One of the most fulfilling time in one’s life is usually when a long standing dream is achieved or actualized. Purchasing a property or a plot of land can represent such a period in a life. In fact, for 95% of individuals a real estate purchase will be the largest investment they will make in their entire life. It therefore is imperative that it is done properly and correctly with the entire transaction full documented and formalized.
It is necessary to underscore the fact that the use of a professional legal Practitioner or Estate Surveyor and Valuer in undertaking this acquisition is not negotiable There is no point cutting corners and losing your life savings or getting involved in some unending litigation.
In buying a property, one needs to decide on one’s requirements and type of property – flat, bungalow, detached house, or even bare lands. This of course is personal and subject to needs and quantum of finance available.
Viewing of the property, negotiation of price (and if need be a professional valuation) and agreeing on sale price will follow.
A legal due diligence is always necessary before consummation of a purchase. Legal diligence involves searching the title at the relevant Land Registry to determine if there are encumbrances – unpaid mortgage, litigation etc.
Where the property has an unregistered title (only 5% of Nigeria land mass is titled) due diligence may involve going back to the original family or owners to trace and create a history of ownership.
With legal diligence concluded payment modalities can be agreed upon. Currently the law is that for any transaction over
N10 million, payment should be effected vide bank transfers. Below N10 million bank certified cheques can be used.
Many times, where the volume is manageable, buyers and vendors for comfort may agree on raising several bankers’ cheques for
The risk here is that it may trigger the anti-money laundering authorities and create the impression that there is something untoward about the transaction.
Documentation of the purchase is key. A lawyer would usually prepare the Deeds of transfer, and a purchase receipt. These would be signed by the vendor on closing and exchanged together with the original documents for consideration.
Once the transaction is concluded, it is important to commence the transfer of title to the name of the new buyer. This involves submitting an application at the Lands Department of the State Government.
Documents to be submitted include signed Deeds of transfer, tax clearance certificate of both parties to the transaction, survey plan, Form 1C (obtainable from the Land Department) evidence of payment of Development Levy, affidavit of ownership of the land etc. Documents vary from state to state but these are the key ones.
The submitted documents will be processed, and a number of fees paid (usually 15% of property value).
- Consent fees
- Stamp duties
- Capital gains tax
Follow up is necessary to ensure that the title processing moves from table to table and in the best times if there are no queries one can have title in his / her name within 90 days.
It is important when buying a tenanted property to get details of tenants and their lease status and if vacant possession is needed, pre-agree this before closure. Document any agreements in this regard and if necessary, withhold a percentage of the sale price to be paid only when vacant possession is effected.
When buying land because of issues of Omo Onile etc especially for family land it is best to take possession immediately payment is effected. It is not only important to take immediate possession, commence fencing or make one present known to indicate a change in status of the land or ownership. The reason for this is that if there are adverse claims missed at the legal diligence stage your presence at the land immediately alerts other claimants and they will make themselves known.
In conclusion, property acquisition is encouraged and should be undertaken with professional guidance.
Remember that 90% of the world’s billionaires made their billions because they invested in real estate.