Editor's note: Saheed Akinola Esq, the NAIJ.com partner blogger, reveals six factors prospective buyers must consider before paying for a landed property to avoid being swindled by unscrupulous land sellers.
Saheed is a legal practitioner and consultant on farming/agricultural investments.
His expertise covers a wide area such as corporate practice, asset acquisition, property acquisition, sales and management, farm management and consultancy. He consults for individuals and corporate organization across Nigeria and abroad.
He could be contacted via email@example.com +2348032493960 or propertylinelawyers.wordpress.com
More details in NAIJ.com’s step-by-step guide for guest bloggers.
This article is propelled by daily complaints by prospective buyers that are swindled by unscrupulous land sellers.
People come to us all the time with a view to seeking our assistance in recouping their lost money in a dubious land transaction. The problem we encounter now and then is that majority of the people including the elites approach the professionals after they had lost their hard earned money to 419 sellers or when they have committed certain amount to the contract.
They want to avoid engaging experts so that they will reduce their cost but ironically they end up losing everything. We hereby encourage all the prospective buyers to read this before buying a landed property.
1. Pre contract enquiries
The first thing a buyer should do when he is interested in purchasing a landed property is to engage the seller/owner in discussion to elicit some facts which will assist him in carrying out search into the property
The following questions are some of the checklists of what to enquire about before a buyer commences his investigation:
* Who is the bonafide owner of the property?
* Who is selling the property?
* From whom did the seller acquire his title
* Why is he selling?
* What are the documents that the property has?
* Are all relevant taxes been paid?
* Is there any occupier on the property?
* Has the necessary consent been obtained?
* Have relevant land charges and rent been paid?
It is not advisable to buy land without verifying the owner, the land and the documents that the seller have on the property. What usually happen during this stage is that the owner or his agent will come up with the antics that there are other buyers who are interested in paying for the same property with a view to excite the buyer into paying without conducting the proper search.
Our advice is always that nobody should be over excited into paying before conducting his search no matter how long it takes and no matter how related the buyer might be to him.
It is the buyer that has something to lose not the seller or his agent. Buyers should be patient and not be in haste because a hasty climber has a sudden fall. The seller is not under any obligation to disclose all the facts in relation to the property thereof. The buyer should always remember the principle of 'caveat emptor'.
READ ALSO: Why do businesses fail in Nigeria?
The buyer must take his time to conduct search on the land to determine whether the property is encumbered or not; and to know how the buyer acquires /possesses the land and why he wants to sell it. Buyers should not rely on reasons given by the seller as to why he intends to sell; it is only an independent search and investigation that can show the true nature of the land and its owner.
Sometimes, a seller intends to sell and transfer liability to the buyer because there are two persons (especially family land) laying claim to the ownership of the land. The phobia that the seller’s original owner may lose out will prompt sellers into disposing of their land.
Sometimes, if there is pending litigation on the said land, the owner quickly sells it off to shift the burden to the unsuspecting buyer. Sometimes the owner may buy a bad and incurably defective land e.g a land on pipeline or sometime a land under acquisition.
Where the property is being offered for sale by any other person apart from the real owner, then buyer should ask for power of attorney which authorizes the person to sell.
If the land in question belongs to a family, all the principal members must consent to the sale or they execute a power of attorney signed by all their members authorizing their representative to transfer and execute deed of assignment on their behalf.
At this stage the buyer must not believe all what the seller told him hook, line and sinker because if there is /are defect (s) on the property the seller will never disclose it no matter how close the buyer might be to the seller.
2. The owner/seller
Before binding himself by a contract, one of the important things to be investigated by the buyer is the acclaimed owner of the property he is negotiating to enable him decide whether or not he should enter into the contract of sale.
This crucial search involves verifying from the government if the said property is under government acquisition or not and whether there is/ are pending litigation(s) or other issues that encumber the property.
Where and how to crosscheck the owner/seller of a landed property:
3. Land Registry of a state
The voyage of discovering the true owner of a property where the property has a Certificate of Occupancy could be carried out at the Land registry of a state within which the land is situated (lex situ).
Everyone who has right in a landed property has to register his interest with the government because by virtues of land use Act all land within a state is vested in the governor of that state.
Therefore, the purchaser upon search at the land registry will know whether the seller has the requisite power to sell the land and whether there are interests on the land that may be investigated, which serve as encumbrance on the property.
The property register contains comprehensive and detail information about the registered property and the proprietorship register contains the name, address and description of the registered owner of the property. It also contains cautions inhibition and restriction which encumber the property from being disposed of the property `by the owner.
Before a buyer pays for any land, he must approach the Land Registry to investigate the title of that property.
It is incumbent upon the buyer to do a due diligence on the property he or she intends to buy because it is better for the buyer to lose the biding than to lose his hard earned money. It is better for him to err in the side of caution than to leave the rest of his life in regret. We always advise prospective buyer to always keep their interest in check whenever the price of any property look too good to them.
5. Physical inspection of the property
The buyer or his solicitor should visit the location of the property with a view to inspecting it so as to discover any defect in the property; whether there is access road to the property, whether the property is fit for the purpose the buyer wants to use it for; whether anybody is occupying the property, whether the drainage and other services are in place et.c.
6. Result of investigation
At the conclusion of the investigation and before entering into formal contract the buyer must have considered and found answers to some of the following issue as the case may be.
a. The buyer must have been convinced, through his search and findings carried out on the relevant document and physical inspection of the property, that the seller has an unencumbered title and that there is no lien, right – of way, easement, covenants or other restriction or encroachment on the property. He must also be convinced that there is no building restriction by Local, State of Federal Government.
b. The buyer must have investigated all the parties in the documents given to him by the seller and must have been satisfied that there is no break in the chain of devolution of ownership.
c. The identity of the property must have been ascertained by the buyer. It must be ascertained that the property described in the parcel clause of the deed is the same as the one offered for sale or where the property is undeveloped the buyer must be convinced that the property matched the beacons on ground.
d. The buyer should be convinced that the relevant deeds are properly executed. If a company executes it, then the execution must comply with the Article of Association of the company. If it is executed under a power of Attorney, then the buyer must be sure through his investigation that the power is still valid and not revoked and that the donee acted within the purview of his authorities.
e. Where the property is under assent, the buyer must have cited the probate/ letter of administration.
f. In respect of the Certificate of Occupancy, the buyer must have been convinced that all application forms are completed and all relevant fees paid. A certificate of occupancy is granted upon term e.g. that the property shall be developed within a given period. Where the grantee of the Certificate of Occupancy is in default of any of the terms of grant, the Certificate may be revoked and this could lead to a great loss. For these prospective buyer must be sure that the grantee is not in breach of any term of the grant that could lead to revocation of the Certificate of Occupancy.
g. The buyer should be convinced that all ground rents and other land charges are paid up to date so as not to incur a huge debt liability.
h. The buyer must be sure that relevant documents are stamped and registered accordingly.
i. If the property is a developed one, the buyer should be sure that the seller produces the approved building plan and that all development control regulations are complied with.
The above should be critically considered and if the answers are in affirmative then the buyer can go ahead and enter into a formal Contract of Sale and perfect all necessary documents and take possession of the property.
The views expressed in this article are the author’s own and do not necessarily represent the editorial policy of NAIJ.com.
NAIJ.com welcomes writers, bloggers, photographers and all sorts of “noise makers” to become a part of our Bloggers network. If you are a seasoned writer or a complete newbie – apply and become Nigeria’s next star blogger.
Send us some info about your career, interests and expertise and why you’d like to contribute to the Blogger Network at firstname.lastname@example.org. Also, please send us the link to your blog and three examples of your work.
More details in NAIJ.com’s step-by-step guide for guest bloggers.