• Thursday, March 28, 2024
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BusinessDay

What you did not know about buying property in Lagos

Beware of fake estate developers, Lagos cautions home buyers

Lagos, Nigeria’s commercial capital means almost everything as far as property business or transactions are concerned. Lagos is the headquarter of Nigeria’s real estate business which explains why investors—individual and institutional, domestic and foreign, small and big—all see the city as a destination.

Though the city nourishes in terms of providing opportunities leading to huge, sometimes unimaginable, returns on investment, it also devours and many people have had their fingers burnt trying to have a slice of what they see as a prime investment asset class.

This later instance is the reason ‘buyers should beware’ and as much as possible know what should be known and do all that should be done before buying property in this city of many colours. These are especially necessary so that the buyer can buy and go to sleep.

Besides the Lagos Real Estate Regulatory Authority (LASRERA) Law, the Land Use Charge of 2018 and Land Registration Law, a property buyer needs to know about the state’s (simplified) Conveyancing process.

Deborah Jesusegun, a senior researcher at BuyToLive, notes that while the conveyancing process is usually the most challenging part of buying property, lack of knowledge on the main documents required can lengthen it even further.

She highlights major documents needed to complete property purchase, including:

Certificate of Occupancy (C of O) which is a document issued by the government to the lessee of the land, to own and use the land for 99 years. Only one C of O can be given on a parcel of land. This means that if an owner with a C of O decides to sell his property, another C of O cannot be assigned on that same land. The buyer would need another document that proves he is the owner of the land usually through the Governor’s Consent.

Read also: Lagos makes case for consumer satisfaction

Governor’s Consent is a document signed by the governor to consent on the transfer of a property from one person to another. This is especially important in cases where agents sell land to many people at the same time. This whole process, according to the state government, should not exceed more than 30 days. However, in reality, it can take up to three to six months.

Deed of Assignment is a document that shows that the seller has transferred all his rights and interests to the buyer. It is usually prepared by the lawyer of the buyer and then vetted by the seller and his lawyer, and then signed. This document contains the details of the transaction and description of the property being sold and is only considered legitimate upon registration in the land registry and obtaining of the governor’s consent.

Deed of Conveyance is yet another similar to a deed of assignment. It was previously considered a proof of ownership of a property/land until the Land Use Act 1978 came into effect. Some old houses in parts of Lagos still have these as their title document.

Deed of Mortgage is a document required in the instance that financing is required. It gives the mortgagee (lender of a loan) an interest in the property. If the borrower of the loan defaults on loan payment, the holder of the document can take possession of the property.

Contract of Sale, Letter of Allocation, and Receipts: Contract of sale document is a document that indicates the purchase of a property while the letter of allocation shows that a property or land has been allocated to an individual, either from the state or a private developer.

On the other hand, a payment receipt indicates that the seller has received a specific amount of money for the sale of the property in question. Even though these three are important evidence of a land or property transaction, they do not stand as legal title documents and they cannot be perceived as a deed of assignment.