For Nigerians with enough money to throw around or those who have connection with persons in high offices, getting a title for their landed property can almost happen in a blink of an eye, while for others it can take almost forever.
Checks by BusinessDay revealed that Nigerian property owners, estate developers, legal practitioners and other stakeholders in Lagos state have had different experiences, at one time or another, in getting their land documents in a country where 90 percent of houses are built with own savings.
Issues around the rigorous processes,long duration and the high cost of obtaining land documentations are among key setbacks identified and highlighted by industry stakeholders.
Jide Ogunleye, CEO of Denaro Properties Limited, a business and investment strategies firm with emphasis on real estate, said bureaucracy combined with corruption in the titling process will not allow things to get done.
“Whatever has been done has still not solved the problem of titling, forget the e-certificate. The people that will provide the e-certificate can be bottlenecks in the process,” he said.
He explained that this is because “people won’t move your file, except they are paid or something, and as such it is likely that in some cases you can be on your land title for a very long period of time.”
Omobola Ayoola, business development manager at Joe Etoniru & Associates, a real estate company, affirms, saying that the process of getting land title “is not cut-and-dried; it is not like you submit the form and immediately your form goes through some people and you get your certificate, no.”
She notes that the cost of getting the document can be as high as N1 million to N2 million, adding that it has always been expensive.
But, according to the Lagos State Business Made Easy (BME) document driven by the Presidential Enabling Business Environment Council (PEBEC), there has been a reform in the method of operations by the Lagos State Land Bureau as it has introduced the use of technology in its day-to-day transactions.
The BME document, however, explains that prior to the implementation of the reforms, “applicants seeking to register property in Lagos were required to pay fees at different stages and carry out visits to the land registry before registration could be completed.”
It notes that “the reform initiatives put in place have simplified this process by making payments possible online, automating procedures and reducing charges.” As a result, the time required to register property has reduced from 105 days to 75 days, and also the number of procedures required to register property has reduced from 12 to 8.
Adeniyi Akinlusi, president of Mortgage Bankers Association of Nigeria (MBAN) and CEO, Trustbond Mortgage points out, however, that the cost of land titling has reduced compared to what it used to be before Bababunde Fashola’s administration.
“So in terms of cost, it has come down. They have also tried to reduce the administrative bottleneck but there is room for improvement. However, I am aware that the new law being reviewed by Lagos state is going to streamline titling in terms of the processing,” Akinlusi said.
Meanwhile, possession of land title documents is one of the most important ways of laying claim to ownership of a property.
Ayo Ibaru, COO/Director, Real Estate Advisory at Northcourt Real Estate, explained that the process of land documentation in Lagos state has attained an almost legendary status in property development lore.
“There has been many a complaint about unnecessary hassles on the path to title perfection. The process takes too long. The requirements border on the onerous and the officials in charge could be more helpful,” Ibaru noted.
But he added that there have been some improvements, saying that transaction speed has gotten better as the government has made concerted efforts to introduce technology to the process, including the commissioning of an online system to facilitate the processing of land documentation.
Narrating his frustration with the process of getting land title for his clients, a legal adviser who asked not be quoted for the fear of losing his job said in his last eight years of working on the field, nothing has changed about getting a land document.
“The time it takes to get the document has not improved; it only just depends on how fast you want to get it done. It is for the highest bidder, sometimes if you have someone at the top, it can be faster but with serious follow up which would have involved you paying heavily to the officers you will be able to get it faster than others”.
Over the past three years, Nigeria has implemented more than 140 reforms, increased its Distance-to-Frontier (DTF) score by over 11 basis points, and moved up 24 places in the World Bank Doing Business Index (DBI) rankings, as revealed by PEBEC Reforms Reference Handbook.
Some of the highlights of reforms by successive administrations in lands bureau to date, as compiled from the website of the Lagos State Government Land Bureau include the 30-Day Governor’s Consent and Reduction of payments on Consent fees, Capital Gains Tax, Stamp Duty and Registration fees.
Ibaru applauded these efforts qand the resultant improvements, but pointed out however that, in all, it still leaves much to be desired for a state that prides itself as ‘Centre of Excellence’.
“The governor’s consent, by many accounts, can be obtained within 3 – 6 months of completing the application. The cost, however, could be improved as officials still charge approved and not-so-clear fees at different stages of the process,” he explained.
The administration of the land use act means that everything must be issued by the governor, which according some real estate experts takes a lot of time. This means that when a mortgage is to be registered it must be with the consent of the governor, and this is cost-inclusive.
The transaction cost of title perfection sometimes gets between 7 to 8 percent of a mortgage loan amount. A loan applicant sees a situation whereby he wants to borrow N10 million and he needs another N1 million or N700,000 as perfection cost, explained Abiodun Akanbi, head of strategy at Infinity Trust Mortgage Bank
Mary Ikechukwu disclosed that she had been processing her land title for over 2 years and still no sign of going through with it anytime soon. “At the first sight of presenting my file to the officers, they spotted some errors in the documents. Meanwhile, this is not my first time of registering, and so I had to start with the processing all over again,” she lamented.
Continuing, she said, “even with the amount I have paid, the process is still slow and I do not even know the exact issue” adding, “there is need for an efficient online system that will help remove all the human interface in the processing.”
Meanwhile, Nigeria with the highest population in Africa has one of the world’s lowest mortgages to Gross Domestic Product (GDP) rate at less than 1 percent, which obviously lags Ghana’s 2 percent, South Africa’s 30 percent, the U.S rate at 60 percent and that of the UK at 70 percent
According to Akinlusi, all hands are on deck, as the mortgage association was engaging with the government. “If the foreclosure law which is being reviewed now is enacted, like it has been passed by Kaduna state, it will help to streamline titling of property and documentation and when it becomes faster to get title, the cost of development will cost less and then you can start talking about property approval and, if they have building, then mortgage can come in,” Akinlusi assured.