Investing in real estate is all and good, but if you do not have a clue about the laws that govern real estate in Nigeria, you may find yourself stuck in a deep quicksand of losses borne from your ignorance.
We do not want that to happen.
I have taken the time to write you this post, so you can be abreast of the legal aspects of investing in real estate and the extent of the state’s power on properties.
You know the saying, ignorance of the law is not an excuse, so this is me bringing the law to you, saving you the cost of legal fees.
The State Of Real Estate Investment In Nigeria
This is one of the major investments attracting both local and foreign investors.
From the commercial city of Lagos to the centre of power, Abuja, several individuals and companies engage in real estate investment, although many also buy real estates for personal use.
When you want to invest in real estate, you often hear them tell you to focus on the property and the environment…
…but (almost) no one really tries to be abreast of what the law stands in regards property law and so when investors fall into a ditch, they begin to wonder where they went wrong.
Luckily, I got you. Let’s talk about legal factors to consider for real estate investment.
Laws Governing Real Estate Investment in Nigeria
Several laws are regulating real estate in Nigeria.
Real Estate is regulated by federal statutes such as the Land Use Act 1978 and Land Use Law of various states among others.
The Land Use Act 1978 is the principal law enacted to regulate ownership of the real estate in Nigeria.
By the provisions of the Act, the power to control and administer all land situated within a geographical area of a state is vested in the State Governor for the benefit of the citizens.
The Governor is responsible for granting a right of ownership for individuals and corporate bodies to hold and use the land for a limited-term, and such grant is evidenced by the issuance of a Certificate of Occupancy or Governor’s Consent.
By the provision of the Land Use Act, it becomes unlawful to transfer any interest in land without first obtaining the consent of the governor of the state where the land is located, as provided under Section 22 of the Land Use Act.
What You Should Know About Buying Real Estate Properties In Nigeria
Acquisition of real estate begins with the pre-contract stage of conducting due diligence on the land to be acquired to discover issues such as…
– The nature of the title of the vendor
– Pending litigation on the land (if any)
– Interest to be alienated
– The capacity of the vendor
– The physical condition of the land
– Encumbrances on the land
– Land survey
– And whether the land is under government acquisition
At this stage of land acquisition, it is advisable to engage the services of a property lawyer for proper advice and guidance.
After due diligence has been conducted and the acquisition of an interest in land has been completed, certain documentation will be required.
Transactions for the transfer of land interest above three years are required to be evidenced in writing and by a deed duly executed between transacting parties.
Post completion stage of real estate transactions involves perfecting the title of interest acquired by a land purchaser.
The purchaser of an interest in real estate is responsible for ensuring that all costs and taxes required for the perfection of the title are paid.
The Perfection Of The Title Involves Certain Stages, Such As;
The Land Use Act provides that a statutory holder of occupancy must obtain the Governor’s consent of the State where the real estate is located for a valid transfer of an interest in real estate by way of assignment, mortgage, lease, sub-lease, or otherwise.
Stamping of the document
Under the Stamp Duties Act, the stamping of transfer of an interest in real estate documents must be done within 30 days of the execution of the deed of transfer instrument. Stamping of the document is a condition to be satisfied for registration of transfer of an interest in the land document.
Registration of document
Registration is a compulsory process for deed of transfer of interest, which involves registering the holder of an interest in real estate as the owner to the exclusion of others. Registration of transfer of an interest in land must be done within 60 days of execution of the deed of transfer.
Can A Foreigner Buy Property In Nigeria?
Generally, under Nigerian law, foreigners are restricted from investing directly in real estate in Nigeria.
The restrictions placed by the law are to limit or control foreign monopolization of land ownership in Nigeria.
However, by the provisions of the Acquisition of Lands by Alien Laws, of the States of the Federation, foreigners may be allowed to acquire real estate from a Nigerian citizen in Nigeria, but such acquisition is subject to the prior approval of the state governor.
Foreigners can also invest in real estate by the acquisition of land through a corporate body incorporated in Nigeria.
Hence, for foreigners looking to invest in real estate in Nigeria, they must ensure that the prior approval of the state governor is first hand and obtained.
In the end, real estate investment is one of the leading areas of investment that has contributed to the financial economy in Nigeria.
However, Nigeria’s real estate sector is still witnessing a lot of crises, which include fraudulent practices by land grabbers, breach of contract by real estate sellers, sale of government acquired lands, among others.
Considering all these problems, the real estate buyers and investors are advised to always retain the services of good real estate solicitors, agents and firms to navigate such investments.
Priment Realty is your best choice, because we provide you with the safest, best, vetted and worthy real estate investment offers suited specially for you.
We do not play with our clients, and we rejoice when they get their ROI’s.
Talk to about your real investment needs today!