Introduction
Selling property in Nigeria can be a highly profitable venture, but it also comes with legal complexities that can lead to costly mistakes if not handled properly. Whether you’re selling residential or commercial property, the process involves several legal requirements, and overlooking any of these can result in disputes, financial losses, or even the invalidation of the sale. This guide will highlight the top legal mistakes property sellers commonly make and provide practical tips on how to avoid them.
Why Legal Guidance is Crucial When Selling Property in Nigeria
Property sales in Nigeria involve more than just handing over keys. They require navigating a complex legal framework, including contract drafting, title verification, tax obligations, and ensuring compliance with local laws. Failing to address these issues can lead to severe legal consequences, such as litigation or loss of property rights. Engaging a qualified property lawyer ensures that the sale process is smooth, lawful, and protected.
Top Legal Mistakes to Avoid When Selling Property in Nigeria
1. Failing to Verify the Property Title
One of the most critical mistakes a seller can make is selling a property without first verifying the title. If the title is unclear, or if the property is under dispute, the buyer could challenge the sale, or the transaction could be voided.
How to Avoid It:
Before putting your property up for sale, ensure that the title is verified at the Land Registry. If the property is not under your name or has an ambiguous title, work with a lawyer to clear up any title discrepancies. If the property has a Certificate of Occupancy (C of O), ensure that it is updated and in your name. The Land Use Act of 1978 governs land ownership in Nigeria, and a valid title is crucial for a legal sale.
2. Ignoring Government Acquisition or Land Use Restrictions
Many sellers overlook checking whether their property is affected by government acquisition or land use restrictions. Properties located in certain areas may be designated for public use or under government control, which can prevent the sale from being legally valid.
How to Avoid It:
Before finalizing any property sale, confirm with the Lagos State Land Bureau or other relevant authorities whether the land is free from government acquisition. A surveyor can help confirm that the property boundaries are not subject to restriction or acquisition. Additionally, always check for Excision Orders or Governor’s Consent for land transactions.
Case Law Example:
In Akinloye v. Ogundana (2000), a buyer lost their property after discovering that the land was under government acquisition. This case underscores the importance of verifying land status before selling.
3. Not Registering the Sale Agreement
A common error sellers make is failing to formally register the sale agreement. In Nigeria, a Deed of Assignment, which transfers ownership from the seller to the buyer, must be registered at the Land Registry to be legally binding.
How to Avoid It:
Once you have an agreement with the buyer, ensure the sale agreement or Deed of Assignment is properly registered with the Land Registry. Registration provides legal proof of the sale and protects both parties in case of disputes.
Statutory Authority:
Section 22 of the Land Use Act mandates that all transfers of property rights must be done with the Governor’s Consent, and the relevant documents must be registered with the Land Registry.
4. Failing to Disclose Existing Encumbrances or Liabilities
Some sellers may fail to disclose existing encumbrances (e.g., mortgages, liens, or legal disputes) that affect the property. This omission can lead to serious legal consequences and cause the buyer to annul the sale or sue for damages.
How to Avoid It:
Always disclose any encumbrances on the property before selling it. Conduct a thorough check at the Land Registry to identify whether the property is mortgaged or has any legal judgments against it. Clear any outstanding debts or legal issues before proceeding with the sale.
Case Law Example:
In Akanmu v. Olusanya (2010), the court ruled that the failure of the seller to disclose an existing mortgage on the property resulted in financial and legal complications, which the buyer could not resolve.
5. Overlooking Tax Obligations and Land Use Charges
Sellers often overlook their tax obligations when selling property. These can include capital gains tax, transfer tax, and unpaid land use charges. Failing to settle these taxes can result in legal disputes or delay the sale process.
How to Avoid It:
Before proceeding with a sale, ensure all taxes, including Capital Gains Tax and Land Use Charges, are paid. Consult with a tax professional to determine the appropriate taxes owed based on the sale price. Additionally, check that the property has no outstanding land charges or obligations with local authorities.
Statutory Authority:
The Capital Gains Tax Act governs tax obligations related to the sale of property, while Land Use Charges are regulated by state governments.
6. Not Seeking Professional Legal Advice
Many sellers attempt to handle the sale process themselves without engaging a professional lawyer. This can result in incomplete documentation, poorly drafted contracts, or mistakes in legal processes.
How to Avoid It:
Always hire a property lawyer to draft and review your sale agreements. A lawyer will ensure that your rights are protected, the sale terms are fair, and all legal requirements are met. They can also handle the registration of documents and provide advice on any potential legal issues that may arise during the transaction.
Conclusion: Safeguard Your Property Sale with Legal Due Diligence
Selling property can be a rewarding experience, but it requires careful attention to legal detail. By avoiding common mistakes such as failing to verify the title, neglecting government acquisition checks, or failing to disclose encumbrances, you can ensure a smooth and legally sound transaction. Always consult with a property lawyer to protect your interests and avoid unnecessary legal complications.
Selling property in Nigeria requires careful attention to legal details. Protect yourself from costly mistakes by working with an experienced property lawyer.
At Chaman Law Firm, we specialize in real estate transactions and offer comprehensive legal services to help sellers navigate the sale process smoothly and avoid common pitfalls.
Contact Us Today: For expert legal guidance on selling property in Nigeria.
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 us help you complete your property sale legally and successfully.
Featured Snippet:
To avoid common legal mistakes when selling property in Nigeria, verify the title, disclose encumbrances, settle taxes, and consult a property lawyer. These steps will help ensure a smooth and legally compliant sale process.