Buying land or property in Nigeria can be an excellent investment. It can also become an expensive legal problem if the transaction is approached without understanding the legal framework governing land.
The Land Use Act regulates the control, management, allocation, transfer and revocation of interests in land throughout Nigeria. It also explains why terms such as Certificate of Occupancy, statutory right of occupancy, customary right of occupancy and Governor’s Consent regularly appear in Nigerian property transactions.
However, understanding the Land Use Act requires more than knowing what a C of O is. A purchaser must understand what interest the seller actually has, whether the seller can legally transfer it, whether the land is subject to government acquisition or another adverse interest, whether the proposed use is permitted, whether the title documents are genuine and what must be done after completion to perfect the buyer’s interest. This is why property due diligence in Nigeria should begin before substantial money changes hands.
This guide explains the practical implications of the Land Use Act for property buyers, investors, developers, families and Nigerians in the diaspora.
What Is the Land Use Act?
The Land Use Act came into force on 29th March 1978.
Section 1 provides that, subject to the Act, land comprised within the territory of each State is vested in the Governor of that State, to be held in trust and administered for the use and common benefit of Nigerians. The legislation also distinguishes between the management of land in urban areas and land outside urban areas. Urban land is under the control and management of the Governor, while other land is generally managed by the relevant local government, subject to the Act.
This changed the framework within which interests in land are held in Nigeria. It does not mean that private individuals have no valuable or enforceable interests in land because Nigerians still routinely buy, sell, lease, mortgage, inherit and develop property. What it means is that those interests operate within the system of rights of occupancy created or recognised by the Land Use Act.
The Governor may grant statutory rights of occupancy, while local governments may grant customary rights of occupancy in respect of qualifying non-urban land. For a property buyer, therefore, the important question is not merely: “Does the seller own the land?”
The better questions are:
“What interest does the seller hold? How did the seller acquire it? Is that interest valid? Is the seller legally entitled to transfer it? What approvals are necessary to perfect my acquisition?”
That distinction is fundamental to safe real estate investment in Nigeria.
Can A Person Own Land in Nigeria?
People commonly describe themselves as “landowners” in Nigeria, and commercially this terminology is understandable. Legally, however, the structure created by the Land Use Act is based substantially on rights of occupancy rather than an unrestricted freehold model.
The holder of a valid statutory right of occupancy enjoys significant rights against third parties. Section 14 of the Act provides that, subject to the Act and other applicable laws, the occupier has exclusive rights to the land against all persons other than the Governor.
This right can be extremely valuable as it can support residential development, commercial development, leasing, financing, succession and other transactions. However, its value depends on the validity and quality of the underlying title and this is why a buyer should never assume that possession of a document labelled “Deed of Assignment”, “C of O” or “Allocation Letter” automatically means that the transaction is safe.
The document must be examined as part of the entire root and chain of title.
What Is a Statutory Right of Occupancy?
Under section 5 of the Land Use Act, the Governor has power to grant statutory rights of occupancy to persons for various purposes. A statutory right of occupancy is one of the principal interests encountered in urban real estate transactions in Nigeria. It may be evidenced by a Certificate of Occupancy issued by the Governor.
Section 8 provides that a statutory right of occupancy granted by the Governor is for a definite term. In practice, government grants are commonly associated with terms of up to 99 years, although a purchaser should always examine the specific grant or title document rather than assume that every property has an identical tenure.
The important issue when purchasing property already subject to a statutory right of occupancy is therefore not simply whether a C of O exists. Your lawyer should establish, amongst other things:
- when the right commenced;
- the remaining tenure;
- the identity of the registered holder;
- whether the property corresponds with the survey and title records;
- whether the title contains restrictions or conditions;
- whether ground rent or other obligations are outstanding;
- whether previous transfers were properly documented and perfected;
- whether there are mortgages, charges, court orders or other encumbrances; and
- whether the seller has legal capacity to transfer the property.
These enquiries form part of proper property title verification in Nigeria.
What Is a Customary Right of Occupancy?
A customary right of occupancy generally relates to land outside designated urban areas. Under section 6 of the Land Use Act, the appropriate local government may grant customary rights of occupancy for agricultural, residential and other permitted purposes in non-urban areas. This should be distinguished from the traditional or customary history of a particular parcel of land.
Family or community ownership may still be highly relevant when investigating the root of title. However, the statutory power to grant a customary right of occupancy under the Land Use Act is vested in the relevant local government, not simply in a village chief or traditional ruler. This distinction matters considerably when conducting land verification in Nigeria.
A buyer acquiring family, ancestral or community land should investigate both the legal title and the authority of the persons purporting to sell. For example, where family land is involved, it may be necessary to establish:
- the original founder or owner of the land;
- how the property devolved;
- the current family head;
- the principal members whose participation may be required;
- whether there have been previous sales;
- whether competing branches of the family assert rights;
- whether litigation exists;
- whether the land has been acquired by government; and
- whether the particular plot falls within the land the family is legally entitled to transfer.
Paying someone merely because the person claims to be “the family representative” is not property due diligence.
What Is a Certificate of Occupancy in Nigeria?
The Certificate of Occupancy, commonly called a C of O, is one of the most frequently misunderstood documents in Nigerian real estate.
Section 9 of the Land Use Act empowers the Governor, in specified circumstances, to issue a Certificate of Occupancy as evidence of a right of occupancy. The critical words are “evidence of such right of occupancy.” A C of O should therefore be understood in the context of the interest it evidences.
It is not prudent for a buyer to see the words “Certificate of Occupancy” and immediately conclude that no further investigation is necessary. Your real estate lawyer should still verify:
- whether the C of O is genuine;
- whether it relates to the particular property being sold;
- whether the seller is the registered holder or valid successor in title;
- whether subsequent transactions have occurred;
- whether those transfers were appropriately documented;
- whether Governor’s Consent was obtained where required;
- whether a mortgage or other encumbrance has been registered;
- whether litigation affects the property;
- whether the property falls within government acquisition;
- whether the survey coordinates correspond with the actual land; and
- whether planning restrictions affect the intended development.
A title document is therefore the beginning of a due diligence investigation, not the end of one.
Does Every Landowner Need a C of O?
No. This is another important misconception about land ownership in Nigeria. The Land Use Act contains transitional provisions recognising certain interests that existed before the commencement of the Act. Sections 34 and 36 deal respectively with transitional arrangements affecting land in urban and non-urban areas.
Accordingly, the absence of a C of O does not automatically establish that a person has no title. Conversely, the production of a document described as a C of O should not automatically end the investigation because the nature of the root of title must be identified and verified.
Depending on the property, relevant documents may include:
- Certificate of Occupancy;
- Governor’s Consent;
- Deed of Assignment;
- Deed of Conveyance;
- registered title documents;
- government allocation documents;
- land certificate;
- excision documents;
- gazette;
- probate or letters of administration;
- assent;
- vesting documents;
- court judgments;
- survey plans; and
- documents evidencing previous transactions in the chain of title.
There is no responsible “one document fits all” approach to Nigerian conveyancing.
What Is Governor’s Consent and Why Does It Matter?
One of the most searched questions relating to buying property in Nigeria is:
“Do I need Governor’s Consent after buying land?”
Section 22 of the Land Use Act provides that the holder of a statutory right of occupancy granted by the Governor may not alienate the right or any part of it by assignment, mortgage, transfer of possession, sublease or otherwise without the consent of the Governor first had and obtained, subject to specific statutory exceptions.
This is the legal basis for what is commonly referred to as Governor’s Consent. For customary rights of occupancy, section 21 creates its own approval regime. Outside specified court-sale situations, the relevant approval is generally that of the appropriate local government. The precise process applicable to a transaction must therefore be determined from the nature of the title.
C of O versus Governor’s Consent
A C of O and Governor’s Consent perform different functions. A Certificate of Occupancy generally evidences a right of occupancy. Governor’s Consent, in the context of section 22 transactions, relates to the subsequent alienation of a statutory right of occupancy.
For example, if Mr A holds a property under a statutory right evidenced by a C of O and subsequently assigns his interest to Mrs B, the transfer raises the issue of Governor’s Consent. Mrs B does not simply “inherit” Mr A’s C of O as though nothing has changed. The transaction must be properly documented and, where applicable, perfected at the relevant land registry.
This is why buyers should be cautious where a seller says: “The property already has a C of O, so you do not need to do anything else.” That statement may be dangerously incomplete.
What Does Property Title Perfection Mean in Nigeria?
Another important aspect of real estate legal advisory in Nigeria is title perfection. Signing a Deed of Assignment and paying the purchase price should not necessarily be treated as the final stage of a property acquisition.
Depending on the title and transaction, perfection may involve:
- obtaining the relevant consent or approval;
- stamping the transaction instrument; and
- registering the instrument at the appropriate land registry.
The requirements, fees, administrative processes and timelines differ from jurisdiction to jurisdiction.
A competent property lawyer should therefore advise the purchaser at the beginning of the transaction about both the acquisition itself and what must happen afterwards.
Otherwise, a buyer may spend hundreds of millions of naira purchasing an asset while failing to complete the legal steps necessary to properly regularise and protect the acquired interest.
Can You Transfer or Mortgage Land Without Governor’s Consent?
Where section 22 applies, the statutory requirement for Governor’s Consent is extremely important. The Land Use Act also provides consequences for transactions undertaken contrary to its requirements, including section 26, which declares transactions or instruments purporting to confer interests otherwise than in accordance with the Act null and void.
The legal consequences of imperfect or unconsented transactions have also generated substantial Nigerian case law. From a transactional advisory perspective, however, the practical lesson is simple: Do not structure a significant acquisition, assignment, mortgage, sublease or development transaction on the assumption that required governmental consent can safely be ignored.
Your lawyer should determine the applicable consent requirements before completion and build the necessary perfection obligations into the transaction documents.
Can the Government Revoke Your Right of Occupancy?
Yes, but the power is not unlimited. Section 28 of the Land Use Act empowers the Governor to revoke a right of occupancy for overriding public interest and specifies circumstances falling within that concept. These include requirements for public purposes and certain prohibited alienations, amongst other statutory grounds. This makes government acquisition searches extremely important when conducting land due diligence.
A purchaser should not simply inspect the physical land and conclude that because houses are being built around it, the land must be safe. A physical inspection cannot establish whether land falls within an acquisition scheme, committed area, proposed infrastructure corridor or other governmental interest. The relevant searches and survey investigation must be undertaken.
Is Compensation Payable When Government Acquires Land?
Compensation under the Land Use Act is more complex than a straightforward entitlement to the full open-market value of the land. Section 29 provides, in qualifying cases, for compensation in relation to unexhausted improvements, and contains specific rules for land, buildings, installations, improvements and crops.
For investors, developers and institutional purchasers, this has significant commercial implications. Before committing substantial capital to a development, it is essential to investigate acquisition status and other government interests affecting the site. Discovering an acquisition problem after construction has commenced may fundamentally alter the economics of the investment.
Can Property Be Inherited Under the Land Use Act?
Yes. The position is more sophisticated than saying that a right of occupancy simply expires when the holder dies or that beneficiaries must apply for an entirely new right before they can inherit.
Section 24 specifically addresses devolution of rights of occupancy on death and recognises inheritance according to the applicable customary or non-customary legal regime. It also provides, amongst other matters, that a statutory right of occupancy should not be divided into two or more parts upon devolution without the Governor’s consent.
This makes property ownership an important part of estate planning in Nigeria.
A property owner should consider:
- whether there is a valid Will;
- who should inherit particular properties;
- whether a property should pass to one beneficiary or be held collectively;
- whether multiple beneficiaries owning one property could create future disputes;
- whether property is held personally or through a company or other structure;
- whether there are mortgages or other liabilities;
- whether foreign assets require separate succession planning;
- whether title documents have been perfected;
- whether the property register is up to date; and
- whether executors will easily be able to locate the title documents.
Owning valuable property without coordinating title documentation and succession planning can create avoidable difficulties for the next generation.
Why the Land Use Act Matters to Nigerians in the Diaspora
Diaspora property investment presents an additional layer of risk because the purchaser may be unable to inspect the property personally, supervise searches or monitor the transaction on the ground.
Common risks include:
- paying money before independent title verification;
- relying exclusively on a relative, agent or developer;
- purchasing from someone who does not have authority to sell;
- receiving scanned title documents without independent verification;
- buying a plot different from the one shown in the survey;
- failing to investigate government acquisition;
- purchasing family land without confirming the proper vendors;
- signing developer documents without legal review;
- failing to perfect the title after purchase; and
- leaving original title documents in the custody of inappropriate persons.
A Nigerian living in London, Toronto, Atlanta, Dubai or Johannesburg should therefore approach a property acquisition with the same level of professional discipline that would apply to any significant international investment. Physical absence should result in more due diligence, not less.
A properly structured diaspora acquisition may involve independent legal representation, survey verification, controlled payment arrangements, documentary conditions precedent, transaction reporting, secure custody of documents and post-completion title perfection.
What Due Diligence Should You Conduct Before Buying Property in Nigeria?
If you are searching for how to buy land safely in Nigeria, this is the section to pay particular attention to.
Real estate due diligence should usually go far beyond asking the seller to produce a C of O.
The precise investigation depends on the property, location, title and nature of the transaction, but a professional due diligence process may include the following.
1. Verify the Seller
Confirm who is selling the property and whether that person or entity has legal capacity to sell it.
For an individual, this may require identification and investigation of how the seller acquired title.
For a company, corporate searches may be required to confirm the company’s existence, directors, beneficial ownership, authority and relevant corporate approvals.
For an estate, probate documentation must be reviewed.
For family property, the authority of the family representatives must be investigated.
2. Establish the Root of Title
Do not examine only the seller’s immediate document.
The transaction history should be traced sufficiently to establish a defensible root and chain of title.
3. Conduct a Land Registry Search
Where applicable, an official search at the relevant land registry should confirm registered ownership and disclose registered interests or encumbrances.
4. Verify the Survey
A registered surveyor may need to confirm coordinates, boundaries and whether the land falls within government acquisition or another restricted area.
5. Investigate Physical Possession
Title documentation and possession should correspond.
A site inspection may disclose occupiers, squatters, tenants, encroachments, boundary disputes or competing claimants.
6. Check for Litigation
Where circumstances warrant it, searches should be conducted to establish whether the property or relevant parties are involved in litigation that may affect title.
7. Review Planning and Development Restrictions
A valid interest in land does not automatically mean that any proposed development is lawful.
A purchaser acquiring land for apartments, a hotel, school, factory, warehouse or commercial development should investigate planning, zoning, building approval and development control requirements before concluding the acquisition.
8. Review the Transaction Documents
Your lawyer should review or prepare the appropriate documents rather than relying exclusively on the seller’s or developer’s standard documentation.
These may include:
- contract of sale;
- deed of assignment;
- sublease;
- lease;
- development agreement;
- joint venture agreement;
- escrow arrangement;
- mortgage documentation;
- power of attorney; and
- completion documentation.
9. Structure Payment Properly
A sophisticated property transaction should link payment to clearly defined milestones and conditions.
Where title, regulatory approvals or completion obligations remain outstanding, it may be inappropriate to pay the entire consideration without adequate protection.
10. Perfect the Buyer’s Title
Completion should include a clear plan for the applicable consent, stamping and registration processes.
Why a Property Buyer Should Engage an Independent Real Estate Lawyer
A recurring mistake in Nigerian property transactions is allowing the estate agent, developer or seller to control every aspect of the transaction. An estate agent may be extremely useful in identifying opportunities and negotiating commercial terms. That is not the same function as independent legal representation. Your property lawyer in Nigeria should represent your interests.
The lawyer’s responsibility is not simply to “prepare a Deed of Assignment”.
For a significant transaction, proper real estate transaction advisory should include:
- transaction structuring;
- seller verification;
- title investigation;
- review of surveys and searches;
- identification of legal and regulatory risks;
- negotiation of warranties and indemnities;
- drafting or reviewing transaction documents;
- advising on payment protections;
- identifying conditions precedent;
- coordinating surveyors and other specialists;
- advising on perfection;
- supervising completion; and
- documenting outstanding post-completion obligations.
The commercial objective is not simply to complete a purchase.
It is to acquire an asset that the purchaser can confidently occupy, develop, finance, lease, transfer, inherit or sell in future.
Common Red Flags When Buying Land in Nigeria
Exercise caution where:
- the seller refuses to provide original title documents for inspection;
- you are pressured to make immediate payment before searches;
- the price is substantially below market value without a credible explanation;
- the seller says a lawyer is unnecessary;
- different names appear across the title documents without explanation;
- the property boundaries are unclear;
- the survey cannot be properly verified;
- possession is disputed;
- several people claim authority to sell family land;
- a C of O or Governor’s Consent cannot be independently verified;
- the developer refuses to disclose the underlying title;
- previous transfers in the chain were not perfected;
- the seller refuses to permit independent searches;
- the property is subject to an unexplained mortgage or charge;
- litigation is pending;
- the proposed development appears inconsistent with planning restrictions; or
- the seller insists that perfection “does not matter”.
One serious red flag may justify postponing completion until satisfactory evidence is produced.
Several unresolved red flags may justify walking away from the transaction entirely.
Frequently Asked Questions About the Land Use Act and Buying Property in Nigeria
Can I buy land in Nigeria without a C of O?
Potentially, yes. Not every valid interest in land is evidenced by a C of O. The important question is the nature and validity of the seller’s root of title and whether the interest being sold can legally be transferred.
Does a C of O prove that a property is safe to buy?
Not by itself.
The document must be authenticated and the entire transaction history, survey, encumbrances, acquisition status and seller’s authority investigated.
Is a Deed of Assignment enough to prove ownership?
Not necessarily.
A Deed of Assignment records a transfer between parties, but its legal value depends upon the assignor having a valid interest to transfer and upon compliance with applicable consent, stamping and registration requirements.
What is Governor’s Consent?
Governor’s Consent is the approval required under section 22 of the Land Use Act for specified alienations of statutory rights of occupancy granted by the Governor.
What is the difference between a C of O and Governor’s Consent?
A C of O generally evidences a right of occupancy. Governor’s Consent relates to approval of certain subsequent transfers or dealings with a statutory right of occupancy.
Can government revoke a C of O?
A right of occupancy may be revoked in circumstances permitted by the Land Use Act, including overriding public interest. Statutory requirements relating to revocation and notice must, however, be considered.
Should I pay for property before conducting a search?
As a general risk-management principle, substantial payment should not be made merely on the strength of the seller’s representations.
The appropriate searches and due diligence should first be undertaken and the payment structure should reflect the risk profile of the transaction.
How do I verify land title in Lagos or elsewhere in Nigeria?
The exact process depends on the title and State concerned. It may involve land registry searches, survey investigation, government acquisition checks, corporate or probate searches, physical inspection and verification of the chain of title.
I live abroad. Can a lawyer handle my Nigerian property purchase remotely?
Yes. A properly structured transaction can be managed remotely with appropriate identification procedures, legal documentation, searches, professional reporting, controlled payment arrangements and post-completion perfection.
The critical point is to appoint your own independent advisers rather than relying exclusively on the seller, developer or agent.
The Land Use Act Is Only the Beginning of Property Due Diligence
The Land Use Act remains foundational to understanding land ownership and real estate transactions in Nigeria, but it is not the only law or regulatory framework that may affect a transaction.
Depending on the property and State involved, a buyer may also need to consider:
- State land registration legislation;
- planning and development laws;
- physical planning regulations;
- stamp duties;
- taxation;
- probate and succession law;
- company law;
- mortgage and security laws;
- environmental requirements;
- building regulations;
- tenancy legislation; and
- anti-money laundering and transaction compliance requirements.
The practical question in a real estate transaction is therefore rarely: “Does this property have a C of O?”
The more important question is:
“After investigating the title, the seller, the land, the transaction history, the intended use and the regulatory position, is this property legally and commercially safe for this particular buyer to acquire?”
That is the question proper real estate transaction advisory should answer.
Buying Property in Nigeria? Protect the Investment Before You Pay
Property transactions frequently involve substantial capital and long-term financial consequences. Legal problems discovered before payment can often be managed, renegotiated or avoided. Problems discovered after the purchase price has been paid may become significantly more difficult and expensive to resolve.
At Black Oak Legal, we advise individuals, families, corporate organisations, developers, investors and Nigerians in the diaspora on real estate acquisitions and property transactions in Nigeria.
Our real estate advisory services include:
- property and land title verification;
- real estate legal due diligence;
- review of C of O, Governor’s Consent and other title documents;
- property acquisition advisory;
- sale and purchase transactions;
- drafting and review of Deeds of Assignment and other conveyancing documents;
- developer and off-plan property transactions;
- lease and commercial property advisory;
- transaction structuring;
- title perfection and registration;
- diaspora property acquisition support;
- property holding and estate planning advice; and
- strategic legal advisory for high-value real estate transactions.
If you are considering buying, selling, developing, financing or investing in property in Nigeria, obtain independent legal advice before committing substantial funds.
Contact Black Oak Legal:
Telephone: +234 915 432 8989
Email: info@theblackoaklegal.com
Disclaimer: The information provided in this blog post is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and reliability of the content, we make no representations or warranties, express or implied, about the completeness, accuracy, or suitability of the information contained herein. Any reliance you place on such information is strictly at your own risk.
Readers are advised to consult with a qualified legal professional for personalised advice tailored to their specific circumstances. We disclaim any liability for any loss or damage incurred as a result of the use of, or reliance on, the information provided in this blog post.
Please note that laws and regulations regarding real estate transactions may vary by jurisdiction and are subject to change. It is essential to stay informed about the latest legal requirements and consult with professionals when engaging in real estate activities.
