Facts To Understand Before Buying Property In Under – Developed Estate

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Facts To Understand Before Buying Property In Under-Developed Estate

The real estate purchase is one critical step every person who is gainfully employed is bound to make at one time or another in life. Apart from having a place to call home, real estate has become one of steady investment alternatives in Nigeria. Nowadays, it appears everyone seems to be interested in offer for sale of land or building in one developing area or another.

Meanwhile, for both two decades now, private property developers seem to have been the key or dominant players in the real estate, especially in mega cities like Lagos, Abuja, Ibadan and Port Harcourt. Everyone seems to prefer buying their future homes either in a new proposed estate or ongoing one. It is obviously not a bad idea, especially in Nigeria where governments are yet to provide necessary infrastructures such as portable water, electricity and most importantly roads in existing or old neighborhood. A lot of people assume or believe private developers are likely going to provide such amenities. Additionally, due to constant problem of ‘omo-onile’ (Yoruba words for indigenous owners of land), which is prevalent in South West, especially in Lagos, people are like going to prefer to buy their homes in a fully secured environment that is devoid of Omo Onile’s problem. Based on the stated reasons, there is now massive surge in patronage for private developers across the country, especially in Lagos State.

Having regards to the foregoing, there are important legal precautions everyone aspiring to buy a building or land from private developers should be aware of. These precautions are important not because most of private developers are untrustworthy, but because failure to undertake such precautions are usually at the buyer’s peril.

First, anyone purchasing a property from private developer should not just make payment blindly. It is better to engage the service of a lawyer to help trace and search the title of the property one intends to purchase. The fact that the property that is about to be purchased falls within a big estate does not confer a good title on such property. In this country, we have witnessed a situation where a large estate was pulled down in Abuja because of the alleged bad title. I have also heard of people who have purchased properties in some of the so-called big estate and are unable to perfect their title for more than a decade.

The second precaution that is key is for the buyer to seek to perfect his or her own title. Subject to the provisions of Land Use Act, Governor’s consent is required in every state except Federal Capital Territory that falls under the jurisdiction of the Minister of F.C.T. A buyer’s failure to perfect his or her title is as good as no lawful transfer of property has taken place in accordance to the records in the registry that state.

Section 1 of the Land Use Act stated that all land in each state are vested in the governor of such state to hold in trust and administered for the use and common benefit of all Nigerians. Where a buyer has neglected to perfect his or her own title, or the developer or assignor has also neglected to perfect his own title too, the governor of such state might still lay claim to such property for overriding public interest without any compensation to the affected owner.

The third but not the least precaution a buyer should take when buying a property from developer is to insist on contract of sale, especially when a developer is asking such buyer to pay premium on the land for some proposed infrastructures such as electricity, road network among others. Contract of sale is a preliminary agreement in a land transaction before a deed of assignment. In situation where the developer is offering a buyer 6 months or 2 years payment’s option, the buyer is at mercy of such developer if there is no contract that defines the rights and obligations of both parties. I have heard of different people who have cried out severally to complain that their developer arbitrarily increased the price of an agreed property, especially a bare land after they have made deposits for such property. Contract of sale will usually prevent gazumping i.e. owner or developer can not unilaterally increase the price of the property again as long as the purchaser is still keeping to his own side of bargain by making timely payment as agreed.

In addition, contract of sale can be used to incorporate every other term of the agreement a developer has represented to the purchaser. I have heard cases of people buying landed properties in deep forests at a premium price claiming a developer has promised to help them construct the road network on the land. Such verbal agreement or promise is often not binding, unless it is written somewhere, the purpose a contract of sale can easily serve.

Finally, I will suggest anyone seeking to buy a new home should not do so without a consultant, which is usually a legal practitioner who can properly ascertain the risks associated with such transaction or property in question. A lot of good developers out there have kept to their promises by delivering what they promised, but you can never predict what your own developer might be up to. But it suffices if as a buyer, you have done the right thing from the begining

Source: By Olusola Jegede is Partner at Resolution Law Firm
Email: ojegede@resolutionlawng.com

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