it doesn't override existing legal issues or disputes on the land; if the land was under dispute before the C of O was issued, those issues might still need to be resolved.

The impact of having a C of O on resale and inheritance is significant. For resale, having this document makes the transaction smoother and more appealing to buyers, as it's proof of legal ownership. In terms of inheritance, the rights to the property can be legally passed down to heirs, making it easier to handle estate matters.

For foreign investors, having a Certificate of Occupancy provides a level of security and certainty in their investment, as it's recognized by the Nigerian legal system as valid proof of land lease rights.

However, foreign investors should be aware of any specific regulations or restrictions that might apply to non-Nigerian property owners.

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How to verify a title deed in Nigeria?

The process

Verifying the authenticity of a Certificate of Occupancy (C of O) in Nigeria is a vital step in real estate transactions to ensure the property title is legitimate and to avoid scams.

The process involves several key steps and entities.

Firstly, the primary government body to contact for verifying a C of O is the Lands Registry in the state where the property is located. Each state in Nigeria has a Lands Registry responsible for all land-related documentation.

When you approach the Lands Registry, they can confirm whether the C of O presented to you is registered and valid. It's important to check that the details on the certificate, like the plot number and property size, match the records in the registry.

The Surveyor-General's Office is another government body that plays a crucial role. They can verify the survey plan attached to the C of O, ensuring that the land coordinates and measurements are accurate and correspond to the actual land in question.

Lawyers specialized in property law are invaluable in this process. They can help navigate the legal intricacies of land ownership in Nigeria, perform due diligence, liaise with government offices, and help interpret the information obtained.

Notaries in Nigeria certify documents and agreements rather than verify the authenticity of a C of O. However, their involvement adds a layer of legal acknowledgment to the documents involved in the transaction.

Real estate agents can assist, particularly in guiding through the initial stages of the verification process. They are often familiar with the local property landscape and can provide practical advice and contacts.

However, their ability to authenticate a C of O is limited compared to legal and governmental verification.

Specific tips to avoid scams and identify red flags include cross-checking all property details on the C of O with the actual property and the records at the Lands Registry and Surveyor-General’s Office.

Be wary of C of Os that appear new for properties that are purportedly old. Verify the seller’s identity and ensure it matches the name on the C of O. Look out for any discrepancies in land size, location, and other details between the C of O and the actual property.

Be cautious if the transaction is being rushed or if you're being pressured to make payments before completing due diligence. Always involve a competent property lawyer for legal guidance.

Be skeptical of deals that seem too good to be true, such as properties in prime locations being sold at significantly lower prices than market value.

By following these steps and tips, you can significantly reduce the risk of falling prey to common scams and ensure a safer property transaction in Nigeria.

What to check

Understanding the history of a property in Nigeria, particularly its past ownerships and transactions, is crucial in real estate dealings.

This history can be accessed and traced primarily through the Lands Registry in the state where the property is located. The Lands Registry maintains records of all registered land transactions, including changes in ownership, mortgages, and any other encumbrances.

To interpret these records, it may be necessary to seek assistance from a lawyer or a real estate professional, as they can help you understand the legal jargon and the implications of various entries in the records.

Knowing a property's past is important for several reasons. It helps in verifying the legitimacy of the current seller and ensuring that there are no disputes or irregularities in the ownership chain. It also provides a clearer picture of the property's market value and helps in making an informed decision.

To check for outstanding debts or liens against the property, you should inquire at the Lands Registry and possibly the local court.

Debts or liens against a property can be significant encumbrances for a new owner. If you purchase a property with such encumbrances, you may become responsible for settling these debts. Furthermore, these liabilities can affect your ability to obtain a clear title to the property or secure a mortgage.

Verifying the accuracy of the property's measurements and boundaries as stated in the title deed is another critical step. This can be done by comparing the descriptions in the deed with an actual survey of the property, conducted by a certified surveyor.

Discrepancies between the deed and the actual measurements or boundaries need to be resolved before proceeding with the purchase, as they can lead to disputes with neighbors or legal challenges in the future.

To resolve potential discrepancies, you would typically engage a surveyor to conduct a fresh survey. If the new survey results differ from those in the title deed, it may be necessary to update the title deed or even re-negotiate the terms of the property transaction.

Understanding zoning laws and land use restrictions is also important. This information can typically be obtained from the local planning authority or municipal council. Zoning laws determine how a property can be used, whether for residential, commercial, agricultural, or industrial purposes.

Land use restrictions can impact future development plans or even the current use of the property. For example, if you plan to build on a piece of land, you need to ensure that your intended use complies with local zoning regulations.

After our research and the feedback collected from our local real estate partners, we have written an article about the risks and pitfalls when buying a property in Nigeria, you might want to check it out.

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How to update the title deed after the property transaction in Nigeria?

In Nigeria, updating the title deed, after purchasing a property, involves a specific process.

Once the property transaction is complete, the new owner must apply for a change of ownership with the state's land registry where the property is located. This process starts by submitting the original C of O, along with a duly completed application form for the change of ownership.

You will also need to provide the sales agreement, a sworn affidavit indicating the purchase, and the receipt of payment for the property.

The land registry then reviews the application to ensure all requirements are met and that there are no outstanding issues on the property, such as disputes or liens. Upon successful review, the new owner is required to pay a fee for the change of ownership.

Once the fee is paid, the land registry issues a new C of O in the name of the new owner. This updated C of O is the legal document confirming the new owner's rights over the property.

After acquiring the property and verifying the title deed, it's advisable to consider various types of insurance and additional protections. Property insurance is essential to protect against risks like damage due to natural disasters, fire, or theft.

In Nigeria, it's also prudent to consider title insurance, which can offer protection against any future legal challenges to your ownership. Liability insurance is another consideration, covering any accidents or injuries that might occur on the property.

For foreign owners, understanding the implications of the title deed in relation to Nigerian inheritance laws is crucial. In Nigeria, inheritance laws can be complex, especially for foreigners.

It's important to note that property ownership in Nigeria does not automatically grant residency or citizenship rights.

Therefore, it's advisable for foreign property owners to consult with a legal expert in Nigerian property law to understand how these laws affect property inheritance, particularly in scenarios involving heirs who are not Nigerian citizens or residents.

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This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.