Owning a land or a house is the dream of a lot of people. Sadly, after working hard and saving well, some fall into the hands of fraudsters in the pursuit of this dream of theirs. Below are tips on steps to be taken by a purchaser in acquiring a land or a house in Nigeria in general. Particular reference is made to Lagos.
- Understand the nature of the property.
A property could be commercial, residential, agricultural or mixed-use. There is the need for you to understand the nature of the property in question before deciding to buy. A real estate consultant once assisted a client to acquire a property in Lekki. After the conclusion of the transaction, the client spent a lot of money to renovate the premises for his business. Shortly after commissioning his business, the Resident’s Association of the Zone informed him that the property was situated in a residential zone and he cannot carry out any business of any kind in that area. This led to a serious legal battle. This could have been avoided if he had an understanding of the nature of the property in line with his objective.
Understanding the nature of the property and its location is equally important if you have a plan of re-selling the property. Almost every property appreciates. However, property in certain locations appreciates more. Closeness to social amenities and infrastructure are some of the pointers towards the possibility of increased appreciation.
- Know who is selling.
There is the need for you to know who the seller is. You have to confirm that the person you are discussing with has is the true owner of the property or has the consent of the true owner of the property to sell. (That is, the seller’s authorised agent). Even when the agent discusses with you throughout the negotiation stage, you must meet with the true owner of the property before any payment is made.
- Know why the seller wants to sell.
You need to know why the seller wants to sell his property. You need to know whether there is a defect in the property or if the landlord is in debt or if the landlord wants to relocate to another area. There is a need to find out the reason for the sale so as to make you know how to protect yourself from possible issues in relation to the property.
A real estate consultant came across a property to be cheaply sold sometime ago. Findings in the Land’s Registry showed nothing to be wary about. The agent and the owner were questioned but they were not coming forth with reasons for the unreasonably low amount. A neighbour was interviewed about the property who explained that an occupant in that house dies yearly. Hence, no one is willing to live in the property. Asking questions till you find satisfactory answers is important.
- Physically inspect the property
With the advancement in technology, there is the possibility of tech-savvy clients to feel safe discussing real estate transactions online. However, it is extremely unadvisable to conclude real estate transactions without physically inspecting the property in question. It is equally important to request for copies and title documents before or during the physical inspection of the property.
There was an incident where a duplex was advertised on a piece of land. The Survey plan showing the coordinates was sent to the prospective buyer’s e-mail and he was about making payment when he decided to inform his friend who was a real estate consultant. On getting to the proposed site as shown on the survey plan, it was discovered that it was a bare land with no structures on it at all. How disastrous would it have been if he had already made payment?
This is not to say that there are no legitimate online real estate transactions. A number of real estate transactions have been done by the writer’s Firm based on links gotten online. However, there is the need to exercise extra caution when doing real estate transactions online.
- Conduct a search on the property.
A search can be conducted at the Land Registry of the state where the property is situated to verify the information given to you about the property. It is pertinent to ensure that the information given to you by the seller corresponds with your findings at the Lands Registry. Where there is a discrepancy, it is advisable that such discrepancies be carefully clarified before proceeding with the transaction.
- Conduct an independent valuation of the property
There might be a need to conduct a valuation of the property to ensure that you are paying a reasonable amount for the property. The property might have been over-priced by the seller or the agent might have inflated the price of the property. If the property is unreasonably high, the valuation might be a basis for renegotiation.
Conversely, if the valuation reveals that the amount is unreasonably low, there might be a need to exercise caution before proceeding with the transaction. You might need to ask more questions from the agent and the owner particularly about the reason for the sale. You can also ask questions from the neighbours.
- Obtain transfer documents
Ensure you obtain purchase receipt, contract of sale and ORIGINAL copies of all previous documents of the property from the seller before making payment.
- Make payment to the owner of the property
After you are satisfied with the authenticity of the property and reasonability of the price, you can make payment to the owner of the property. Avoid making payments to the agent, the secretary or any third party. If it is a family property, bank drafts can be made in the name of the family head and principal members of the family to avoid fights over the sharing of the money.
- Take physical possession and file necessary documentation
After payment, immediately take physical possession of the property and file necessary documentation with the government. Gone are the days when you buy a landed property and “leave it to appreciate”. More often than not, such properties are resold by land grabbers (“Omo Onile”) to third parties. The amount usually spent on fighting to get the land back would have been used to build on the land.
If the property does not have a certificate of occupancy, you can commence the processing. If it does, you need to obtain the Governor’s Consent to the transaction.
- Appoint an estate agent
If you cannot manage the property yourself, you can appoint an agent or property manager to manage it on your behalf. The agent usually does so for an agreed fee.
With these steps in mind, it you can safely acquire a real estate property in Nigeria.
Ayobayo Babade is a lawyer, Real Estate Consultant & Dispute Resolution Professional. He heads the legal advisory and Business Development arm of Tope Babade & Co, a firm of Real Estate Consultants & Town Planners. He can be contacted via mail on firstname.lastname@example.org; and via SMS on +2348026132012 (SMS Only).