16 Nov 3 Real Estate Title Documents and What they Mean for your Investment
Investing in real estate, like any other investment asset class, requires knowledge, information and smart decision-making. With multiple documentation requirements and different verification exercises, successful investment in the sector demands more than the cost price of the property.
As the sector becomes more liberalized and awareness about the viability of investing in Real Estate grows, more people are looking into the industry, but with a very limited and sometimes confusing understanding of the dynamics of transaction.
Here are three of the most important documents in any Real Estate transaction and what they mean for your investment in the sector.
C of O
Arguably the most important piece of document in real estate, C of O enjoys widespread popularity in this part of the world and for good reason. It is a title issued by the Governor of a state to lease a piece of land to an individual for a tenure of 99 years (in line with the Land Use Act 1978 of Nigeria ). C of O is a document of ownership and whomever’s name is on the certificate is legally recognized as the owner or the initial recipient of such land.
Despite holding the title of land, the government wields the right to revoke same if it is deemed to override public interest. As entrenched in the Land Use Act, a land may meet these conditions for eight reasons including parting with the land or a part of the land (such as transfer) in a way that is in contravention of the law; if the land is required by either State or Federal Government; if the land is required for mining purposes, oil pipeline or for the extraction of building materials, to name but a few.
Also, there is a clear difference between a Certificate of Occupancy and Right of Occupancy. The latter is merely an offer to a parcel of land while the former is the official title. As you may have guessed, C of O is a stronger title than R of O, and it is, therefore, important that R of O holders perfect their titles into C of O.
In your homeownership journey, it is critical to verify on your own or through a trusted party that your land title and other documents are legitimate. Possessing a valid C of O is invaluable to both your homeownership and investment journey as it means that in the sad event of the government repossessing your land, you will get compensated either monetarily or relocation to another land. Besides, should you wish to obtain mortgage from a financial institution, C of O could be used as collateral.
On this account, whenever you choose to purchase a piece of real estate—either from an existing owner or directly from the government—be sure to ascertain that such parcel of land carries a valid C of O. At Green Park Estate, our land has verifiable and unencumbered C of O to make certain that your living experience is hassle-free.
PS: Worthy to note that all titles and leases are recorded in an official book called the Gazette which is in the custody of the state government. The document contains every detail of legal land transactions and special concessions by the government including the number of C of O issued and Deeds of Assignment. Also, as a result of the fact that the government acknowledges the importance of land to indigenous community dwellers and traditional rulers, it bequeaths a certain portion of land in a state to them. These parcels of land, free from Government acquisition, are referred to as Excision. They are also contained in the Gazette of the government. Relevance: 10
Deed of Assignment
Deed of Assignment, simply put, is a document stating the transfer of ownership of a parcel of land from one individual to another. Also known as a Conveyance, A Deed of Assignment is only needed in transactions whereby the original recipient of an allocated land from the state government wishes to transfer his claim on such asset to another individual or where multiple transference of ownership has occurred.
A valid Deed of Assignment must contain the name of the C of O holder who intends transferring ownership and the party who the rights of the assets are to be assigned to. To ascertain that a Deed of Assignment fulfils all legal requirements, perfection is required at the Land Registry of the state.
Furthermore, avoid the trap of cunning agents and omo-onile by ensuring that you receive a receipt alongside your Deed of Assignment because most people are cheated out of their hard-earned cash by agents who only provide a receipt of transfer just so they can swindle as many people as possible. In a situation whereby more than one Deed of Assignment is issued on a parcel of land, in an ensuing legal battle, preference shall be given to the recipient whose Deed was issued first
Obtaining a valid Deed of Assignment and Survey Plan are vital in the process of getting the Governor’s Consent, a prerequisite for a C of O. Relevance: 8
To ensure your real estate continues to appreciate in value, a Survey Plan is of utmost importance. A Survey Plan is a legal document that entails relevant information about a parcel of land such as measurement, description, owner and so on. Valid Survey Plans are usually conducted by Surveyors registered under the supervision of Surveyor-General of the state where the land is located. The essence of surveys is to ascertain if the proposed land is under government acquisition; verify that it is not committed and know if it is available to be allocated.
What does that mean anyway? A land under acquisition is owned by the government and there are plans for it. Despite owning this parcel of land, however, the government may decide to allocate it to private citizens on a needs basis. Similarly, committed lands are also owned by the government but the chances of those parcels of land being allocated to citizens are zero to none because tangible plans have been mapped out for them. Allocated lands, as you rightly imagine, are those available to be purchased by the public. No valid C of O can be issued without a Survey Plan.
Thus, before acquiring any real estate, not only must you ensure that you see a Survey Plan but you should also visit the Land Registry of your state to substantiate its authenticity. Relevance: 9