Property transactions in Nigeria can be lucrative and rewarding, whether you’re purchasing a home, renting commercial space, or investing in land. However, navigating the legal complexities of these transactions can be tricky. Many property buyers and sellers fall into common legal traps that can lead to costly and lengthy litigation process, delays, or even loss of investment.
In this post, we’ll explore some of the most frequent legal pitfalls in property transactions in Nigeria and offer practical advice on how to avoid them.
Overlooking the Due Diligence Process
Due diligence is a critical step in any property transaction. This process involves thoroughly checking the property for any potential issues, such as, environmental concerns, or ongoing disputes. Failing to conduct proper due diligence could result in buying a property that is not suitable for your intended purpose, or worse, buying a property that is under legal dispute.
How to Avoid This Pitfall:
- Conduct a full due diligence check before finalizing any transaction. This should include verifying ownership, checking for any legal disputes, confirming and reviewing building permits or environmental impact assessments.
- A lawyer specializing in property law can assist you with due diligence and help uncover any potential issues that may not be immediately apparent.
Failure to Verify Property Title
One of the most significant legal risks in property transactions is buying or selling property with an unclear or fraudulent title. Title verification is crucial to confirm that the seller is the rightful owner of the property and has the legal authority to sell it. Without verifying the title, you risk purchasing property with encumbrances, such as unsettled mortgages, community land disputes, or conflicting ownership claims.
How to Avoid This Pitfall:
- Always conduct a title search at the appropriate land registry (e.g., the state land registry).
- Engage a qualified lawyer who can help verify the authenticity of the title document and ensure that there are no hidden encumbrances in the deed or disputes.
Neglecting Proper Documentation
A significant number of property disputes arise from a lack of proper documentation which could stem from poorly drafted agreements or incomplete records of transactions. Not having the correct legal paperwork can create significant problems. In some cases, informal agreements or “verbal” contracts can lead to misunderstandings or fraud.
How to Avoid This Pitfall:
- Ensure that all agreements (sale, lease, or otherwise) are documented in a written format and signed by both parties.
- Have the documents professionally drafted or reviewed by an experienced property lawyer to ensure that they are legally binding and enforceable.
Conclusion
Taking this few short processes with the aid of a property lawyer can save one from futuristic problems as regards a property one purchases. It is advisable to do the needful to avoid property pitfalls which are very costly.
Mayowa Ojumoola Esq.
For: Biola Adimula & Co