The perfection of Title in Lagos State simply means registering an interest in a property with the government.
When purchasing a property in Lagos or elsewhere in Nigeria, it is statutory for the buyer of the property to obtain proper title register the said property with the government.
The major governing the registration of properties in Nigeria is the Land Use Act of 1978. Section 22 of The Land Use Act states that;
“it shall not be lawful for the holder of a statutory Right of Occupancy granted by the Governor, to alienate his Right of Occupancy or any part thereof by assignment, sublease etc. without the prior consent of the Governor”
What this implies in simple language is that even if a property has a Certificate of Occupancy, which makes the beneficiary the legal interest holder on the land, if he decides to resell the property, since the land is held in trust by the State Government, the Governor needs to approve that transaction. Otherwise, the title that will be transmitted is not perfect and it means that the final authority on landed matters is not aware of the transaction as mandated by the Land Use Act of 1978.
For many, buying a piece of land or real property is all about finding a vendor willing to sell and meeting the price for the property. Many people fall into the mistake of dealing with vendors of properties in trust, assuming that the fact that they have known one another for donkey years or the fact that an agent has assured them of good title is sufficient to avoid future troubles with respect to the land or real property.
It is of paramount importance to take certain steps prior to the purchase of land, or land with structure during the course of purchase and even after the purchase has been made for the sake of securing one’s interest in the said property.
A willing purchaser as a matter of importance must investigate the title of the vendor to the said land and in some cases the track record of such vendor in order to forestall any future legal issues.
Prior, to the perfection of title, there are various steps to follow when purchasing a real in Lagos, which shall be briefly discussed below.
At this stage parties (vendor and purchaser) meet and discuss on the property: price, mode of payment, nature of vendor’s title etc. After parties have agreed on the purchase price a Contract of Sale Agreement is drawn up pending when the Purchaser would carry out investigation to deduce the nature of the Vendor’s title to ascertain that the property truly belongs to the Vendor and is free of any encumbrance.
At the point where the contract is exchanged the vendor is deemed to hold the land in trust for the purchaser till he pays, and all conditions therein fulfilled. The essence is to deduce a good root of title from the vendor. Until the execution of the contract of sale, there is no obligation on the vendor to establish that he is the owner of the title which he intends to convey, but once the contract has been exchanged, he is under duty to do so. The Contract of Sale Agreement may include terms as agreed by parties. It is not unusual for parties to agree to a deposit on the total value of the property at this point pending the result of the investigation of title by the purchaser.
INVESTIGATION OF TITLE STAGE
After the execution of the contract, the purchaser would collect title documents from the vendor. These documents should be sufficient in themselves without any extrinsic evidence to establish the title to the land. Such documents may include Certificate of Occupancy, Deed of Assignment/Conveyance, Survey Plan, Registered Title, Court Vesting Order etc.
Once the relevant documents (usually copies) have been obtained from the vendor, the Purchaser’s solicitors proceed to carry out an investigation to confirm the vendor’s title and to ascertain that there are no defects in the said title to the property. The investigation involves several searches at various registries where records of properties and encumbrances are kept. Searches can be conducted in the following ways –
• Search at the Lands Registry – The Land Instrument Registration Law of each State establishes a land registry for the State, where documents relating to land within the territory are kept, and it varies from one State to another.
• Search at the Corporate Affairs Commission (CAC) – This is necessary where the vendor or past owner is a company incorporated under Companies and Allied Matters Act. Apart from the searches at the land registry, there should be a further search at the CAC to reveal whether or not there is an encumbrance or any charge whatsoever on the property.
Companies are required to file annual returns yearly with the CAC which is always accompanied with a company’s financial statement; the financial statement will reveal the company’s assets (where there are any) as well as any charges or encumbrance on same.
• Search at Probate registry – This is a search conducted to reveal whether or not probate has been granted on any estate and to ascertain the personal representatives or executors of a testator in cases of properties belonging to the estate of a deceased. Without a grant of Probate and/or letters of administration, the vendors do not possess the requisite authority to sell the property of a deceased person.
• Traditional evidence – This is done by investigating or verifying from the principal members of a family or from the community and heads of the community where the property is subject to family or community ownership. It is crucial to verify that all relevant consents have been obtained and that the title is neither void nor voidable.
• Court judgments – This is a search conducted to see if the land is subject to any court litigation, and if any, the outcome of the dispute; or whether the vendor is a personal representative or beneficiary in a probate dispute which entitles him to convey the property.
• Physical inspection – This is a personal visit to the property in question in order to find out if there is any issue with the property, or to ascertain the actual size of the land and whether it conforms to the dimensions on the survey plan at the Lands registry.
In addition to the above, investigation of real property could take a different turn depending on the type of property and the caliber of persons involved in the transaction. For instance, due to the recent development of collapsed and collapsing buildings in Lagos State, it is advisable for clients who are looking to purchase high rise buildings to request for profiles of the developers of the property, certificate of structural integrity/stability, kind of foundation on which the building is erected etc.
For properties located in choice areas which cost large sums of money, it may not be out of place to investigate the profile and record of the vendors to ascertain such persons are not on the watch list of agencies such as the Economic and Financial Crimes Commission, the ICPC or whether the property in question is not a subject of any investigation. This would prevent the risk of confiscation of the property by the Federal Government or any anti-corruption agency.
DEED OF ASSIGNMENT STAGE
After the purchaser, through his solicitor has ascertained that the vendor has a good title to the land, the next stage is the preparation of a Deed of Assignment/Conveyance and execution of same by the parties with respect to the property to be sold.
The Deed of assignment can be prepared by the purchaser’s solicitor and vetted by the vendor or his solicitor after which several copies would be produced (usually called engrossed copies) then the documents would be executed by parties and their witnesses. At this stage any outstanding sum or balance would be paid by the Purchaser.
After this, the Vendor shall submit all original title documents to the purchaser and in the case of an already developed property shall hand over the keys to the purchaser. In the event that there are tenants in the property this would be the appropriate time to introduce the new owner of the property to the tenants usually via a notice.
It is important to note that the Deed of Assignment is to be accompanied with the survey plan of the property in question as these are part of the documents required for perfection of title which is the next stage.
It is compulsory that every deed of assignment contain a consent section for the governor of the relevant state where the land/property sold is situated.
Many people who are oblivious to legal requirements usually think that after executing deeds of assignment or conveyance as the case may be that they have done all that is required of them and continue to enjoy their newly acquired property. However, there is still a lot more to be done to “perfect” the title to the newly acquired land. These include application for Governor’s consent, payment of stamp duties and registration of conveyance or assignment at the Lands Registry. This is done in order to ensure compliance with relevant statutes and protect the legal validity of the purchaser’s title to the property.
APPLICATION FOR GOVERNOR’S CONSENT;
There are two types of Governor’s approval when it comes to landed property transactions. One is the approval to transfer part or all of a seller’s interest in the landed property to a third party and the other is the consent to mortgage. The latter is usually required when pledging a property as security for a credit facility.
The Land Use Act prohibits alienation of statutory right of occupancy without the consent of the Governor. It makes it mandatory for the holder of a statutory right of occupancy to seek and obtain the consent of the Governor of the State where the land is situated before alienation or sale of interest in land, otherwise the transaction shall be void. Where the property however is subject to a customary right of occupancy, the consent required is that of the local government where the land is situated.
The purchaser should always endeavor to make sure the vendor signs the application letter for consent, this is because it is the duty of a holder of the right of occupancy to seek consent of the Governor to alienate.
Below are the essential documents needed to obtain a Governor’s Consent in Lagos State and by implications to perfect a title to land:
- A duly completed application made on Land Form 1C which must be dated and signed by the parties to the transaction and sworn to before a Magistrate or Notary Public.
- A cover letter from the Solicitor/Applicant filing the application for Governor’s consent.
- A certified original copy of the Title document of the property.
- The charting fee, endorsement fee and Form 1C made payable to the Lagos State Government.
- Four copies of the Deed of Assignment with survey plans attached in each copy.
- Photograph of the property.
- A current tax clearance certificate of the parties involved in the property transaction.
All these documents are to be forwarded to the office of the Surveyor General for charting. If there are no defects in the survey plan, a clean report is sent to the Lands Bureau and a demand notice is issued to the applicant for the following fees, which are percentages of the assessed value of the property. The following fees are paid via bank draft in the name of Lagos State Government and for which receipts will be issued to the applicant in furtherance of the process below:
- Consent fees of 1.5%
- Capital Gains Tax of 0.5%
- Stamp Duty of 0.5%
- Registration fees of 0.5%
Currently, the entire process of getting approval and perfecting a title in Lagos State takes at least three months to conclude if all assessment and required fees are paid as quickly as possible and there are no queries or defects in the file/documents of the applicant. However, the State Government has a set target period of 30days.
Listed below are the steps an applicant will need to take in perfecting a land title in Lagos State:
1. Application & accompanying documents are to be received at the Land Bureau from the Applicant.
2. Application is uniquely referenced for identification purpose at the Lands Bureau.
3. Investigation of the status of the land through charting will be done at the office of the Surveyor General.
4. Assessment of Property to determine applicable fees by officials of the Lands Bureau.
5. Issuance of Demand Notices at the Accounts Office at the Lands Bureau.
6. Applicant pays and forwards treasury receipts of payment of fees to the Accounts Department.
7. Approval & endorsement of documents by the Governor or Commissioner.
8. Stamping of documents at the Lands Bureau.
9. Registration of documents at the Lands Registry.
10. Collection of all registered documents by the applicant at the Lands Bureau.
Registration or perfection of title is done in order to avoid fraud and problems arising from the suppression or omission of instruments when title is deduced, in case of subsequent transactions it would show a registered interest in the said property.
While registration does not cure any defects to title to property, it is important to register such documents as they are documents affecting land in which one party confers, transfers, limits, charges or extinguishes in favour of another party a right or title to or interest in land.
Documents transferring title to land are registerable instruments and failure to so register them would render them inadmissible in court.
By Real Estate Law Team at Resolution Law Firm