Types of Property you can Buy In Nigeria

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In my first article, I described the parties involved in land transactions in Nigeria. I also explained how to carefully choose those you deal with, when buying property. In this article, I will talk about the different types of property you may buy, the budget required and the documentation involved.

There are broadly two types of property you may buy, according to the Land Use Act. You may buy land from a community (omo onile) or in an urban area. I will describe both categories.

a. Omo onile or community land: According to the Land Use Act, some land rightfully belongs to communities. You can legitimately buy from them. But please note the following:

– Ask whether the land you are interested in has been excised by the government and ratified in an official Gazette. Ask for a copy of the Gazette (it’s a document) and for the survey plan of the land. Check for the official stamp on the document that states the land is free from acquisition by the government and not committed for future use (for example, for the construction of a railway line in future). Sometimes, the land may not have been gazetted, in which case, simply check that it is free from government acquisition and so, your ownership can be ratified.

– Do an independent survey (which may cost anything from N100,000 to N1,000,000 depending on the area). Independently check the land coordinates at the Surveyor-General’s office using the survey. Then, ask your Lawyer to verify the community’s ownership and any government interest, at the Lands Bureau. Also check whether the land has been designated for residential, commercial or agricultural use. You do not want to buy land for your home, only to be told it’s been zoned for agricultural use alone.

– As mentioned in my first article, please ensure the individual you enter into a contract with has the right to represent the community. They must give you a receipt or contract and a Deed of Assignment. They must also sign the statutory Form 1C that is required, should you decide to pursue your final piece of documentation – Governor’s consent. (All exchange of land must be assented to by the Governor, as the State custodian.) The Deed of Assignment and Form 1C will protect you should omo onile try to resell your land behind your back. All documents must be reviewed and signed in the presence of your Lawyer and then documented at the State Lands Bureau.

– Omo onile property is relatively cheap. You can buy at N250,000 per plot in some parts of Lagos. This is because it’s virgin. Many times, the land has not been cleared, there is no electricity or water and there are no roads. It’s completely undeveloped. Therefore, it is suitable for those planning an estate or large scale commercial development. Then, the cost of infrastructure may be factored into the overall developmental cost. Commercial developers typically buy community land en masse and then resell as individual plots to their clients.

It is better to buy omo onile land that has already been acquired and taken possession of by a developer. As an individual, there are associated costs to buying omo onile land directly, for instance “owo foundation”, “owo decking” etc. You may end up spending an additional N600,000 per plot.

b. Urban Land: If you are not buying omo onile land, then you will probably buy from the following sources –

– Government allocation: Every now and then, the Ministry of Housing sells property on behalf of a state or federal government. If you buy from them (or their appointed agents), you will be given a letter of allocation to subsequently process your Certificate of Occupancy (C of O) from government.

Please note that government only issues a C of O once for previously unoccupied land or fresh developments. If you buy the property from someone else, you will not be issued a new C of O. What you can process is the Governor’s consent for the transfer of ownership, using the Deed of Assignment that is given to you upon sale and transfer, from the original owner to you.

– Real Estate Development: Sometimes, a large scale real estate developer will purchase land from government and receive a global C of O. They will then sell individual plots to you, presenting you with a Deed of Assignment and Individual Survey. An example is Lakowe Lakes. The advantage of buying land from a developer is, the company usually provides utilities – roads, electricity, water and security. You move in to build your home if it’s land, or you move into your home, if it’s a fully built housing structure. As you can imagine, developments that have infrastructure and utilities are much more expensive than virgin community land. In Ibeju – Lekki, such plots are sold for N3,500,000. In places like Ajah, you may spend N7,000,000 and at Chevron axis, N12,000,000.

– Personal property: If someone wishes to sell their personal land or home to you, please ask to see their Deed of Assignment (or C of O) and survey plan. Then, go to the Lands Bureau to verify ownership and location. If it’s an inherited family house, ask to see the Will designating the individual as Executor/Beneficiary or request the Power of Attorney giving the individual the right to sign documents on behalf of the family. Upon sale, a Deed of Assignment will be used to process your Governor’s Consent.

– Distressed property/Court order: If you are buying a property on the market due to an unpaid loan or if you are buying one that was the subject of a previous litigation, please ask to see the court judgement, so you are sure who it is in favour of. Ensure there are no ongoing appeals. After the property has been sold to you, you will receive a Deed.

– Registered Conveyance: This is my favourite type of property title. It predates the Land Use Act of 1978. Under the Land Use Act, property you buy is “leased” to you by the government for 99 years and must be ratified thereafter. Because Registered Conveyance predates the Act, any property you buy with this title is yours forever and you may bequeath it to your heirs in perpetuity. (There’s some property I’m currently eyeing in Ikeja that has a Registered Conveyance title.)

One more thing. When someone wants to sell some land to you, please confirm what the exact plot size is. In Lagos, a standard plot size is 648sqm. There are smaller or larger plots on the market. Be sure of exactly what you’re paying for.

I sincerely hope this write up has been useful to you. If you have questions, please write. If you are considering buying some property and would like my recommendations, please send an email. To be kept up to date on future articles, you may kindly join my mailing list here.

Thank you for reading.

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