Whether as an investment, for commercial or residential purposes, property acquisition in Lagos state is on the rise and has been ranked as one of the best investment decisions.
One reason most people are interested in property acquisition in Lagos State is that property appreciates in value over time, especially in an urban area like Lekki where there are a lot of commercial activities.
Lagos state is the Commercial capital of Nigeria and the 8th fastest growing city in Africa. According to the world population review, Lagos state has grown from just 1.4 million inhabitants in 1970 to over 22 million as of today.
Lagos state has a population density of about 5000 persons per Square kilometer making it one of the most densely populated cities in Africa. It has been estimated that about 86 persons migrate to Lagos every hour, that is more than 2000 persons every day and close to a million persons every year. The bigger the population, the more business activities, and growth.
Reliable reports have it that property prices in some areas in Lagos witnessed over a 40% increase between late 2020 and mid-2021. The appreciation is expected to remain bullish barring any unforeseen circumstances and acts of God.
Although property acquisition in Lagos state has potential for growth, it is risky to venture into it without proper legal and professional advice. There have been reports of people falling victim to fraud and sharp practices which usually culminate in the loss of funds. Such setbacks happen either as a result of the purchaser’s impatience, negligence, greed, lack of due diligence, or failure to acquire the basic knowledge required of a property investor.
Before closing a property acquisition in Lagos state, there are certain factors you need to consider. There are also key steps you must take to avoid falling victim to fraudsters who pose as property agents. Further down in this article, we would discuss the steps you must take before you acquire a property in Lagos State.
Property Acquisition In Lagos State; The Factors You Should First Consider
Budget
Before you make a decision towards property acquisition in Lagos state, the first step is to check your ‘pocket’. This means you have to evaluate your finances. Know your worth! you can do this by making a list of your assets and liabilities, assessing your income, and knowing how much you can do away with for a period of time that won’t affect you way too much financially. know how much you have, what you can go beyond, and above all, this will help you choose a perfect property type and area that suits your budget.
The problem with many potential buyers is, that everyone wants a highly valued property at a low price. Mind you, there is nothing wrong with wanting a very good deal, a deal that appears too good to be true may have an unseen danger lurking behind the shadows.
When you set a budget, you can easily determine if your approach would be a one-off payment or payment by installment. There are many properties that are sold with flexible payment plans. Some vendors offer as many as five years payment plans.
Suitability of property for use
Another factor you need to consider before acquiring a property in Lagos state is its suitability for use. You first have to determine the purpose for which you want to acquire the property.
It could either be that you want to have the property for rental income or for personal use. Whatever the case, you ought to look out for a property that suits your needs. Most residential properties in the Lekki area are placed within tightly secured estates. Also, if you are looking at acquiring for commercial use, a property that is close to the road or by the roadside will be very good for visibility and ease of business.
Kindly note that if your plan is to acquire a property for investment purposes, it’s always advisable to buy at the best price. For instance, buying an off-plan property (a property that has not been developed yet).
Location of property
The location of properties in Lagos state often determines the price. Lagos is largely divided into two areas; the Mainland and The Island. Some popular areas on the mainland are; Ikeja, Yaba, Surulere, Apapa, Ogba, Magodo, Iyanapaja, Oshodi, Agege, while some popular areas on the Island are; Lagos Island, Lekki, Ikate, Ikoyi, Victoria Island, Chevron, Ajah, and others. Each location offers a different price for similar properties.
Environmental factors
You must ask questions about the type of environment surrounding the property you are looking to acquire. Find out if the land is dry or swampy. Is it a congested area? is it a rough area? Is it secured? Is it in an estate? What are the estate rules? What are the types of people that live within the neighborhood? What is the power situation like? What are the taxes and charges to be paid? Is the area prone to flood? What is the nature of the soil? What are the physical boundaries? What is the water quality like? What is the Proximity to the road, what is the traffic situation like? Is there a drainage system in place?
Title documents of the property
Every property either has a title or it doesn’t. It is of the utmost advantage to you that you get a property with a valid title. Where you cannot verify the title of a property, it is best to stay away from that property. You might come across a property with no title but have been assured that the title documents are being processed. Buying such a property might expose you to certain risks. For instance, if the title is not granted, you might have to call for a refund.
One important thing to know is you can not know or verify a property title by yourself. It is necessary to hire a lawyer to do this for you. A lawyer knows what to do and how to help you out!
Some of the common titles documents applicable in Lagos State are ;
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Certificate of occupancy (C of O)
This is a document issued by the government to the lessee of the land, to own and use the land for a period of 99 years. Only one C of O can be given on a parcel of land. This means that if an owner with a C of O decides to sell his property, another C of O cannot be assigned on that same land. The buyer would need another document that proves he is the owner of the land usually through a registered deed.
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Registered Deed
This is a document transferring title from the owner of the property to a purchaser. The document could either be a Deed of Assignment or a Deed of Sublease. This document is required to be stamped and registered. Also, there is the requirement of the consent of the Governor which must be evidenced on the document.
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Excision and Gazettes
This is a title given to lands in communities that have been released from previous acquisitions from the Government
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Grant of Probate and Letters of Administration
These are documents given to the executors or trustees of a deceased person to manage the affairs of the deceased. Letters of administration are applicable where the deceased died without a will. Whereas probate is granted where the deceased died leaving behind a will. The letters of administration or grant of probate give authority to the executors to sell the properties of the deceased person.
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Court judgment
The judgment of a court can also serve as a valid proof of title. This is because the court has the power to decide who owns a property when there is a dispute over the ownership.
It is however very important that before you rely on the judgment of a court, please ensure that the case has been concluded and that there is no pending appeal.
Some other factors to be considered before property acquisition in Lagos state are; the cost of maintaining the property, necessary charges, and fees, credibility of your agent, and verification of the seller’s identity.
Laws That Regulate Property Acquisition In Lagos State
- Land Use Act of 1978
- Administration of Estate Law of Lagos State 2015
- Land Registration Law of Lagos State 2015
- Stamp Duties Law of Lagos State 2015
Steps You Should Take If You Are Considering Property Acquisition In Lagos State
a Hire a professional
You need professionals to help you in your property acquisition journey. A property lawyer, an estate surveyor, and a land surveyor are just a few of the professionals you may need to work with.
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A property Lawyer
It is important to hire a lawyer who is vast in the area of property law of Lagos state. The lawyer will give necessary legal advice and guide you each step of the way. Classic Attorneys is a real estate law firm with experience in handling property transactions. Real estate transactions are often seen by people as mere transactions of buying and selling. It should be noted that there is more to it. There are certain laws and rules that guide this transaction. The complexity of real estate laws in Nigeria could be confusing to someone without an in-depth knowledge of these laws. Having a property lawyer to guide you through the transaction will not only help you avoid mistakes but will help protect your interest in general.
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An Estate Surveyor and Valuer
An estate surveyor and valuer is a professional equipped with sound knowledge of the market in the area within which he operates. Estate surveyors and valuers provide two functions. They act as agents and also give valuable information with respect to the market value of the property. Estate surveyors and valuers can provide professional guidance when it comes to the choice and price.
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A Land surveyor
A land surveyor is adept in land boundary matters. Engaging a land surveyor is quite crucial when buying undeveloped land. He or she can help you determine the boundaries of your property, restrictions, and easements. He or she can also pick the coordinates of the property and apply for charting to ensure that the land is not acquired or committed.
Conduct physical inspection
If you can, it is always advisable to visit a property you intend to buy before the acquisition in Lagos state to see for yourself and verify if all you have been told about the property is true or false. If you are a Nigerian in Diaspora looking to acquire a property in Lagos, you may appoint a representative through a power of attorney to conduct the purchase on your behalf. Your appointed representative can conduct a physical inspection on your behalf and make a video call so you can also have a look at the property in real-time.
Conduct Due diligence
This is the most important and necessary step that must be taken before you put a close to your property acquisition in Lagos state. Your due diligence efforts should be spearheaded by a lawyer. Due diligence usually takes a lawyer to;
- the Lagos state land registry;
- the probate registry;
- Corporate Affairs Commission(CAC);
- The Court;
- The Surveyor General’s office;
- Community leader’s office;
- The previous owner’s office;
Closure
When the due diligence has been concluded and the property title has been verified, the next step is actually to close the transaction. During the closure, it is necessary that the title is transferred from the vendor to the purchaser. Transfer of title is the process of giving to the buyer the ownership rights over the property. The transfer is done through an instrument called the deed of assignment, deed of lease or sublease duly executed by both the vendor and the purchaser in the presence of their witnesses.
Documents needed at closure;
- Land purchase receipt
- Contract of sale of land
- Survey plan
- Certificate of occupancy/registered deed
- Deed of mortgage (where it is a mortgaged property)
- Deed of gift(where it is a gifted property)
- Probate(where the property is inherited with a will)
- Assent
- Letter of Administration( where it is an inherited without a will)
- Judgment of court.
Perfect Your Title
Section 22 of the land use Act, makes it unlawful to transfer interest in land without the consent of the Governor in which the land is located.
The first step to be taken towards perfection of the title is to apply for the Governor’s consent.
The following documents are needed to apply for the Governor’s consent;
- Completed form 1c
- CTC of title document
- Original copy of the deed of assignment.
- Evidence of payment of Charting and Endorsement Fee.
- Site Location of the Property
- Photocopy of identification card
- Passport Photographs
- Application Letter
- Photograph of location
After the consent has been obtained, registration at the land registry must be done. The land registration law of Lagos state mandates the holder of any registrable instrument to register the same within 60 days of obtaining the Governor’s consent. Transfer of title is only completed upon registration.
Conclusion
Property acquisition in Lagos state, as simple as it sounds, must be done with extreme caution and diligence, and a lawyer’s place in this type of transaction cannot be overlooked.
