How to Stay Safe

Staying safe when buying or selling landed property in Nigeria requires careful attention to legal procedures, due diligence, and understanding the specific laws and regulations governing property transactions in the country. The real estate market in Nigeria can be complicated, and property disputes are not uncommon. Here’s a comprehensive guide on how to stay safe:

1. Understand Property Ownership Laws in Nigeria

Before engaging in any property transaction, you must understand the legal framework governing property ownership in Nigeria. In Nigeria, there are two main categories of land ownership:

• Freehold: This refers to land that is owned outright by an individual or entity. It’s common in places like the South West, especially in Lagos.
• Leasehold: This refers to land leased to an individual or entity for a number of years, usually 99 years. It is typical in most parts of the North and Central regions of Nigeria.

The Nigerian Constitution and Land Use Act (1978) govern property rights in Nigeria. The Land Use Act states that all land in Nigeria belongs to the government, and the state government is in charge of land allocation, but individuals can lease it.

2. Perform Proper Due Diligence

It’s essential to verify and investigate a property’s history before purchasing or selling it. Doing so reduces the risk of buying or selling property with hidden encumbrances or legal issues. Here’s how to do it:

• Land Title Verification: Request to see the land’s title documents to ensure they are authentic. The title may be in the form of a Certificate of Occupancy (C of O), Deed of Assignment, or Registered Land Title.
• Verify Ownership: Confirm the identity of the seller and ensure that they are the legitimate owner of the land. You can check with the State Land Registry (through the Ministry of Lands and Housing) to ensure the title is genuine and that there are no encumbrances such as mortgages or court cases.
• Land Search at the Land Registry: Conduct a formal land search at the local land registry office. This will help confirm whether the property is free from disputes, encumbrances, or any outstanding government interests.
• Surveyor’s Report: Hire a qualified surveyor to conduct a land survey to confirm the exact location, size, and boundaries of the property. This helps avoid issues with land encroachment or boundary disputes.
• Check for Existing Disputes: Check if there are any ongoing legal disputes, such as a court case over the land. You can search the court records to confirm this. If there’s any pending litigation, you might want to reconsider or pause the transaction.

3. Hire a Qualified Real Estate Lawyer

Engage a competent and experienced real estate lawyer to guide you through the entire process. A lawyer will help you:

• Review Documents: Ensure that the title documents, sales agreement, and other relevant documents are valid and accurately prepared.
• Draft Sale Agreement: The lawyer will draft a legally binding sale agreement that includes the terms and conditions of the sale, payment schedule, transfer of ownership, and responsibilities.
• Verify the Seller’s Identity: Your lawyer can help confirm that the seller is the rightful owner and not an imposter or someone with fraudulent intent.

A lawyer can also assist with property taxation, ensuring that there are no unpaid taxes associated with the land.

4. Avoid Fake or Fraudulent Titles

Property fraud is common in Nigeria. Be cautious of individuals who present fake or forged documents. Common fraud schemes include:

• Using fake Certificate of Occupancy (C of O) or forging signatures on the documents.
• Selling land multiple times to different buyers (Double selling).
• Misrepresenting the size or location of the property.

To avoid this, always cross-check the title at the Land Registry and verify the authenticity of documents with your lawyer.

5. Ensure Payment is Properly Documented

When making payments, it is essential that all payments are well documented and that receipts are provided. Avoid paying large sums in cash; rather, use bank transfers and ensure that all payments are traceable. For both parties, this adds an additional layer of protection in case of disputes.

6. Conduct a Physical Inspection

Before finalizing the transaction, always inspect the property in person. Make sure the property is as described by the seller and check for any physical discrepancies. If there are tenants on the property, make sure their tenancy agreements are legitimate, and their rights are respected.

7. Execute a Sale Agreement

Once all the documents are verified, and both parties agree to the terms, the sale agreement should be signed. The sale agreement must:

• Be signed by both parties and witnessed by a third party, usually a lawyer.
• Clearly outline the agreed-upon price, payment terms, and transfer of ownership conditions.
• Be properly stamped (for validity), and any relevant documents should be notarized.

8. Transfer of Ownership

The legal process of transferring the ownership of the land to the buyer involves the following:

• Payment of Stamp Duty: Stamp duty is a tax levied on the transfer of property. Ensure that you pay the required stamp duty and that it is recorded in the relevant government office.
• Registration of the Deed: Once the sale agreement is signed, the transfer of title should be registered with the State Land Registry. The buyer’s name will be entered into the records, and the property will be officially transferred to them.

The buyer should obtain a copy of the Deed of Assignment or Deed of Transfer and a Certificate of Occupancy (C of O) from the government, which reflects the transfer of ownership.

9. Check for Land Use Charges

Some states in Nigeria charge a Land Use Charge on property. It is essential for both buyers and sellers to ensure that all land use charges are cleared before the sale, or the responsibility of paying the charges is addressed in the agreement.

10. Ensure Government Approvals

If the property is meant for development, make sure you have the necessary building approvals from the relevant local government or urban planning authority. Without proper approval, development might be halted, or you could face fines.

11. Be Aware of Customary Land Laws (for Rural Areas)

If buying land in rural areas or from communities, understand the concept of customary land rights. In many parts of Nigeria, land ownership follows local customs. Ensure you’re dealing with the right family or community leaders and that the land is free from local disputes. Sometimes, you may need to obtain the consent of the local community before the sale can be finalized.

12. Title Insurance (Optional)

Although not commonly used in Nigeria, title insurance may provide an additional layer of protection. It ensures that if there are any issues with the title or ownership, the buyer will be compensated.

13. Avoid Quick, Unverified Transactions

Be wary of transactions that seem too good to be true or pressure you to act quickly. Always ensure you follow the correct legal process and don’t rush into deals without verifying all details.

14. Tax Compliance

Finally, ensure all taxes related to the property (including land use taxes, capital gains tax, etc.) are settled before transferring ownership. Unpaid taxes can lead to future claims against the property.

Conclusion

Buying or selling property in Nigeria is a complex process that requires vigilance, patience, and a clear understanding of the applicable laws and regulations. By following the outlined steps, engaging professional services, and conducting proper due diligence, you can ensure a safe and secure property transaction.

Avoiding fraudsters when buying or selling property in Nigeria is critical to ensuring a safe and successful transaction. Fraud in the Nigerian real estate market is prevalent, and fraudsters often prey on unsuspecting buyers or sellers. These fraudsters can be particularly dangerous because they may present seemingly legitimate documents or manipulate situations to gain trust. Below are steps to avoid falling victim to property fraud:

1. Verify the Seller’s Identity and Ownership

• Verify the Seller’s Details: Ensure that the person selling the property is indeed the rightful owner. Check their identification documents (National ID, Driver’s License, etc.) and verify them with the local authorities.
• Confirm Ownership of the Land: Ask the seller to provide the original Certificate of Occupancy (C of O), Deed of Assignment, or any other relevant documents that prove ownership. Don’t accept photocopies unless authenticated by your lawyer or notary public.
• Cross-Check Ownership with Land Registry: Always verify the details of the property at the state land registry. Fraudsters may present fake documents, and a land search at the State Land Registry will help confirm ownership.

2. Beware of Multiple Sales (Double-Selling)

• Confirm No Prior Sale: Fraudsters often sell the same property to multiple buyers. To avoid this, always confirm that the property hasn’t been sold to someone else by the same seller. This is especially critical if you’re buying land that hasn’t been developed or built upon.
• Check for Existing Buyers: If possible, speak to anyone who may have previously made an attempt to buy the same property. If there’s a history of disputes or cancelled deals, tread carefully.

3. Do Not Accept Unverifiable Documents

• Scrutinize Documents: Examine all documents carefully. Fraudsters may produce fake or altered documents, including Certificates of Occupancy (C of O), deeds, or contract of sale. Always cross-check them with the relevant authorities, such as the State Land Registry or the Ministry of Lands and Housing.
• Be Wary of Overly Simplified Documents: Incomplete or overly simple contracts or deeds are red flags. A well-drafted agreement will clearly outline the responsibilities and rights of both parties and will be signed by both parties and witnesses (preferably a lawyer).

4. Use a Reputable Real Estate Agent

• Work with Licensed Professionals: When buying or selling property, it’s best to engage a licensed real estate agent who is well-known and has a track record of trustworthiness. Be wary of agents who pressure you into decisions or push you toward deals that seem too good to be true.
• Check the Agent’s Credentials: Verify that the real estate agent is licensed by the Real Estate Developers Association of Nigeria (REDAN) or another recognized regulatory body. You can also ask for references from previous clients.

5. Avoid Deals with Too Much Pressure

• Take Your Time: Fraudsters often rush buyers into making quick decisions without giving them time to verify details. Legitimate property transactions take time, so avoid deals where the seller is rushing you to make a payment or close the deal immediately.
• Insist on Proper Documentation: Don’t let anyone pressure you into signing documents or making payments before you’ve had the opportunity to fully review everything with a legal expert.

6. Watch Out for Ghost Sellers

• Ensure the Seller Is Present and Accountable: Some fraudsters may attempt to sell land using fake identities or act as middlemen with no actual right to the property. If the seller cannot meet with you in person or provide clear proof of ownership, be suspicious.
• Beware of Power of Attorney Scams: Fraudsters sometimes use fake Power of Attorney documents to sell property on behalf of someone who isn’t actually the owner. Always verify the authenticity of any Power of Attorney and ensure that it was registered with the relevant authority.

7. Check for Land Title Discrepancies

• Verify Title Ownership: Fraudsters sometimes present forged Certificate of Occupancy (C of O) or other land titles. Perform a land search at the state land registry to verify that the title on the property corresponds with what the seller is claiming.
• Ensure the Title is Not Encumbered: Check that there are no mortgages, court judgments, or government claims on the property. These issues may arise if the property is subject to an unpaid loan or if the land has been seized by the government.

8. Avoid Transactions with Unclear or Unregistered Property

• Verify Registration: Ensure that the property you are purchasing is registered with the relevant land authority. Properties that are not registered with the local land registry may be at risk of fraudulent claims, and you could have problems with future transactions or ownership disputes.
• Do Not Buy Unapproved or Unauthorized Land: If the property is being sold by an individual or group who cannot provide verifiable documents from the land authorities or government bodies, this is a major red flag.

9. Use a Trustworthy Lawyer

• Hire a Competent Lawyer: A qualified real estate lawyer is essential for ensuring the authenticity of the transaction. They will help review the documents, ensure that the property title is free of encumbrances, and protect you from fraudulent activities.
• Verify the Lawyer’s Credentials: Ensure that the lawyer has a strong reputation and is licensed with the Nigerian Bar Association. Fraudsters sometimes pretend to be lawyers or ask for an unreasonably large upfront fee.

10. Watch for Common Fraud Schemes

Be on the lookout for common property fraud schemes in Nigeria:

• Selling Land That Doesn’t Exist: Fraudsters sometimes sell land that does not exist or is located in a non-existent or undeveloped area. Always conduct a physical inspection of the land and verify the location before proceeding.
• Fake Properties in High-Demand Areas: Some fraudsters target high-demand areas like Lagos, Abuja, or Port Harcourt, where prices may be inflated. They may sell a piece of property in a location with no proper development or future access to basic infrastructure.
• Fake NOCs (No Objection Certificates): Fraudsters sometimes present forged or fake No Objection Certificates from relevant authorities to indicate that the property is free from government claims. Always verify with the issuing body.

11. Do Not Pay in Cash

• Use Bank Transfers: Always pay through bank transfers or other traceable forms of payment rather than cash. Cash payments are difficult to trace and leave no paper trail, making it harder to track fraudulent transactions.
• Get Receipts: Always ask for an official receipt for every payment made, and make sure all payments are documented. A reputable seller or agent will have no problem providing you with detailed receipts.

12. Trust Your Instincts

• If Something Feels Off, Walk Away: If anything about the transaction seems suspicious, trust your instincts and back out. Don’t allow the excitement of buying a property or the pressure to close a deal make you overlook red flags.

Conclusion

Fraud in Nigerian real estate is a serious issue, but by following the proper legal steps and performing due diligence, you can protect yourself from fraudsters. Always involve legal professionals in your property transactions, verify every document, and take your time to conduct thorough checks. By being cautious and vigilant, you reduce the likelihood of falling victim to fraudulent property deals.