Introduction
Investing in real estate is one of the most significant financial decisions you can make, especially in a dynamic market like Nigeria. However, many property buyers fall into common legal pitfalls that can lead to serious financial losses and legal disputes. This comprehensive guide will highlight the top 10 legal mistakes property buyers make in Nigeria and provide actionable solutions to help you avoid them. Whether you are a first-time buyer or an experienced investor, understanding these pitfalls can save you time, money, and stress.
1. Failure to Conduct Proper Due Diligence
One of the most common mistakes buyers make is failing to conduct thorough due diligence before purchasing property. This involves verifying the property’s legal status, title, ownership, and any encumbrances. Skipping this critical step can lead to buying land that is under dispute, subject to government acquisition, or already sold to multiple parties.
Solution: Engage a qualified property lawyer to conduct a comprehensive title search at the Land Registry. Verify the ownership documents and ensure the property is free from any legal encumbrances.
Case Law Example: In Oluwole v. Onanuga (1998), the buyer failed to conduct due diligence and ended up losing the property because it was under government acquisition.
2. Not Engaging a Property Lawyer Early in the Process
Many buyers try to save costs by not hiring a property lawyer, relying instead on the seller’s agent or other non-professionals. This is a critical error, as property transactions involve complex legal processes that require expert handling.
Solution: Always engage a property lawyer from the start of the transaction. A lawyer will help you navigate the legal requirements, draft contracts, and ensure that your interests are protected.
Tip: The cost of hiring a lawyer is far less than the potential loss from a bad property deal.
3. Ignoring the Importance of Title Verification
Title verification is essential to confirm the seller’s ownership of the property. Many buyers take the seller’s word at face value without verifying the title, which can lead to buying disputed or encumbered property.
Solution: Request the original title documents from the seller and have your lawyer verify them at the Land Registry. Check for valid titles like Certificate of Occupancy (C of O), Deed of Assignment, or Governor’s Consent.
Statutory Authority: According to Section 22 of the Land Use Act, any transfer of interest in land without Governor’s Consent is considered void.
4. Failure to Obtain Governor’s Consent
In Nigeria, any transaction involving a previously granted right of occupancy must have the approval of the Governor. Many buyers are unaware of this requirement and proceed with transactions without obtaining Governor’s Consent, rendering the transaction legally voidable.
Solution: Ensure that Governor’s Consent is obtained before completing the transaction. This consent validates the transfer of ownership and protects your legal rights as the buyer.
Case Law Example: In Savannah Bank v. Ajilo (1989), the Supreme Court held that the absence of Governor’s Consent made the transaction null and void.
5. Overlooking Survey Plan Verification
A survey plan outlines the boundaries and exact location of the property. Many buyers neglect to verify the survey plan, which can result in boundary disputes or buying land in a restricted or unsuitable area.
Solution: Verify the survey plan with the Surveyor-General’s office to ensure the land is free from encroachments or government acquisition. A registered survey plan provides legal proof of the land’s location and boundaries.
Tip: Ensure the survey plan is registered and matches the physical layout of the land.
6. Not Checking for Encumbrances on the Property
An encumbrance is any legal claim or restriction on the property, such as a mortgage, lien, or pending court case. Buyers often overlook this critical aspect and end up purchasing property with legal complications.
Solution: Conduct a search at the Land Registry and check for any encumbrances. This will reveal if there are any existing legal claims or restrictions on the property.
Tip: Avoid properties with unresolved encumbrances, as they can lead to prolonged legal battles.
7. Skipping a Physical Inspection of the Property
Many buyers rely solely on documents and the seller’s representations without visiting the property. This is a significant risk, as the actual condition or location of the property may differ from what was described.
Solution: Always conduct a physical inspection of the property. This allows you to confirm the condition, location, and any potential issues, such as flooding or encroachments.
Tip: Bring a licensed surveyor along during the inspection to verify boundaries and check for physical encroachments.
8. Failure to Register the Property Title at the Land Registry
After purchasing property, some buyers neglect to register the title at the Land Registry. This omission can lead to legal issues, as unregistered property is not recognized by law and can be easily contested.
Solution: Ensure that the Deed of Assignment is stamped and registered at the Land Registry. This step provides legal recognition of your ownership and protects you from future disputes.
Statutory Authority: Under the Land Instruments Registration Law, all title documents must be registered to be admissible in court as evidence of ownership.
9. Relying Solely on Verbal Agreements
Verbal agreements in property transactions are legally unenforceable and can lead to misunderstandings or disputes. Many buyers trust the seller’s verbal promises without insisting on written contracts.
Solution: Always insist on a written Sales Agreement or Deed of Assignment that clearly outlines the terms and conditions of the transaction. Ensure the document is signed by both parties and witnessed.
Tip: Have your lawyer review all contracts before signing to ensure that your interests are adequately protected.
10. Not Factoring in Additional Costs and Taxes
Many property buyers underestimate the additional costs associated with purchasing property, such as legal fees, survey fees, taxes, and registration fees. This can lead to unexpected financial strain.
Solution: Create a budget that includes all potential costs and fees, including legal fees, title verification costs, consent fees, stamp duties, and taxes like Capital Gains Tax. Your lawyer can help you estimate these costs accurately.
Tip: Be prepared for incidental costs, and avoid rushing the transaction to ensure all fees are accounted for.
Protect Your Investment with Professional Legal Advice Avoiding these common legal mistakes can save you time, money, and stress when buying property in Nigeria. The best way to protect your investment is by engaging a qualified property lawyer who will guide you through the process, conduct due diligence, verify the title, and handle all legal documentation. At Chaman Law Firm, we specialize in property law and offer comprehensive legal services to help you make informed decisions and secure your investment.
Featured Snippet
Avoid these common legal mistakes when buying property in Nigeria: conduct due diligence, verify the title, obtain Governor’s Consent, check for encumbrances, and engage a qualified property lawyer. Following these steps can protect your investment and ensure a smooth transaction
Conclusion
Avoid Legal Pitfalls When Buying Property in Nigeria
Buying property in Nigeria is a significant investment that requires careful planning and due diligence. By understanding these common legal mistakes and taking proactive steps to avoid them, you can make informed decisions and protect your investment. Remember, hiring a professional property lawyer is not just a cost but a valuable safeguard that can save you from costly legal disputes.
Contact Us
For expert legal advice and assistance in your property transactions, Call us at 08065553671 or email us at info@chamanlawfirm.com to schedule a consultation.
Our offices are conveniently located in Lagos, FCT Abuja, Ogun State, and the UK. We are readily available to assist you with your legal needs.
Let our experienced team ensure that your property purchase is safe and legally sound.