Over the years, property buyers have often faced legal disputes due to inadequate documentation proving clear ownership. Not properly perfecting title can complicate establishing a solid “root of title,” leading to prolonged court battles and uncertainty about property ownership. This challenge highlights the critical need for perfection of title in real estate transactions to avoid costly disputes and ensure secure ownership.
In Nigeria, acquiring property is not as straightforward as simply purchasing and signing a deed. The process involves a critical step known as the “perfection” or “registration” of the title. This step is essential to secure a solid legal title in the new owner’s name. The perfection process involves several stages:
1. Governor’s Consent:
This is the first stage in the registration of title to Land. This is predicated on the fact that registration at the land registry cannot be effectuated without it. The Nigerian Land Use Act in section 1 requires that the Governor’s consent be obtained for any land transaction. This section provides thus:
“Subject to the provisions of this Act, all land comprised in the territory of each State in the Federation are at this moment vested in the Governor of that State, and such land shall be held in trust and administered for the use and common benefit of all Nigerians by the provisions of this Act.”
This provision underscores the Governor’s control over land within the state. Where the Governor’s consent is not obtained in respect of the alienation of landed property, such transactions are inchoate as held by the Court in the cases of Awojugbagbe Light Industries Ltd. V. Chinukwe (1995) 4 NWLR (Pt. 390) 379; Fruit Tropic Ind. Ltd v. Amodu & Ors (2020) LPELR-51675(CA) and unlawful as provided in Sections 21 & 22 Land Use Act 1978 and held by the Court in the cases of Jauro & Ors V. Hon. Commissioner, Ministry of Land & Survey Adamawa State (2013) LPELR-20849(CA).
Where an application for Governor’s consent was sought but was declined, the transfer of legal interest is invalid, null, and void. However, where it was not sought for at all in the first place, the transaction is inchoate, incomplete, and voidable as held by the Court in the case of Awojugbagbe Light Industries Ltd. V. Chinukwe (Supra).
2. Stamping:
Legal documents must be stamped as evidence of payment of the requisite duties. This is provided in Section 23 (3) a of the Stamp Duty Act 1939. This section provides thus:
“The instrument, unless it is written upon duly stamped material, shall be duly stamped with the proper ad valorem duty before the expiration of thirty days after it is first executed, or after it has been first received in Nigeria if it was first executed at any place outside Nigeria.”
This must be done within 30 days of execution of the Deed of assignment or any other registrable instrument which seeks to transfer title or ownership of land. Where stamping is done beyond 30 days after the execution of the instrument of transfer, it attracts sanctions as provided in Section 23 (3) b of the Stamp Duty Act 1939. It is important to note that an unstamped document will not be accepted for registration at the land registry.
3. Registration:
The final stage in perfection of title involves registering the transaction with the Land Registry to make it officially recognized and enforceable. Once the procedure for registration of interest or title to land is successful the title can be said to have been perfected or registered.
However, where a person fails to register their interest in land, the instrument of transfer confers on them no legal title but equitable title. The document may not be admissible in evidence to establish legal title to the land but it is admissible to prove such equitable interest and to prove payment of the purchase sum for the land as held in Muhammed V. Farmers Supply Co (Kds) Ltd.
Benefits of registration:
- It serves as notice to the whole world that the property has been encumbered.
- It gives priority to the instrument registered first in time.
Effects of non-registration:
- It may not be pleaded or given in evidence to establish title to land.
- Where the documents are not registered at the appropriate land registry, it will not constitute notice of encumbrance to the world.
- The Purchaser is at best conferred with equitable interest in the property which may lose its priority to a bonafide purchaser of legal estate for value without notice. This was held by the Court in the cases of Ankama & Anor V. Nzeoji & Anor (2022) LPELR-57998(CA) and Briggs v. C.L.O.R.S.N. & Ors (2005) LPELR-805(SC).
Challenges in the Perfection Process
Several challenges can arise during title perfection such as:
1. Government Acquisition: The property may be under government acquisition or part of an excision, complicating the process.
2. Payment Delays: Delays in the payment of assessed fees can halt the process.
3. Internal Bureaucracies: Bureaucratic delays within the Land Bureau can also impede progress.
4. Property Location Issues: Difficulties in ascertaining the exact location of the property for inspection can cause delays.
In conclusion, the imperative for perfecting title in real estate transactions cannot be overstated, particularly in Nigeria where clear ownership hinges on meticulous processes like obtaining Governor’s consent, proper stamping, and registration. Failing to complete these steps can lead to prolonged legal battles and uncertainty over property ownership.
Securing a robust legal title through proper perfection measures is essential to safeguarding your investments and ensuring unequivocal property ownership. Investing in Nigerian real estate can be a lucrative venture, but it requires careful navigation of legal and administrative processes. Therefore, consulting with a reputable real estate vetting company is imperative to guarantee the security and compliance of your investments with all the essential legal requirements.