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LAND ACQUISITION IN NIGERIA (published in the Maiden Issue of Nigerian Property News) INTRODUCTION Nigeria is a Federation, comprised of 36 States and a Federal Capital Territory; each State is divided into several local governments areas.i Various tiers of government therefore influence transactions in land somewhat. Since 1978, the major legislation regulating the acquisition of land within the country has been the Land Use Act of 1978.ii The Act more or less establishes a uniform system of landholding for the entire country.iii It is therefore correct to say that acquisition of land in Nigeria would involve the same basic legal principles, regardless of the particular State of the Federation in which the land is located. The Act also provides that all land in a State is to be held in trust by the State Governor for the benefit of 'all Nigerians'. As this provision does not discriminate between indigenes and non-indigenes of the State in question, properly applied it would mean that all Nigerians have equal opportunity for acquiring land throughout the entire country. By law, foreigners may also acquire land wherever it is located in the country. We shall consider land acquisition from States / local governments and from other holders. ACQUISITION FROM THE NIGERIAN GOVERNMENT All land in a State is vested in the State Governor who may grant rights of occupancy to any person for all purposes. A prospective land investor may therefore apply to the governor of the State where the target property is located for the grant of a right of occupancy. (Such rights of occupancy granted, by State governors, are termed 'statutory rights of occupancy.') Section 8 of the Act provides that a statutory right of occupancy shall be for a definite term. The right of occupancy is therefore in the nature of a lease over the land for a period of time, usually 99 years. The Act does not place a limit to the area of the land in respect of which a right of occupancy may be granted for building purposes. The Federal Government of Nigeria also has power to grant rights of occupancy in respect of lands comprised in the Federal Capital Territory (i.e., Abuja and its designated environs), or vested in the Federal Government but located in States' territories. Local Governments may grant 'customary rights of occupancy' where the land in question is not in an urban area. An agency of the Federal Government, as distinct from the Government itself, may also alienate its interest in any of its landed properties. The procedure involves applying formally to the particular Government, or any appropriate agency, for the issuance of a right of occupancy. The discretion whether to grant or refuse to grant this interest rests completely with the Government. When granting the right of occupancy the Governor or Local Government issues a Certificate of Occupancy in evidence of the grant. However, other documents are sometimes issued, which are nonetheless valid. ACQUISITION OF LAND FROM HOLDERS OF INTEREST UNDER THE LAND USE ACT The Land Use Act recognises two classes of holders of rights of occupancy. The first class consists of those persons, such as a prospective real estate investor, actually granted rights of occupancy by the State, Local of Federal Government, as described above. The second class consists of those who held interests in land in Nigeria before the Act came into force. By the Act, a person in this category continues to hold those interests in the land as if a right of occupancy had actually been granted to him by the Government (defined as holder of a right of occupancy 'deemed granted' under the Act). A prospective investor may acquire land from any of these classes of holders, but each case presents its own peculiarities. In the case of acquisition from the holder of a right of occupancy actually granted, the investigation of the previous holder's title to the land would normally be completed when a certificate of occupancy or other document issued by the Government is produced. In the case of acquisition from the holder of a 'deemed granted' right of occupancy, the interest of that holder will be based on one or more of the different systems of land tenure which existed and operated in Nigeria prior to the Land Use Act. Where the land was held under customary law, for instance, proof of title would not normally be by the production of a document. Even where the received English tenure system applied, the production of documents alone would not suffice as the relevant land registries would require to be searched, amongst other things; making the engagement of specialist legal assistance imperative. Once the real estate investor, or his legal practitioner, is satisfied with the current holder's title, the next step would be the preparation of an appropriate legal document transferring the title to him, or granting him a lease over the property. After the execution of this documentation, the consent of the State or Local Government to the entire transaction would be necessary, potentially constituting somewhat of a bottleneck. The process takes between one and three months, and varies from State to State. Finally, the document would be stamped and registered (Stamp duties vary according to whether the transaction is a sale or a lease.) i In total, there are over 700 local government areas in Nigeria. |