Land holds significant value in traditional Nigerian society and is primarily owned communally. As such, you often find yourself having to deal with a family or an entire community to purchase a property in Nigeria. Given the (legal) complexity attached to obtaining proper title to such property, I have curated 5 (five) key considerations to examine before buying communal or family-owned real estate in Nigeria.
What is Communal or Family-Owned Real Estate in Nigeria?
A communal or family-owned real estate in Nigeria refers to land that is vested in the past, existing and future members of a community or family bonded by common ancestry or pedigree. This category also includes domestics and outsiders who have been integrated into the community or family by the founder.
Due Diligence Investigation
The first key consideration is carrying out a thorough due diligence investigation to verify the ownership of the property by the community or the family you are dealing with, and to confirm if the property is free from government acquisition. Depending on the information or document provided by the representatives of the community or family, ownership verification can be done in different ways, including by visiting the relevant land registry or gazette office and making inquiries from residents/neighbours within the property location.
You have to engage a licensed surveyor to confirm if the property is free from government acquisition or under non-committed government acquisition.
Capacity to Sell
The second key consideration is determining who, among the members of a community or family, has the capacity to sell and validly transfer title in the community’s or family’s property to you. Not just any members can do so.
Generally, only the head and the principal members of a community or family can validly sell their communal land to you. In some cases, a community or family appoints and registers certain members of the community or family as their representatives for signing transfer documents to their communal land.
Proper Documentation
One thing you want to avoid is making full payment for communal real estate without having all the relevant and proper documents evidencing the transaction. Such mistake or ignorance can be very costly, especially when you must return to the community or family to rectify the mistake and you discover there is a change of communal head and/or principal members.
Proper documentation includes securing a family receipt; well-drafted and duly executed deeds (such as Deeds of Assignment or Deeds of Sublease); and a chartable survey plan by a licensed surveyor that clearly delineates the portion of the communal land you purchased.
It is important to emphasise the need to attach the survey plan to the deed, including incorporating details of the survey plan (that is, the size of the property bought and the survey plan number) in the content of the deed before the deed is signed by the head and principal members or by the duly appointed representatives of the community or family. This way, you can avoid future contention as to the portion or size of the communal land sold to you.
Perfection of Title to Communal Land
The only two categories of interests that you can acquire over land are legal and equitable interests. Legal interest is acquired following the perfection of your title to the land by obtaining the State Governor’s consent to the deed used in transferring the property to you; stamping; and registering the deed at the relevant land registry in Nigeria. On the other hand, you acquire equitable interest over a property where you have not perfected your title to the property but you have the relevant transfer documents in your possession, or you are processing the perfection of title to the deed at the relevant land registry.
The law requires you to acquire a legal interest in a property before you can validly transfer your title in that property to another person or entity. Also, conflicting interests can occur over the same land. In other words, different people may claim ownership of the same land. Generally, where there is a conflict between legal and equitable interest in a property, the legal interest supersedes.
Prioritise perfecting your title to communal land immediately after your purchase and collection of title documents to mitigate the risk of members of the family or community creating conflicting interests on the land and to increase your chance of victory in case of a dispute. Also, if there are outstanding documents you require from the community or family, you can easily proceed to obtain them from the community or family while the transaction is still recent.
Engage Professionals
This is the last key consideration. An experienced legal practitioner with solid practice in real estate law in Nigeria can relieve you of the burdens highlighted in the other four considerations, including properly managing your interest when purchasing communal land.
Buying communal or family-owned real estate in Nigeria demands diligence, patience, and a solid grasp of both legal and customary frameworks. By taking proactive steps and involving the right professionals, you can navigate potential pitfalls and secure your investment. Remember, the goal is not just to acquire property but to do so with peace of mind and legal certainty.
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