15 STATUTORY LAWS GOVERNING LAND/PROPERTY TRANSACTIONS IN NIGERIA: PART 1

Many people do not know that there are some statutory laws that have been enacted and established by both the state and federal government to regulate, guide and govern all forms of land and landed properties’ transactions in Nigeria which could make such transaction illegal or even lead to forfeiture whenever the parties to the transaction do not adhere to the provisions of such statutory laws as been laid down or stipulated.

Land and landed properties are static in nature and because they are immovable, hence the Latin maxim “Quicquid plantatur solo solo cedit” (meaning; whatever is affixed on the land belongs to the land).

Land and landed properties’ transactions (ownership, sales, acquisition, lease, mortgage, alienation, assignment/conveyance, sublease) are a contractual relationship between two or more persons for exchange and release of interest they have on land and landed property in consideration for a compensation which is usually of monetary value in nature.

For the protection of all parties involved in any or all of the above mentioned transactions as well as making such transactions legal and tenable in any court of law, the government (state and federal) of the federation has enacted some statutory laws to guide, govern and protect all persons who find themselves embarking on any of these land and landed properties’ transactions in Nigeria.

There are so many reasons why government enacts statutory laws to govern and guide land and landed property transactions in Nigeria. Some of which are:

·         To help generate additional revenue for government

·         To add up to the Gross Domestic Product (GDP) of the economy

·         To endeavour government carry out one its constitutional statutory function of protecting lives and properties

·         To protect land/property investors and owners against fraud

·         To have a detailed record of all land and property transactions in the country

·         To assist government in planning towards adequate provision of infrastructural facilities in the country

The first part of the statutory laws governing land/property transactions in Nigeria which I will write on are:

1.      Land Use Act

2.      Land Instruments Registration Laws

3.      Registration of Titles Acts

4.      Rent Control and Recovery of Premises Acts

5.      Tenancy Law of Lagos state

6.      Tenement Rate Laws

7.      Land Use Charge Law of Lagos state

1.      LAND USE (1978) ACT CAP L5 LFN 2004

This is the foremost and most widely recognized statutory law guiding, regulating and governing all matters relating to land/property ownership and transactions in Nigeria.

It was promulgated on March 29^th, 1978 by the then Military head of state; Gen. Olusegun Obasanjo.

The Act vested all land compromised in the territory of each state (except land vested in the Federal government or its agencies) solely in the Governor of the State, who would hold such land in trust for the people and would henceforth be responsible for allocation of land in all urban areas to individuals resident in the state and to organisations for residential, agriculture, commercial and other purposes while similar powers will with respect to non urban areas are conferred on Local Governments.

The major objectives of the Act among other things are:

·         To create a uniform land management and administration system by absorbing the various land tenure laws in each state of the federation by promulgating a single land law

·         To make everybody have equal rights and access to land throughout the federation

·         To curb land speculation activities in the country

·         To break up the traditional land holding system by making land readily available for everybody irrespective of their ethnic background or religious beliefs

The Act made the governor of each state of the federation to be the chief custodian of land within the territory of that state for the common benefit of all Nigerians.

The major sections that relate to matters regarding land/property ownership and transactions in Nigeria are: Sections 1, 2, 3, 5, 6, 8, 9, 10, 15, 21, 22, 23, 24, 25 and 26.

Section 1 of Act states that “Subject to the provisions of this Act, all land comprised in the territory of each State in the Federation are hereby 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 in accordance with the provisions of this Act”

What this implies is the vesting of land management and administration on the governor of each state of the federation who is seen as the only statutorily recognized person to allocate land to whosoever requires it for different purposes.

In so doing, a form of landlord-tenant relationship was created by the promulgation of the Act as the governor is seen in law as the landlord and every other persons that needs/wants land for varying uses as tenants.

Section 5 (1) (a) (b) of the Act states that “It shall be lawful for the Governor in respect of land, whether or not in an urban areas-

(a)   to grant statutory rights of occupancy to any person for all purposes

(b)   to grant easements appurtenant to statutory rights occupancy”

What the Act grants an holder of land be it an urban or non-urban land in Nigeria is just a mere right to use the land for a predetermined period/term (99years) after which such land will automatically revert back to the governor at its effluxion except such holder of land renews his/her right of occupancy at its expiration. 

Section 8 of the Act states that “Statutory right of occupancy granted under the provisions of section 5 (1)  (a) of this Act shall be for a definite  term and may be granted subject to the terms of any contract which may be made by the Governor and the holder not being inconsistent with the provisions of this Act”

Evidence of the governor granting a statutory or customary (depending on the scenario as spelt out in Section 2 (2) (a) and Section 3) right of occupancy is the issuance of a Certificate of Occupancy to the holder of such right of occupancy.

Section 9 (1) of the Act states that “It shall be lawful for the governor-

(a)   when granting a statutory right of occupancy to any person or

(b)   when any person is in occupation of land under customary right of occupancy and applied in the prescribed manner; or

(c)    when any person is entitled to a statutory right of occupancy, to issue a certificate under his hand in evidence of such right of occupancy”

Section 9 (2) states that “Such certificate shall be termed a certificate of occupancy and there shall be paid therefore by the person in whose name it is issued, such fee (if any) as may be prescribed”

The Act also grants a holder of a statutory right of occupancy the exclusive right and possession of all the improvements on such land as well as the right to alienate, mortgage, sub-lease, transfer, and assign any improvements he/she enjoys on the land subject to the consent of the governor to make such transaction legitimate.

Section 15 (a) (b) states that “During the term of a statutory right of occupancy, the holder-

(a)   shall have the sole right to and absolute possession of all the improvements on the land

(b)   may, subject to the prior consent of the Governor, transfer, assign or mortgage any improvements  on the land which have been effected pursuant to the terms and conditions of the certificate of occupancy relating to the land”

The Act does not permit or give any holder of a statutory right of occupancy the exclusive power to embark on any form of transaction on the land he/she has been granted a right of occupancy without the consent of the governor, but where such transaction is undergone and completed, it will be regarded as null and void except as otherwise stated in Sections 21, 22, 23, 24 and 25 of the same Act.

Section 26 of the Act states that “Any transaction or any instrument which purports to confer on or vest in any person any interest or right over land other than in accordance with the provisions of this Act shall be null and void”

2.      LAND INSTRUMENT REGISTRATION LAWS

The law was enacted to regulate registration of instruments that are executed prior to and after the establishment of the Act in Nigeria. Registrable instrument includes an estate contract, a deed of appointment or discharge of trustee containing expressly or impliedly a vesting declaration affecting any land.

The law seeks to guarantee genuine land title documents that have been investigated and registered by the Registrar of Titles in each state of the federation.

Land registration Act 1924 of Nigeria defined “registrable instrument as a document affecting land whereby one party called the grantor confers, transfers, limits, charges or extinguishes in favor of another party called the grantee any right or title to the interest in land and includes a certificate of purchase, a power of Attorney under which any instrument may be excluded but does not include a will”

Therefore, it is generally agreed that a registrable instrument is a document, which transfers or creates a right, title or interest in land to or in favour of the grantee. But a will is expressly excluded from the ambit of registrable instruments. Consequently, a sales receipt, purchase receipt is not a registrable instrument if it is a mere acknowledgment of sales or payment and does not confer or transfer interest in land.

What this simply means it that it is compulsory and mandatory for any holder of an interest in land who wishes to transfer same to another person to have registered such document at the appropriate land registry office been established by government as it will greatly help purchasers of such land in determining if the owner/seller has the genuine land title document to sell the property and all encumbrances that are attached to the land.

To authenticate the transfer of title in any land transaction, the law requires the holder of such title to apply for the governor’s consent to the Deed of Assignment which is been executed by both the seller and buyer in such scenario. 

After approval of the governor’s consent, the Deed of Assignment document will then be stamped at the Stamp Duties office and thereafter registered at the Lands Registry office.

To hasten the registration of instruments in Nigeria, the law established in each state of the federation a Land Registry with the appointment of a Land Registrar charged with the responsibilities of registering documents affecting land transactions and keeping same in the book of instruments register.

This law has been re-enacted in most states of the federation.

3.      REGISTRATION OF TITLES ACT

Registration of Titles Act of 1935 now referred to Registration of Titles Law of Lagos State Cap R.4 of 2003 was introduced to correct the inadequacies in the registration of instrument Act of 1924 now known as the Registration of Instrument Laws in various states. 

The basic principle of the Registration of Titles law is that ownership of title to land is based on the fact of registration, that is, it operates to register dealings and transactions over titles in land when such titles have been registered.

The object of the law is to substitute a single established title guaranteed by the state for the traditional title which must be separately investigated before purchase. And, must be proved by several documents of title each time the title is in issue. Transactions in respect of registered land such as leases, creation of charges, and transfer of interest in land are also required to be registered.

The law further encouraged all those involved in any land transaction to investigate the genuniety of the title documents of the land at the appropriate land registry where there exists a copy of the registered title document of the land before embarking on concluding the deal. 

4.      RENT CONTROL AND RECOVERY OF PREMISES ACTS

The Rent Control and Recovery of Premises Act is enacted in each states of the federation to guide and regulate all matters relating Landlord-Tenant relationship in any residential property lease transactions.

The main purpose for the enactment of this law was to restrict the common law rights of a landlord with the intent of regulating the recovery and restraining unlawful eviction of the tenant from the landlord’s premises.

The law spells out the proper procedure which a landlord can/should take in recovering possession of his residential property from the tenant after expiration of the rent period. These procedures are primarily spelt out so as to protect the tenant against that of the landlord.

The procedures for the recovery of residential leased premises by the landlord as spelt out in Rent Control and Recovery of Premises Acts in Nigeria are:

·         The landlord must give a Notice to quit to the tenant

·         The landlord must give Notice of Owner’s intention to recover possession of the rented premises to the tenant

·         The landlord must apply for a Writ of Possession at the appropriate court of law

·         The landlord must obtain an Order of Possession from the appropriate court of law

The grounds for which the landlord can rely on in obtaining an order of possession from the court of law to recover possession of his/her rented premises from the tenant are:

·         Arrears of rent

·         Breach of any covenant or agreement by the tenant

·         Where the property is required for personal use by the landlord

·         The premises is been used for illegal or immoral purposes by the tenant

·         The premises has been abandoned by the tenant

·         The premises is unsafe and unsound as to constitute a danger to human life or property

·         The tenant or any person residing or lodging with him being his sub-tenant constitutes by conduct, an act of nuisance or induces a breach of the tenancy agreement

5.      TENANCY LAW 2011 OF LAGOS STATE

As the name implies, the Tenancy Law 2011 is a Law of the Lagos state House of Assembly enacted to “regulate rights and obligations under tenancy agreements and their relationship between the Landlord and the Tenant including the procedure for the recovery of premises and for connected purposes”

This law is basically enacted by the Lagos state government in other to regulate and guide all matters relating to residential properties’ lease transactions between the landlord and tenant in some parts of the state excluding Apapa, Ikeja GRA, Ikoyi and Victoria Island.

The law automatically fixed all residential properties’ lease transactions to that of yearly tenancy for new tenants as well as regards it as unlawful for any existing yearly tenant occupying a residential apartment in the state to pay more than a year rent to the landlord.

Section 4 (1) of the Law states that “It shall be unlawful for a landlord or his agent to demand or receive from a sitting tenant rent in excess of six (6) months from a monthly tenant and one (1) year from a yearly tenant in respect of any premises without prejudice to the nature of tenancy held at the commencement of the tenancy

(2) It shall be unlawful for a sitting tenant to offer or pay rent in excess of one (1) year for a yearly tenant and six (6) months for a monthly tenant in respect of any premises

(3) It shall be unlawful for a landlord or his agent to demand or receive from a new or would be tenant rent in excess of one (1) year in respect any premises”

Some of the reasons for the enactment of the law are as follows:

·         To regulate the tenancy period which the landlord or his/her agent should demand rental money from a new tenant (i.e 1 year rent as against the popular demand of 2years rent)

·         To stipulate how much rent money a new tenant should pay the landlord

·         Mandate landlords to issue a rent payment receipt to a tenant in respect of such payment made by the tenant. The receipt to be issued by the landlord to the tenant must include the names of both the landlord and tenant, full description of the rented property, amount of rent paid and period for which the rent relates.

    Mandates landlord and tenant to always prepare a tenancy agreement which will spell out the rights and obligations of both parties on the rented property by employing the services of a professional and paying same in the preparation of the tenancy agreement

·         Spell out ways and conditions by which a landlord can evict a tenant from his/her property as well as recover full possession of same

·         Encourage all parties involved any form of tenancy disputes to seek redress in a competent court of law or Alternative Dispute Resolution centre

6.      TENEMENT RATE LAWS OF NIGERIA

Tenement or property rating is a form of tax levied on landed properties by local government authorities in Nigeria to raise additional revenues required for specific developmental projects within such local government area.

The law is enacted to impose tax on built up landed properties in Nigeria which is collected at the local government level on owners of such built-up properties.

The premise for enacting of the law is to levy property owners towards contributing to raising additional funds for infrastructural development projects been embarked upon by the local government authority where such built-up property is situated.

Every state in Nigeria has their own tenement rate laws at the local government level applicable to built-up hereditaments.

7.      LAND USE CHARGE LAW 2001 OF LAGOS STATE

The Land Use Charge law of Lagos state is synonymous to the tenement rate laws that are exists in every state in Nigeria, but just that it abolished all other taxes such as tenement rates, ground rents and neighbourhood improvement charges levied on land and landed properties in Lagos state to create a single property tax law.

The main purpose for the enactment of the Land Use Charge law by the Lagos state government on all land and landed properties in the state is to enable the government generate additional revenues needed to carry out continuous infrastructural development projects as well as improve the existing ones to cater for the growing population of people in the state.

Through the enactment of the Land Use Charge Law (LUCL) of Lagos state, all rates and charges which were initially imposed on land and landed properties seized to be effective as there now exists a single property tax law called Land Use Charge imposed on all land and landed properties in Lagos state.

“The responsibility for payment of the Land Use Charge resides primarily with the property owner; however, there is provision in the law establishing the charge, for payment to be made by the occupier who is then empowered to look to reimbursement of the charge from the property owner.”

………..to be continued

ABOUT THE AUTHOR

Adeniyi Akinjiyan is a Higher National Diploma (HND) holder of Estate Management from the prestigious Yaba College of Technology, Yaba, Lagos state, Nigeria. He possesses a Professional Practice Certificate in Estate Surveying and Valuation from the Nigerian Institution of Estate Surveyors and Valuers (NIESV).

He is the principal consultant of Aakient Consultants Ltd, a highly progressive and consolidated property and construction project management company, which is committed to providing the highest level of professional services in meeting clients’ real estate needs.

Feel free to contact him at: aakientconsultants@gmail.com