It is imperative to state that every purchaser of land in Nigeria must recognize that the process of acquiring a good title to land does not terminate after the execution of the transfer instrument by the parties to the transaction. The completion of the acquisition of interest in land is what is referred to as Perfection of Title. It is a process which secures the ownership rights of the purchaser against future risks which is sadly, a common feature in land transactions in Nigeria. Land referred to above is not limited to an undeveloped land but also include developed land. It is also pertinent to note that perfection of title is applicable to all land transactions and not just sale of land. Transactions such as legal mortgages, irrevocable Power of Attorney, Deed of gift, Deed of Assignment, Deed of Sublease and transfer of certificate of occupancy are all instruments that must be registered to protect the interests of the parties that acquired the title or granted an interest in the land.
The process of perfection of title to land is in three stages which are all mutually dependant on one another. These stages are obtaining of the Governor’s consent, stamping of the instrument and registration of the documents. The first step to be taken by a party to complete the acquisition of a good title to land is that he must seek and obtain the approval of the Governor of the state where the land is located. This approval to land transaction is what is famously referred to as Governor’s consent. The Land Use Act which is the primary legislation regulating all interests in land in Nigeria mandates that the consent of the Governor of the state must be obtained to ensure that the transaction is valid under the law. The Land Use Act expressly vests the control and management of land in Governors of each state is held in trust and administered for the benefit of the citizens of the state.
Thus, the question then is who is expected to apply for the consent? The clear wording of the law under section 22 of the Land Use Act states imposes the responsibility on the party who intends to transfer his title. In other words, for instance in a sale of land, the appropriate party who is expected to apply for the Governor’s consent is the vendor and not the purchaser. However, in practice, it is the purchaser that applies for the Governor’s consent. This is because in most cases, once the vendor sells the property, he may become inaccessible to the purchaser or may even demand more cash from the purchaser given that the vendor has nothing to lose if the transaction is incomplete. In fact, some unscrupulous purchasers may seek to nullify the sale on the basis that the Governor did not consent to the sale. While a lot of cases on these set of facts have been decided by the court in favour of the purchaser, it will be foolhardy for any purchaser to rely on the vendor to carry out such an important step for him. It will be in the interest of the purchaser as the beneficiary to take immediate steps to obtain the consent.
While it is not a legal requirement to engage the services of a legal practitioner to perfect title to land, it is advisable to enlist the services of one owing to the fact that the process is extremely cumbersome and bureaucratic especially in Lagos and probably Abuja. It is essential that you provide the following documents to your solicitor in order to facilitate the process. Various states have their individual requirements and should be noted that these list is not exhaustive:
·Vendor/grantor’s root title document
·Four copies of the instrument of transfer e. G Deed of Assignment, Deed of Mortgage or Irrevocable Power of Attorney
·Four Survey plans
·Three years Tax Clearance of the Parties
·Evidence the payment of Land Use Charge
After the Governor’s Consent has been obtained, the next step is be the stamping of the document. According to the law, an instrument of transfer must be stamped within thirty days of obtaining the Governor’s Consent. Where the parties involved are individuals, the state internal revenue service will be the appropriate organisation to receive the payment while the Federal Inland Revenue Service will receive the payment where a company or companies are parties to the transaction. It is calculated according to the consideration paid on the property or the value of the transaction. It could be around 2% to 3% of the value of the transaction.
It is obligatory that the stamp duty on the transaction is paid because failure to make the payment is consequential for the party that acquired the title. First, any instrument of transfer which is not stamped will not be accepted for registration by the land registry. This will be further discussed subsequently.
The second consequence is that in an event that a dispute arises over the land, the instrument of transfer will be inadmissible in court as an evidence of ownership. It should also be noted that late stamping of a document attracts penalties. In most states of the federation, the stamp duty charged may be between 2% and 3 % of the value of the transaction.
The final stage in the perfection of title in land is the registration of the title document by the Lands Registry. In Lagos State, the registration of title to land is governed by the Lagos State Lands Registration Law, 2015. Section 62 (1) of the law provides that ”the mode of transfer of an interest in land, sub-lease or mortgage must be by deed, such transfers shall be deemed to be complete only after the deeds have been registered at the Land Registry”
The land registration process involves two systems which are Deed Recording and Title Registration of the ownership. Deed recording system helps to give publicity to land transactions, that a claimed interest already exists on the land, and to establish priority against any subsequent claim to the same interest. The end benefit of this system is to prevent any form of fraud while title registration is an authentication of the ownership or legal interest in a land. This system simply confirms transactions that confer ownership or interest. When the land is registered in the register, it serves as conclusive proof of title.
The Land Registry Directorate is saddled with the responsibility of keeping an updated record of all registered land transactions, deeds, assent, vesting deed, court judgment, deed of release, issuance of loss of documents, certified true copy (CTC) and conducting a search. The essence of this registration is to give notice of the encumbrance and the transfer of the title to the new owner. Where another party intends to purchase or acquire title on the land, upon a thorough investigation, such a party will be notified of the prior interest. It is also an opportunity for the government to conclusively record and register all matters connected to the possession and ownership rights on the land for safe custody. It provides evidence of title thereby preventing unlawful transfer of ownership. It raises a presumption of the land ownership in favour of the party that registered the land against any other party that lacks a better title. To explain this, it means that though a person who registers a land is presumed to be the rightful owner of the land. However, in a situation that another party succeeds in proving that the land was registered fraudulently or that the party who registered the property is not the rightful owner, such a registration will be null and void.
Consequently, registration of land is a conclusive evidence of ownership but maybe displaced by a person that has a better title. So a fraudulent person who registers a land that does not rightfully belongs to him should not believe that he has succeeded in manipulating the system. Where a rightful owner of land refuses to register a land, the interest of that person will only be equitable. The legal interest of land will be in suspension. A further consequence is that an unregistered instrument of transfer shall be inadmissible in court in a situation the title owner intends to defend his title in a case of a dispute.
Further, an unregistered land owner will not be entitled to any statutory compensation in a situation the land is compulsorily acquired by the government for an overriding public interest. Also, in a situation where a dispute occurs on the land between two parties on the ownership or the possession of the land, the interest of the party who registers the land will rank higher than the other party who failed to register his interest. In some rare occurrences, two parties may succeed to register the same land. In such an event, the interest of the first party who registered will be given priority over the party who registered at a later date. First in time is preferred by the law.
In an event that the document of transfer is declared missing or destroyed for whatever reason, it will be easily recovered if it was registered because the land registry retains copies of registered land. There have been numerous cases where descendants of deceased persons were able to recover long lost documents due to the fact that the land was registered.
Olamide Onifade is a practising lawyer and the founder of Olamide Onifade & Associates.
2nd Floor, 149, Ogudu Road, Ogudu, Lagos
Tel: 09093335636
Instagram: Olamide_lady_lawyer
Email:barristerolamideonifade@gmail.com
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