REAL ESTATE LAWS AND REGULATIONS
REAL ESTATE LAWS LAW IN NIGERIA
The laws regulating real estate in Nigeria can be classified into federal based laws and state-based laws. At the federal level are laws that govern the country as a whole. There are also regional laws governing some sections of the country. Some of the federal and regional laws are discussed below.
- The 1999 Constitution of the Federal Republic of Nigeria: Section 43 of the 1999 Constitution provides s follows “Subject to the provisions of this Constitution, every citizen of Nigeria shall have the right to acquire and own immovable property anywhere in Nigeria.” Pursuant to this provision, the right of every Nigeria, either individual or cooperation is guaranteed.
- Land use Act of 1978. The Land Use Act changed the arrangement of land ownership before 1978 upon its coming into being. Prior to this law, land used to be owned by families or communities. After the coming into being of this law, lands in the urban areas were vested in state governments and the lands in the rural areas of the country became vested in the local government. The freehold systems of the past were abolished by this Land Use Act and replaced with a leasehold. Every landowner invariably became a lessee to the state government for a specific period of time. The law also provided that the state and local government have the duty of issuing a statutory right of occupancy to lands. The words ” statutory right of occupancy ” shows that the land is not outrightly owned by the person but that it will expire after a period of time certain. The law further provides that land cannot be sold or alienated in any way by the holder of a statutory right of occupancy without the consent of the governor first sought and obtained and there is a penalty for anyone who breaches this provision of the law. Consequently, it will be unlawful for any person whose interest in the property has been vested by virtue of a Deed of Assignment or Deed of Conveyance to decline to obtain the consent of a governor of the state where the property is located
- Nigerian Urban and Regional Planning Act: This act governs the management of urban and regional planning in Nigeria. It also takes care of complaints and grievances on issues like the demolition of houses and the likes.
- Rent control and Recovery of Premises Act: This Act provides steps to be followed by landlords in evicting tenants from his building. The law is strictly against self-help in the eviction of tenants and the landlord must follow the required procedure set down by the law in achieving this.
- Stamp Duty Act: The stamp duty act provides for several instances where a land transaction would involve the payment of stamp duty. It makes provision for the calculation of stamp duty based on the type of property and the amount of money involved in a transaction.
- Capital Gains Tax Act: This Act operates at the federal level and states like Lagos State. This Act provides for a tax that is chargeable upon the disposal or sale of and assets. In the Act, real estate is defined to be one of the assets. The tax is charged on the profits on the proceeds of assets that are sold and also properties sold outside Nigeria but the proceeds brought into Nigeria. This is at the rate of 10 percent on each disposal. The procedure for calculating this tax is also provided for in the laws.
- Conveyancing Act 1881: This Act governs conveyancing and property transactions in both the Northern and Southern parts of Nigeria save for a few states exempted. The Conveyancing Act is one of the oldest real estate laws in operation in Nigeria.
- Property and Conveyancing Laws (PCL): The PCL essentially governs the transfer and general property transactions in the western part of Nigeria. This law is currently domesticated in all western states of Nigeria and it governs the acquisition of properties in the following states- Ogun, Oyo, Ondo, Osun, Ekiti, and some parts of Lagos.
STATE LAWS GOVERNING PROPERTIES
Apart from the Land Use Act, each state also enacts various laws regulating real estates. In Lagos State, the following laws governing properties:
- The Acquisition of Lands by Aliens Law: This law makes provisions for foreigners who want to obtain lands within Nigeria and the process and requirements to be followed by an alien in acquiring lands within Nigeria. Under this law, aliens are also required to obtain the governor’s consent in order to obtain land within Nigeria. The alien cannot also alienate the land in any form whether to a fellow alien or to a Nigerian citizen without obtaining the governor’s consent as well.
- Land Use Charge Law: This law provides a compilation of all land and property-related based rates in Lagos.
- Tenancy Law of Lagos State 2011:This law makes provisions for the tenancy and recovery of premises in Lagos State. The law prohibits collection of rents beyond a period of two years save for only four areas in Lagos State to wit: Apapa, Ikeja GRA, Ikoyi and Victoria Island. The law allows for freedom of contract between landlords and tenants such as issues of the length of tenancy but if some issues or all are not provided for, then the provisions of this law will prevail. The law will also apply to lease agreements as they are similar to tenancy agreements
- The Lagos State Property Protection Law: This law provides protection from the acts of “omo oniles” (land grabbers in Lagos State), as this is a serious issue affecting property owners in Lagos. It prevents the illegal occupation of lands, forceful entry into lands, violence in relation to lands and fraud conducted as regards landed properties. This law also contains some retrospective provisions, protecting people against acts carried out against them even before the law came into being. There are sanctions attached to the breach of the provisions of this law such as imprisonment and payment of a fine. The law also sanctions trespassers and encroachers who remain in possession of land even after they have been told to vacate such lands. Legal practitioners and real estate agents can also be sanctioned if they are involved in any illegal land transactions and be charged for the criminal offense of aiding and abetting.
- Tenement Rate Laws of Nigeria: These taxes are levied on landed properties by local governments, in order to raise income for the local government. This law was established to collect taxes from people who have already built their properties. Tenement rates laws exist in all states within Nigeria.
- Land Instrument Registration Law: The Land Instruments Registration Law of Lagos State mandates the registration of any document affecting land in Lagos State at the Lands Registry. Non-registration of such any document that requires registration implies the document is void. This law together with the Land Use Act regulates the procedure for registering properties in Lagos.
- Registration of Titles Law: This law governs the conveyancing and registration of property titles in some parts of Lagos State. These areas include Ikoyi, Victoria Island, Lagos Island, Surulere, and others.
There are other real estate laws in Nigeria guiding real estate transactions in Nigeria, ranging from sales of land to mortgage of the property to tenancy matters and so on. These laws are enacted to ensure a uniform manner of engaging in real estate transactions, either by buying or renting; to guide on the acquisition and transfer of an interest in real estate; and also to raise revenue for the government.
By Real Estate Law Team at Resolution Law Firm
Email: [email protected]