Acquisition of Land by Purchase

ACQUISITION OF LAND BY PURCHASE

 

Here in Nigeria the issue of sales of land is quite a complicated one, depending on who is selling and who is buying.

The process of sale of land has been visited by several restrictions which we in PAN consider as a clog in the wheels of progress of business in Nigeria. These include but not limited to:

1) The Land Use Act of 1978, section 22 which prescribes that consent of the Governor must be obtained before alienation of any right in any Land within a state of Nigeria

2) Section 46 LUA & the Acquisition of land by Aliens Laws  (A LAL) which is of the effort that a foreigner must seek and obtain consent before taking interest on any land in Nigeria.

3) The law that prescribes that foreigners can not acquire interest in land for more than 25 years.

4) The land tenure system in Nigeria, that any sale or alienation of family land without the consent of the head of the family is void. Ekpendu v Erika, Adelekan v Iyanda.

5) Some legislation in case of lands belonging to the authorities requiring the consent of the minister.

6) Town planning laws that restrict the purchase of Land in some areas of the state for some businesses.

There are several ways that a person and businesses can buy land in Nigeria, they include:

  1. Government property development agency
  2. Private property development companies
  3. Family land
  4. Private land
  5. Company/organizations land,

 

Any person who intend to purchase land from the above persons must comply with these procedures for an effective and problem free purchase.

We advice that the first thing to do is to engage a property lawyer who is well experienced in land transactions. The following procedure most be cleverly and carefully followed.

 

STAGES OF SALES OF LAND

There are two stages of sales of land, the contract stage and the conveyance stage. The contract stage include all the processes from the search and investigations till the point when a binding agreement is made between buyer and seller while the conveyance stage is when the real appropriate instrument of conveyance is executed under seal.

The essence of contract of sale is to enable the purchaser have enough time to investigate the title of the vendor. The contract normally include price of the property, mode of payment, nature of vendor’s title, duty to produce all documents of title by the seller, duty to disclose all information concerning the land etc. It is also not unusual that the vendor may demand a deposit of certain amount of money as part payment of the land pending the result of the investigation.

At this point of the exchange of contract, the vendor is deemed to hold the land in trust for the purchaser until payment is made and all the terms of the agreement is fulfilled.

There are benefits of the contract of sale for both the purchaser and the vendor.

The purchaser protects himself by having enough time to investigate the title. Any party that withdraws from the contract may incur liability. The contract defines terms clearly like mode of payments, time of payment etc. Also death of a party may not change the contract.

 

CONTRACT STAGE

  • The first thing to do after exchange of contract is to conduct a proper investigation of the land. A questionnaire should be sent to the seller of the land where he/she would give every information/documents that has been requested by the purchaser. These information should includes boundaries, any previous owners, any lease or mortgage or lien , names and addresses of head of family /family representatives in case of family land, particulars of directors/trustees incase of corporate owned land and any other questions considered necessary by the purchaser. The vendor should also provide every document available with him.

 

Note however that the seller will not be held liable for withholding any information so it shall be the duty of the buyer or his lawyer to investigate every claim including all the documents provided by the vendor of the land.

Example of the documents that a purchaser should expect from the vendor are:- Certificate  of Occupancy ( C of O) ,(Global C of O for estates land) Right of Occupancy (R of O), Deed of Assignment/Conveyance, registered survey plan, registered title, Vesting order, Family Survey, receipt of purchase, Excision documents, Gazette numbers, documents of allocation in the case of government allocated land, indeed all documents relating to the ownership of the land by the vendor depending on how the vendor acquired the land.

 

Note: In commencing the search for the confirmation and authentication of the documents provided by the vendor, the most important thing is to ensure that the survey plan you have in your hand is that of the land you are investigating. This is very important because experience has shown us in PAN that in some cases especially while dealing with family and individual land, the survey plan presented to you may not be for the land you are investigating so you are advised to take a surveyor to the land and physically ensure that the “ survey co-ordinates “ on the survey plan is for the very land in question. Secondly, you must ensure that the surveyor has registered the survey plan with the survey department .

 

The investigation of the title should take the vendor to the following places:-

  1. Search at the land registry in your state. You may commence the investigation by applying with the office of the Surveyor General for land information.
  2. Registration of title office of the state.
  3. Search at corporate affairs commission ( CAC ) for land belonging to corporate and registered organizations.
  4. Probate registry to see if the land has been granted to anyone else.
  5. Court registry to see if the land is subject to any litigation
  6. Traditional evidence – asking from families and communities to verify if necessary consents are obtained.
  7. Physical inspections
  8. Asking questions from people who are living or doing business where the land is situate. They may give you the current information on what has happened in the land.

 

CONVEYANCE STAGE

After the investigation and the purchaser is satisfied that the land belongs to the vendor, appropriate payments would be made and the deed of assignment would be prepared, most times by the purchaser’s lawyer, vetted by the vendor’s lawyer and executed by the parties & their witnesses.

The vendor will submit all the original documents to the land. Note: In compliance with section 22 of the Land Use Act, the vendor will at this stage apply and obtain governor’s consent. The law is that the vendor must obtain the Governor’s consent before selling but it does not work that way in practice, what we have seen always from experience is that the vendor takes his/her money and goes away while the purchaser is left to seek for the governor’s consent, Therefore we advice that the purchaser must ensure that the vendor signs the application for consent and ensure that the purchaser collects all the necessary documents required for the consent from the vendor. It is also the responsibility of the Vendor to pay for the consent fee.

Finally the Purchaser must ensure that he or she is put in possession of the land by the vendor.

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