Everyone wants to own a land because of its appreciating value. A land at an urban location with an affordable price, what offer can be better than that.
However, there are certain steps you must follow if you want to buy a land. Especially in Nigeria, it is necessary to avoid being defrauded by fraudsters who pose as estate agents.
Pre contract stage: At this stage, the essential terms of contract are discussed, negotiated and agreed upon between the vendor (owner of land) and the purchaser. Such terms are; purchase price, deposit price, possession of land, payment of balance of purchase price, completion date, insurance etc.
Contract stage: At this stage, there is a complete agreement between the parties on the essential terms of the contract. Therefore a formal contract is drawn creating a contractual relationship between the parties.
This contract is usually in writing which includes all terms agreed upon and it is signed by the contracting parties. A deposit which is usually part of the purchase price is paid to secure the performance of the contract. Payment of deposit is not compulsory but however it is necessary to prevent the vendor or purchaser from changing his mind. The deposit price may be forfeited if the either of the parties changes his mind.
A formal contract protects the interest of both parties to prevent last minute withdrawal by either parties or changes in the terms of the contract agreed upon. It also introduces some assurance to the conveyance and the purchaser acquires an equitable title to the land.
Post contract stage: This is also known as the investigation stage. At this stage, the title of the vendor is examined. To do this, the vendor’s solicitor gives the purchaser’s solicitor the Abstract of title and Epitome of title. Abstract of title summarise the history of transactions on the land in a chronological order while Epitome of title is a schedule of all documents relating to the land. These documents reveals at a glance any defect in the vendor’s title. The purchaser’s solicitor may raise requisition (queries or questions) in respect of any inconsistency in the two documents given to him.
Also at this stage, the vendor solicitor is obligated to disclose all latent (non noticeable) defects on the land. When he doesn’t do so, it can vitiate the contract. He is not obligated to disclose the patent (noticeable) defects on the land. It is the obligation of the purchaser’s solicitor to check for any patent defects on the land. He does this by physical inspection of the land, conducting a search at the Land Registry, Probate Registry, Corporate Affairs Commission and Court Judgement. After this, he writes a search report and send it to the purchaser with his honest comment and advice on the purchase of the land.
Completion stage: At this stage, the parties will change to Assignor (formerly vendor) and Assignee (formerly purchaser). A deed of assignment will be drafted by the assignee’s solicitor. This deed is signed by both parties and witnesses. Payment of balance of purchase price is paid and the assignor transfers the title documents to the assignee. The legal interest on the land is hereby transferred to the assignee.
Post completion stage: This is also known as perfection stage. It involves 3 steps.
Obtaining The Governor Consent: This is obtained by an application for Governor’s consent sent to the Ministry of Land. And where the Governor approves and consent to the sale of land, he either personally or through the commissioner of land signs the deed of assignment of such sale.
Payment of Stamp Duties: This must be done within 30 days of signing the deed of assignment. Failure to stamp may make the documents not eligible for registration. The amount to be paid usually 2% or 3% of the contract sum is calculated by the State Board of Internal Revenue. After payment of the stamp fee, the copies of the deed of assignment is stamped by the State Board of Internal Revenue.
Registration of Land Documents: This is done within 60 days of signing the deed of assignment. The documents are registered at the State Land Registry. This is essential because it gives a notice to the world that the purchaser is the new owner of the land and it prevents fraudsters from meddling with the registered land. A registered land document also serves as an evidence of ownership of land in court.
This is a brief summary of the stages involved in buying a land. However, the first thing to do when contemplating buying a land is to inform a lawyer. A lawyer is needed because of the technicalities involved in a sale of land transaction.
Therefore, with a good lawyer and carefully following the steps above, I can assure you that you will buy a land with a good title.