LEGAL REQUIREMENTS FOR REAL ESTATE INVESTMENT(2)
In the first part of this article, I mentioned that the provision of the law cannot be avoided in land transactions. In the real estate sector, there are legal steps to take before the purchase of a property. These steps are:
- INDICATING AN INTEREST
- LOCATING THE LAND
- INSPECTION
- REQUISITIONS
- SEARCHES
- OFFER & ACCEPTANCE
- DOCUMENTS FOR VERIFICATION
- DRAFTING OF THE DEED
- PAYMENT
- POSSESSION
- PERFECTION OF TITLE
I will explain these points above for better understanding.
INDICATING AN INTEREST:
In making property investments, the first step is indicating an interest in a land which entails approaching real estate agents who are expert in the field. Investing in real estate goes beyond the day to day buying and selling of land, hence it therefore follows that consulting an expert in this regard will save cost and time.
LOCATING THE LAND:
Depending on the purpose of investment, the siting of the land is vital. The intent of investment should determine where the location of the proposed land is, so as not to defeat the purpose of investment.
INSPECTION:
We have circumstances where investors buy land through their relatives without knowing where the land is located. This is not expected of a good investor. It should be noted that a land can be in your desired location, but might not be suitable for the purpose of investment. In this regard, an investor must carry out what we call “INSPECTION”. An inspection is as the name implies.
REQUISITIONS:
Asking questions and demanding a verifiable answer with regards to a property are very necessary. The questions asked and answers given must conform with documentary evidence. Requisitions however ranges from asking questions from the agents, the community members, the neighbors and the government as well.
SEARCHES:
Many people think searches are conducted in ministry of lands alone, there are other places searches can be conducted which also depends on the location and the title documents. Depending on the interest you have, and on the title documents, you should know where to conduct the appropriate search. You can conduct a search in Ministry of Lands, Deed Registry, National Inland Waterway Development Authority, Surveyor General office, New Town Development Authority and a host of others.
OFFER & ACCEPTANCE:
After all the above have been done, one can then think of making an offer, counter offer as well as acceptance. In this circumstance, the offer and acceptance will determine what documents to be drafted by a lawyer. This ranges from a contract of sale, memorandum of understanding, a deed e.t.c
DOCUMENTS FOR VERIFICATION:
There are documents required for land verification when buying a land anywhere in Nigeria. These document ensure that a good and perfect title is passed after a land has been acquired. These documents will be listed and explained below.
- Approved survey plan
- Power of Attorney
- Deed of Assignment
- Certificate of Occupancy ( C of O)
DRAFTING OF THE DEED:
Drafting of a deed by a lawyer is to create an agreement between the vendor and the purchaser. This agreement otherwise called a deed will be presented before the Governor for consent. A deed is usually prepared by a lawyer with his seal affixed on it.
A Deed must consist of the names and descriptions of the parties, proper and adequate description of the property, the agreed purchase price, the acknowledgement of receipt of that amount, the capacity in which the Vendor is selling(either as an agent, a trustee, or the owner), a warranty that he has a right to sell in that capacity, condition that the contract shall be conditional on the obtaining of any requisite consents to the transaction, and Commissioner of Oaths or Governors Consent to sign and validate the agreement. etc
PAYMENT:
Simply put, after the deed has been drafted, it is expected that payment must come from the Purchaser which must be acknowledged by a Vendor. It should be noted however that in property law, cash cannot pass through except bank transfer or a payment order through cheque. In this circumstance, a receipt must also be issued thereto.
POSSESSION:
After payment has passed from the parties to a land, possession must also be given without any condition whatsoever. In this regard, additional payment not agreed should be shunned and should not be condoned.
PERFECTION OF TITLE: Perfection of title in law requires three (3) key stages.
- STAMPING- All title documents must be stamp dutied at the FIRS or the LIRS depending on the parties to the transaction. (Stamp Duties Act)
- REGISTRATION- This refers to the stages involved in the Deed of Registry. All title document must have a registration number. (Land Instrument Registration Law)
- GOVERNOR’S CONSENT- Before a title is deemed passed in law, the Governor must have consented through the Governor himself or his Attorney General.
The Legal aspect in Real estate business cannot but be over looked . It saves you from going to jail (land has now been included to be an item capable of being stolen under the Criminal laws of Lagos State), Fraudsters and impostors (see Lagos State Property protection Law 2016) Losing your money, Government compulsory acquisition, Unwarranted expenses and litigation, Curses after death. ( Wills Law and Acts.)
Once again, my many thanks goes to FRIENDS BUSINESS DEVELOPMENT NETWORK for honoring me with an invitation to speak to a very interesting audience.
Good job barrister