COMMERCIAL REAL ESTATE DEVELOPMENT
The term real estate means physical property. A commercial real estate is one of the main types of real estate and it is used to refer to buildings or land intended to generate profit. The concept of commercial real estate development in Nigeria also includes the residential real estate and the industrial real estate used for the manufacturing and production of goods.
Essentially, the major commercial real estate development in Nigeria involves any property or building used for a profit-making purpose such as malls, office building, and residential buildings among others.
Commercial real estate development in Nigeria is a business process encompassing activities that range from the renovation or conversion of existing buildings for commercial needs and acquisition of land to develop a commercial purpose property.
By and large, property development involves the process of purchase and development of a real estate with the aim of increasing its values and generates an annual or quarterly or monthly rent from it.
Several Federal Laws and State Laws govern commercial real estate development in Nigeria. Some of these laws include the followings:
Legal Framework for Commercial Real Estate Development
Around the world, governments of emerging economies are beginning to establish controls in industries with significant potential for growth such as real estate. The Land Use Act of 1978 stipulates that all land comprised in the territory of each State and such shall be held in trust and administered for the use and common benefit of all Nigerians. This implies that the highest interest a person or company can own on land in Nigeria is a mere right of occupancy as it was confirmed by the Supreme Court of Nigeria in the case of Nkwocha v. The Governor of Anambra State.
Nevertheless, the right to own a property in Nigeria is a constitutional right enshrined in the constitution and any derogation from such right must be justifiable within the exceptions permitted by the Constitution.
The first step towards the commercial real estate development in Nigeria is definitely the acquisition of landed property. In our previous article, we discussed the procedure and legal framework for buying land in Nigeria and also gave an insight into how to buy any property in Lagos.
The Lagos, because of its commercial versatility, remains the leading state in terms of commercial property development activities. Owing to this fact, Lagos State has a number of laws governing real estate. One of the major laws governing the commercial property development transaction in Lagos is the Urban and Regional Planning and Development Law.
Urban and Regional Planning and Development Law of Lagos State
This law provides for the administration of physical planning, urban development, urban regeneration, building control in Lagos State and for all connected purposes. The law assigns the overall administration and responsibilities of planning and development in Lagos State to the Ministry of Urban and Regional Planning. These administrations and responsibilities are to be carried out through the following agencies:
The PPA is responsible for giving permits for any form of physical development on land in Lagos State. Developers and builders are mandated to obtain permits first before commencing any construction on any land in Lagos.
The BCA is responsible for ensuring compliance with building control regulations. It has powers to remove illegal and non-conforming buildings.
The URA monitors and identifies areas in Lagos State qualified for upgrading and it advises the State on redevelopment and renewal programmes accordingly.
The law also has a criminal sanction, which may be payment of fines of up N500, 000 or one-month community service or both.
The Urban and Regional Planning and Development Law of Lagos State is not the only law governing the commercial real estate development in Lagos. There are a host of other Laws and Act every developer must comply within developing a real estate for commercial purpose in Lagos and generally in Nigeria.
The chiefs among those laws are the Land Use Act, Conveyancing Act and Property and Conveyancing Law, which primarily govern and regulate the title and ownership of land in Nigeria.
By Real Estate Law Department at Resolution Law Firm, Nigeria
Email: [email protected]
Tel : +2348099223322