This article covers the 6 Types and Implications of Property Deeds in Nigeria. Overview of different types of property deeds, their uses, and implications for property ownership and transfer in Nigeria
It is not a simple feat being a landed property owner within God’s own country, Nigeria. Though this flex is rather underrated, nowadays owning a landed property especially a house is a significant achievement and a proper investment strategy.
The Nigerian country bears a wide expanse of land which is a highly valuable asset, offering huge potential returns for intensive investment from serious real estate stakeholders.
As such, the next criterion should be how to properly acquire and effectively manage these lands to one’s benefit. This criterion highlights the need for real estate stakeholders to navigate the complexities of owning a landed property.
But to actualise this reality, we need to come to terms with the fact that within the Nigerian real estate market, ownership of a landed property is secured and can only be conferred by the appropriate property deed or title. This is because these property deeds specifically represent the owner’s legal rights to keep hold of a property, hence understanding the significance of property deeds is equivalent to understanding the ownership of the property itself.
This article has been designed to provide a deep understanding of land and property deeds in the Nigerian society, explaining significant concepts like its meaning, types and its overall impact regarding property ownership within the country. This is essential for prospective investors who seek to enter fully into real estate within the country.
What is a property deed?
A property deed is legally synonymous to a landed property document as it is similarly used to confer ownership of a landed property, clearly defining the owner’s rights to such affiliated property.
Property deeds are specialized legal documents that are used to transfer and convey ownership rights within a real estate transactional process.
These documents are highly crucial in ensuring that these real estate transactions are legally binding, conducted within legal jurisdictions and protects the interests and rights of all involved parties.
In the Nigerian ecosystem, property ownership can be a very complex task for real estate stakeholders thus owning a house or piece of land with unofficial claims might not just cut it. One needs to deeply understand property deeds and documents to adequately save his resources from avoidable mistakes that might require costly and expensive solutions.
A good understanding of these property deeds and other related ownership documents will help ensure that is in total compliance with the legal property rights and help to mitigate the risks and complexities associated with property acquisition and ownership.
Before moving any further, it’s ideal to ascertain how these property deeds came to be first implemented within the world of real estate.
Through research, the earliest insights on property deeds in Nigeria were established as far back as the late 1900s, after the implementation of the Land Use Act of 1978.
The land use act of 1978 is a policy that is implemented to vest all lands within the vicinity of a state by the authority of the acting governor of the particular state.
So in summary, the land use act is all about recognising the acting governor as solely responsible for holding and properly distributing its state lands particularly within urbanised regions to its state residents and organisations alike who seek to use the land for different purposes.
These might be commercial, residential or even for agricultural activities. An exemption is granted in some cases for lands belonging to federal government and national agencies alike.
However it is important to note that before purchasing any landed property, it is very paramount to familiarise with the various types of property deeds that is present in the Nigerian society. It is crucial to understand that some property transactions might offer some variations within its ownership transfer processes, hence more than one particular document might be required for such transactions.
Types of property deeds
There are different types of property deeds, each designed from a specific purpose and producing unique implications on real estate transactions.
Some of these are;
1. Certificate of Occupancy (C of O)
This is by far the most common of all property documents when discussing about real estate ownership within Nigeria. It is a legal document that is granted by the state government as a proof of ownership of a particular landed property. It usually indicates that the document bearer has earned the right to own and use the stated landed property for a specified duration of time.
Any land duly protected with the C of O as at the time of purchase by a buyer does not need to have the document replaced, but the new owner is only required to obtain another document; the deed of assignment from the state government to legally ascertain the new ownership.
Registering for a C of O usually first involves the property owner sending an application via the secretariat or any other means to the state government. After which the C of O document is approved to the owner after a few weeks after the legitimate ownership of the property has been properly verified by the state government.
2. Deed of Assignment
This type of property deed is used to legally signify the transfer of ownership rights from the selling party to the buying party of the real estate transaction. In this case the seller, i.e. the current owner is termed as the ‘assignor’ while the buyer is referred to as the ‘assignee’
This particular property deed is very integral to legally finalizing the transfer of property rights and ownership, hence it should be registered and approved within credible legal jurisdictions to ensure its validity. Thus, a valid deed of assignment is usually drafted by a competent real estate attorney or any other legal practitioner and co-registered at the court of law or land registry.
A typical deed of assignment should be well detailed, bearing important information such as names of assignor and assignee, property description, payment amount and conditions and any other terms and conditions required of that transaction.
3. Deed of Conveyance
This property deed is very similar to the deed of assignment as it is also used to finalise the transfer of ownership of a landed property though in this case without any external encumbrances.
This signifies that unlike the deed of assignment that handles the transfer of leasehold property titles, that deed of conveyance is used to handle the ownership transfer of freehold property titles. This means that the deed of conveyance is strictly documented between the involved parties; the buyer and seller without any interference or limitations of a third party.
Hence freehold titleholders are granted the exclusive right to use and develop their property to their own specifications only being subjected to local property laws and zoning regulations.
In addition, though the deed of conveyance also bears important details like the property purchase price, property description, property warranty etc, in a sharp contrast to the deed of assignment, the property seller and buyers are referred to as ‘grantors’ and ‘grantees’ respectively.
4. Survey plan
This is a land document that is used to display accurate and exact dimensions of a land to be purchased. It maps out the measurements and boundaries of a particular land and is usually prepared by a qualified and licensed surveyor. It is usually attached to any deed of assignment or conveyance in a real estate transaction, as it provides a way to verify and cross-reference whether said land specifications are exact and true.
Additionally when registering for a C of O from the government, this survey is prerequisite to ensure that one sticks to his boundaries, and that the particular land in question is free from any encroachment claims.
5. Power of Attorney
This document is not considered a property deed by many, while others do. Though in either case it’s a notable mention to discuss.
This document legally grants a third party usually a legal practitioner or a real estate attorney, the power to act on the property seller’s behalf in a transactional set-up. It is usually resorted to in situations when the property seller is unable to handle these transactional affairs by himself. This might be caused by sickness, urgent travel matters or any form of absence at all.
A power of attorney document can be designed to be limited in scope, granting the attorney a limited say only in specific matters regarding the real estate transaction.
6. Deed of gift
This type of property deed is used to finalise the legal transfer of ownership rights of a landed property between two parties without expecting any monetary compensation or payment. This is most commonly found in cases of family members and inheritance cases , which usually involves when a parent or family relative gifts a land or any other estate property to a child or family member.
This particular legal document acknowledges such property legally as a gift. After which proceeding formalities can be easily carried out for permanent property transfers.
Conclusion
For anybody involved in a real estate transaction, understanding property deeds and how they protect individualistic interests is very important.
Either as a buyer or seller, realtor or estate developer, these property deeds will provide insightful information on real estate transactions all whilst acting as legal proofs and evidences. Security, protection, risks mitigation are all benefits one can enjoy from understanding the scope and nature of property deeds and documents.
So to this end to effectively acknowledge these importance of using property deeds, individual and organisational stakeholders alike must navigate the complexities of real estate transactions using these property deeds, this will improve the legitimacy and legal backing of their property transactions.
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