Land Transaction in Nigeria: Let The Buyer Beware!

Introduction

Land is an asset that almost everyone craves to own or deal in as investment business. The reason behind the cravings is not only that shelter is one of the basic needs of man but also the fact that land, unlike other forms of properties, is not a wasting asset – it is a special property that does not depreciate with time or use. Land appreciates in value regardless of the monetary value or deplorable state of whatever that is affixed to it, say, a building, etc., land continues to grow in value as days go by.

Albeit, as important as this type of asset is, so delicate is dealing or making transaction thereon could be. Land is an immovable form of property. Thus, it is not an asset that can be sold and purchased like any other properties that are movable or removable from the point of purchase. This is the reason why the best an owner or a titleholder (called the assignor) can do is to assign or transfer his/her interest in a piece of land to a prospective purchaser (assignee). With this peculiar nature in mind, a lot needs to be done, checked, and confirmed to ascertained true ownership, status, expanse, adverse interest, etc. in respect of a piece of land before concluding the transaction or making any payment for it. In this part of the world, a lot of conmen explore this peculiar nature to perpetrate fraud since prospective purchasers are often not patient, careful and generally acting miserly to let due diligence be conducted before concluding and making payment for landed properties. This article presents some crucial areas of concern that ought to be settled before drawing conclusion on land transaction. It must be noted however that what would be the major concern for due diligence on any land depends entirely on the circumstance of each case.

What is Land?

This question may sound unnecessary, but owing to this topic, it is very important to clarify it. According to Black’s Law Dictionary, 8^th Ed. (2004), land is defined as “An immoveable and indestructible three-dimensional area consisting of a portion of the earth’s surface, the space above and below the surface, and everything growing on or permanently affixed to it. An estate or interest in real property.”

It is apt to note that ‘land’, when it relates to its ownership or transaction thereon, it must be taken as a legal concept and be viewed in juristic perspective. From the above definition therefore, Land is neither restricted to the earth’s surface, but extends below and above the surface; Nor confined to the solid, but may encompass within its bound such as gasses (e.g. the air above it) and liquid (e.g. water below it). Thus, land is itself, anything on, below and above it. This perspective is further captured in a number of Latin expressions often used in law, namely: “Cuius est solum, eius est usque ad coelum et ad inferos” – meaning that “whoever’s is the land, it is theirs all the way to Heaven and all the way to Hell” (‘Hell’ here, means the internal part of the earth; Another Latin expression in common usage is “Quicquid plantatur solo, solo cedit” – meaning that “whatever is affixed to the land belongs to the land.” In other words, where you have structures such as buildings, economic trees, machinery or other appurtenances affixed to a piece of land, it is land altogether. Thus, to acquire an interest in land is to acquire whatever that is on it, below it, above it or affixed to it. The only exception as far as Nigeria is concerned is where your land is discovered to contain mineral resources in which case the Constitution gives the Federal Government power over it, subject however to fulfilment of certain obligations on the part of the government.

It is therefore a bit ludicrous to hear that various floors of a high-rising building, for instance, are being ‘sold’ to different occupants. Indeed, the highest title that each of those occupiers can hold is a lease of the unexpired residue of the years in the right of occupancy that the purported assignor was granted. None of those so-called buyers could indeed prove title to the floors allotted, except, ceteris paribus, the one on the ground floor.

Ways of Proving Title to Land: The Legal Perspectives

As noted above, ‘land’, being a legal concept, it takes legal perspectives and evaluation to ascertain title to it. Proof of title is very vital in land transactions. If you paid for a piece of land purportedly bought from a vendor who himself has no valid proof of title to it, you cannot hold any title or lay claim to the land either. Thus, whether the seller or a new purchaser, there must be valid proof of title to claim ownership. Nigerian courts have, in compendium of cases, established and restated five ways of proving title to land in Nigeria. Accordingly, any person claiming title to any piece of land can only prove it by any one or more among the following means:

1. By traditional history: By which the claimants of title may have to show by history that they or their primogenitors were the first settlers on the land so claimed or otherwise became the traditional owners by any other historical events.

2. By acts of ownership such as selling, leasing, renting out of the land or part of it or farming on it, or otherwise utilizing the land beneficially over a sufficient length of time, numerous and positive enough to warrant inference of ownership.

3. Production of documents of title duly authenticated: Documents in this regard includes authentic family receipt, registered deed (before 1978), Statutory Right, or Certificate of Occupancy, or consent (after 1978), Excision, Deed of Assignment or Conveyance, etc.

4. Acts of long possession and enjoyment over the land: Where a claimant shows act of actual possession and undisturbed enjoyment of a piece of land for a reasonably long period of time that only an owner could so do.

5. By acts of possession of connected or adjacent land in circumstances rendering it probable that the owner of such connected or adjacent land would, in addition, be the owner of the land in dispute.

[See generally, the case of Idundun v. Okumagba (1978) 9-10 SC 227; also, Ziregbe v. Eyekpimi (2020) 9 NWLR (Pt.1729) S.C 327].

 

What You Need to Ascertain Before Concluding on Any Land Transaction in Nigeria

As individual’s root of title differs, so also is the dimension of due diligence to be done on a particular land differs. The following are the salient areas of concern that should be ascertained before concluding land transaction in Nigeria:

  1. The Nature of the Title of the Vendor(s)

The Vendor is the ‘seller’ landowner usually called the assignor. He/She or they, as the case may be, is the titleholder who has beneficial interest in the land. It is very important to ascertain the nature of title the assignor has, whether it is traditional or statutory.

  2. The Root of Title of the Vendor(s)

Whatever may be the nature of the title is deducible from the root of title. A vendor who has traditional title would definitely have to trace his root of title to certain historical events leading to such title, while one with statutory title has to show official documents approving such.

  3. Validity of the Title Documents Due Diligence

Where the root of title is hinged on documents be it family receipt, deed of assignment, registered deed, certificate of occupancy or other statutory rights, judgment of a court, government allocation, excision, ascent, etc., due diligence is required to ascertain the validity of the document so presented. The nature of the document determines the authority/office to approach for due diligence. Where the document is purportedly registered however, the venue for the due diligence is the land registry of the state concerned. It must be noted that certificate of occupancy is not a conclusive proof of title to land. Any document presented as a proof of title to land must have been validly issued and traceable to the original root of title of the land in question.

  4. Land/Chart Information Due Diligence

Depending on the nature of the root of title, land information or chart information is another vital due diligence that may be crucial to a particular land transaction. Information obtained through any of these processes would inform the attorney on the best advice to give the prospective purchaser.

  5. Inchoate Transaction/Title of the Vendor(s)

Sometimes, a Vendor of a piece of land may have an incomplete transaction with the original owner therefore holding a presumably incomplete title which indeed is no title at all. Whereas, no one can give better title than himself has. Only a comprehensive due diligence can expose this status. A vendor may be in possession/occupation of a piece of land as a leasee/licensee with intention or agreement to take title upon fulfilment of certain conditions in the future. A vendor may be a beneficiary under a Will that no ascent has been granted or in a deceased’s estate that Letters of Administration has not been obtained, such vendor has no complete title, or more bluntly, no title yet.  What is even becoming more notorious these days is where a Vendor executes contract of sale with the original owner over a large expanse of land with agreement to pay by instalments and privilege to advertise the land to the public. It may also be in the agreement with the original owner that the Vendor processes a valid title or other documents during the subsistence of such agreement. Yet, no valid title can be passed by such Vendor to those who may want to subscribe to it until he holds the title himself. This type of arrangement generates a lot of issues between companies dealing in real estate businesses in Nigeria and their land subscribers. Thus, a need to make proper consultation with independent professional before signing up for such deals.

  6. Formal or Informal Encumbrances

Encumbrances are all forms of impediments, burdens, disturbances, obstacles, or troubles that can hinder peaceful enjoyment, quiet possession, and easy ascertainment of title to land. It may be formal or informal. Any formal or informal defect in the title of the vendor may constitute an encumbrance.  Due diligence is required to ensure that such does not exist before moving on with the transaction. Any existing third party’s interest by way of mortgage or pledge, whether formal or informal is an encumbrance.

  7. Adverse Third Party Interest or Trespass

A piece of land may be a subject of mortgage or pledge; It may be a family land that only a few accredited principal members have the power and authority to transact over; It may be a part of a deceased’s estate over which the vendor’s interest is yet to be ascertained; It may fall completely outside the portion actually owned by the vendor which amounts to trespass and so on, paying for such land without clarifying any adverse interest of a third party is undoubtedly a purchase of litigation.

  8. Pending Litigation

The nature of the title of the vendor or his root of title may raise suspicion of probable pending litigation over the land. Where there is any red flag on this note, due diligence must be conducted to clear any doubt as to pending litigation. A root of title that demonstrates the existence of a judgment approving vendor’s title may require further search to ascertain if there is an appeal or pending suit over such judgment.

  9. Government Committed Land

With the coming into effect of the Land Use Act in 1978, all land within the territory of each State of the Federation (except land vested in the Federal Government or its agencies) is solely vested in the Governor of the State. Therefore, the Governor of a State may commit certain expanse of land within the State to a future project. When this is done, such land is described as committed land. Such land may exist bear and virgin years after years, and the native inhabitants may even be selling it without this knowledge. Whatever amount paid to the natives over land that is committed is a complete irredeemable loss. A purchaser who cares to engage a professional to undertake due diligence would be exposed to this reality before throwing away his money.

  10. Omo-Onile Interest and Claims

A very common and dreadful headache that purchasers suffer from on land transactions in this part of the world is one caused by the activities of the conmen called the ‘Omo-Onile’ in the western part of Nigeria. Omo-Onile is a Yoruba compound word meaning ‘the children of the landowner’. In the eastern part of the country, they are called ‘Ndi Ozo-ala’. They are indeed very hard to define and difficult to comprehensively describe. They can be formal/ refined or informal/belligerent in their approaches. They may be land grabbers or meddlesome interlopers who would want to retrieve a piece of land already paid for from the Purchaser with claims that the earlier vendor (probably their fellow or co-conspirator, now at large) had no title to the land or had no authority to sell, etc.  Moreso, where possession or title is not disputed, the Omo-onile may come over and over again at each stage of development on the land demanding diverse payments. Their activities are innumerable depending on the area/locality. This type of interest/claim, though a bit tough to ascertain at the onset in an area of no familiarity, yet those who are experts in land transactions know where to get reasonable information on the interests and claims of Omo-Onile within a particular area.

Conclusion

It is clear from the foregoing that when transaction in land is concluded without necessary due diligence, the purported assignee/purchaser might not have been assigned any interest at all; Or, he might get interest he cannot perfect for himself; Or, he got one that he needs to spend and be spent to get his mind settled over whatever nature of interest was transferred; Or, he might have merely signed in to a lifetime litigation; Or, maybe,  has even thrown good sum of money into the hands of crooks; Or, any other events for that matter. Thus, in order that you will not have to spoil the ship for a ha’p’orth of tar, it is very vital to consult with an estate attorney for the requisite and comprehensive due diligence over a piece of land before concluding transaction thereon or making hasty money transfer. Caveat emptor!

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