Partnering With Lagos Property Developers: Legal Steps and Tips

Introduction

The Lagos property market has become a magnet for both local and diaspora investors. But while opportunities abound, the greatest determinant of success is the developer you partner with.

In recent years, many investors have suffered heavy financial losses by engaging unverified developers—some lacking titles, approvals, or even company registration. On the other hand, partnerships with credible developers have turned modest investments into multimillion-naira portfolios.

This article provides a complete legal and practical roadmap for partnering with Lagos property developers — covering verification, documentation, risk management, and negotiation strategies to protect your money and secure your investment.

1. Understanding Developer Partnerships

A developer partnership is an arrangement where an investor provides funding, land, or both, while the developer contributes technical expertise, project management, and construction capability.

These partnerships can take many forms:

• Equity-based: investor and developer share ownership and profit.
• Debt-based: investor lends capital to the developer for interest or fixed returns.
• Joint venture (JV): both parties form a new entity or agreement to co-develop property.

Whatever the structure, your protection lies in strong legal documentation and independent due diligence.

2. The Legal Framework in Lagos

Key Laws Governing Developer Partnerships

1. Land Use Act (Cap L5, LFN 2004) – Governs land ownership and Governor’s Consent.
2. Lagos State Physical Planning and Urban Development Law – Regulates building approvals and layouts.
3. Lagos State Real Estate Regulatory Authority (LASRERA) Law, 2020 – Mandates registration of real-estate developers and agents.
4. Companies and Allied Matters Act (CAMA 2020) – Applies where a joint company is formed.
5. Contract Law (Common Law Principles) – Enforces agreements and remedies.
6. Lagos State Properties Protection Law, 2016 – Criminalizes illegal property sales and land grabbing.

3. Why Legal Partnership Is Important

Partnering with a developer without legal clarity exposes you to:

• Misappropriation of funds.
• Uncompleted or abandoned projects.
• Double sale or defective title.
• Breach of profit-sharing agreements.
• Litigation and financial loss.

A written, professionally drafted Development or Joint Venture Agreement defines each party’s role and provides legal recourse when disputes arise.

4. Essential Legal Steps Before Partnering With a Developer

Step 1: Verify Developer’s Legitimacy

Confirm that the developer:

• Is registered with LASRERA (visit lasrera.lagosstate.gov.ng).
• Has a registered company with CAC (check RC number).
• Owns or has legal authorization to develop the land.
• Has a track record of completed and verifiable projects.

Step 2: Conduct Title Verification

Engage your lawyer to:

• Obtain the Certified True Copy (CTC) of the title document.
• Search at the Lagos Lands Registry for encumbrances or acquisition.
• Verify the survey plan with the Office of the Surveyor-General (OSGL).
• Confirm Governor’s Consent or C of O where applicable.

Step 3: Conduct Corporate Due Diligence

• Obtain developer’s CAC documents and shareholder structure.
• Review past financial performance and debt obligations.
• Confirm that the directors are not under legal restrictions.

Step 4: Assess Project Approvals

Request copies of:

• Approved building plan.
• Development permit from the Ministry of Physical Planning.
• Environmental Impact Assessment (EIA) (for large projects).

Step 5: Execute a Legally Binding Agreement

Your agreement should outline:

• Roles and responsibilities.
• Profit-sharing or repayment structure.
• Project duration and milestones.
• Default remedies.
• Exit mechanism.

5. Core Legal Documents in Developer Partnerships

1. Joint Venture (JV) Agreement / Development Agreement – Defines partnership structure and obligations.
2. Deed of Assignment or Sub-Lease – Transfers developer’s rights or land ownership as applicable.
3. Power of Attorney – Grants limited authority for transactions.
4. Escrow Agreement – Protects funds until milestones are achieved.
5. Contract of Sale (if developer is selling units).
6. Shareholders’ Agreement – For incorporated JVs.

Each must be properly executed, stamped, and registered with the appropriate authorities.

6. Key Clauses in a Developer Partnership Agreement

1. Parties and Contributions – What each side provides (land, finance, construction).
2. Project Scope – Description of property, number of units, quality standards.
3. Profit Sharing – Ratio and calculation method (gross vs. net).
4. Timeline and Milestones – Development schedule and delivery date.
5. Title and Documentation – Ownership confirmation, consent, and registration.
6. Funding and Payment Terms – Source, timing, and escrow arrangements.
7. Accountability and Audit Rights – Investor’s right to financial reports.
8. Default and Termination – Penalties for breach or delay.
9. Exit or Buy-Out Options – Exit strategies and valuation formula.
10. Dispute Resolution – Mediation, arbitration, or court jurisdiction.

7. Common Pitfalls and How to Avoid Them

8. Structuring the Partnership: Options and Legal Implications

a. Joint Venture (Contractual)

No new company formed; parties sign a JV Agreement.
Advantage: Flexibility and low cost.
Risk: Personal liability if one party defaults.

b. Incorporated JV (SPV)

A company is incorporated under CAMA with each party as shareholder.
Advantage: Limited liability, clearer governance, transferable shares.
Risk: Requires statutory compliance and corporate filings.

c. Loan or Profit-Sharing Model

Investor provides funds for agreed return; developer repays after completion.
Advantage: Predictable ROI.
Risk: Limited control over project management.

9. Regulatory and Compliance Considerations

Developers must comply with:

• LASRERA registration and reporting.
• Physical Planning approval from MPPUD.
• Building Control certification from LASBCA.
• Tax obligations under the Lagos Internal Revenue Service (LIRS).
• Anti-Money Laundering (AML) compliance for large transactions.

Ensure the partnership aligns with all statutory requirements to avoid sanctions or demolition.

10. Protecting Your Investment: Legal Safeguards

1. Use Escrow Accounts – Developer receives funds only upon achieving milestones.
2. Title Perfection – Perfect all deeds and obtain Governor’s Consent.
3. Performance Bonds – Developer provides security for project delivery.
4. Insurance Coverage – Against construction, fire, or accident risks.
5. Joint Signatories – For disbursement of project funds.
6. Project Monitoring Rights – Regular inspection and progress reports.

11. Red Flags in Developer Partnerships

• Developer lacks verifiable title or LASRERA registration.
• Pressure to make quick payments without documentation.
• Promises of unrealistic ROI (e.g., 200% in 6 months).
• Refusal to allow legal review of documents.
• Incomplete corporate details or unverifiable address.

Avoid any developer exhibiting these warning signs.

12. Role of Chaman Law Firm in Developer Partnerships

At Chaman Law Firm, we act as legal partners and protectors of investor interests, offering:

• Developer and project verification.
• Drafting and negotiation of JV and partnership agreements.
• Legal due diligence and regulatory checks.
• Representation in LASRERA or court disputes.
• Title perfection and documentation.

Our mission is to ensure every partnership is legally secure, transparent, and profitable.

13. How Chaman Properties Facilitates Developer Collaborations

Chaman Properties bridges investors with credible developers by:

• Vetting and onboarding registered developers.
• Managing communication and project supervision.
• Providing transparent ROI reports.
• Coordinating with Chaman Law Firm for legal protection.

This dual structure ensures both commercial success and legal compliance.

14. Dispute Resolution and Enforcement

Partnerships may fail if disputes arise over performance, profit, or control.
Always include clear dispute-resolution clauses:

1. Negotiation – internal dialogue within 7–14 days.
2. Mediation – through neutral third party.
3. Arbitration – enforceable under the Arbitration and Mediation Act 2023.
4. Litigation – at the High Court of Lagos State if necessary.

15. Tax and Financial Compliance

Partnerships must ensure compliance with:

• Stamp Duties Act – on executed agreements.
• Capital Gains Tax Act – on sale of property.
• Companies Income Tax Act – for corporate JVs.
• Land Use Charge Law – annual property tax.

Your lawyer should oversee tax registration and filing obligations to prevent future penalties.

16. Diaspora Investors: How to Partner Safely

For diaspora clients, distance should not mean risk.
We recommend:

• Engaging a local lawyer to act as trustee or attorney.
• Conducting virtual inspections and verification.
• Using escrow or verified company accounts.
• Executing notarized Power of Attorney where required.
• Regular legal reporting throughout the project.

Chaman Law Firm represents diaspora investors in all developer partnerships — from Lekki to Epe to Ikoyi.

17. Case Example: Protecting an Investor in a Developer Partnership

A diaspora investor committed $120,000 to a developer project in Ajah without legal oversight.
The developer defaulted, claiming “construction delays.”
Chaman Law Firm intervened, issued a Letter of Demand, and recovered funds through negotiated settlement.

Lesson: Legal supervision saves money, stress, and reputation.

18. Practical Checklist Before Partnering With Any Developer

1. Verify developer’s LASRERA registration.
2. Conduct title and corporate due diligence.
3.  Confirm project approvals.
4.  Sign detailed Development/JV Agreement.
5.  Register all documents.
6.  Use escrow structure for payments.
7.  Monitor project milestones legally.

19. Long-Term Investment Benefits of Legal Partnerships

When properly executed, a developer partnership offers:

• Access to premium projects without full land cost.
• Higher ROI through shared development.
• Legal protection of funds and ownership.
• Credibility with banks and investors.
• Sustainable wealth through real estate equity.

20. Conclusion

In Lagos real estate, the right developer partnership can multiply your investment, but the wrong one can erase it.
The difference lies in legal structure, documentation, and due diligence.

Before you sign any agreement or transfer any funds, ensure every clause is reviewed, documented, and registered by a competent property lawyer.

At Chaman Law Firm and Chaman Properties, we combine legal precision and real estate expertise to help investors and developers build partnerships that are transparent, enforceable, and profitable.

Call to Action

Are you planning to partner with a property developer in Lagos?
Let us help you verify, negotiate, and structure your partnership legally and profitably.

Contact Us

Chaman Law Firm
115, Obafemi Awolowo Way,Allen Junction, Beside Lagos Airport Hotel,  Ikeja, Lagos
📞 0806 555 3671, 08096888818,

📧 chamanlawfirm@gmail.com
🌐 www.chamanlawfirm.com