CHUDI S. UBOSI, BSC (Estate Management), MSC (Construction Management is a renowned professional. He is of UBOSI ELEH & CO, a reputable firm of Estate Surveyor & Valuers. He is a fellow of the Nigerian Institute of Estate Surveyors & Valuers (NIESV) and a member of the International Real Estate Federation (FIABCI). He has over 20 years working experience in the real estate consultancy sector
A land/property title document is basically a document that vests ownership of some sort in real estate and is used in transferring interests in real estate from one person to another. It is understood that real estate is immoveable so when a transaction takes place concerning real estate it is actually the interests in the property that is exchanged. This "interest" is what is covered by a title document. According to Olusegun Kuye – Procedure for the sale of landed properties – "a good title must be a registerable and recognized document in law and must possess the capacity of being a transferrable instrument of interest in landed property"
In the days of our fore fathers, purchase of real estate – most often land – was quite simple. Land ownership was rarely vested in an individual – usually families or communities. If an interest in purchasing part or a whole of a land was expressed, an acceptance to sell by the vendor (family or community) was made, followed by negotiations and subsequently an acceptance from the purchaser to buy. The character of the purchaser was investigated before payments in cash or in kind i.e. gifts like hot drinks and kola nuts were exchanged. The final step was the physical handing over of possession to the new purchaser. This entire process always involved the head and principal members of the vendor’s family or community. No documentation was involved or required.
However, same cannot be said of real estate transaction today, especially as cities developed get more urban, with competing interests, complex relationships and the need to clearly delineate boundaries from a personal to national and international levels. The need for proper titles to real estate cannot therefore be over emphasized. In Nigeria today there are different land titles / interests in land and they are briefly examined below.
The freehold interest (or fee simple absolute in possession) is a superior interest in land as its is perpetual, i.e for an endless period of time. The owner of such an interest has the right to occupy, enjoy dispose of his property should he so wish, but of course subject to government and planning limitations. This type of interest dates back to pre the Land Use Act of 1978. The Act effectively put an end to freehold interests as it vested ownership of all land in the Federal and State Governments, who were now at liberty to grant interests of up to 99 years to interested persons.
A leasehold interest is usually referred to as a term certain or term of years absolute in possession. This kind of interest is usually created for a specific period of time such as a weekly, monthly, annually or a definite number of years. It gives the leaseholder (lessee or tenant) the right to occupy and enjoy the property over that period of time. A rent or certain sum of money is usually paid to the Landlord for the benefit of the use of the property. At the end of the lease, the Landlord will be entitled to the property free of all encumbrances – basically called the reversionary interest. This leasehold applies to (as mentioned earlier) to even a tenants 2 years interest for residing in a property, as well as the 99 years interest granted a lessee over a property by a Governor of the State. In most leasehold interests there is an option to renew or extend the leases by applying to the Head leasse. With the advent of the Land Use Act 1978 the grant of lease by a State Governor for any period of time entitled one to a Certificate of Occupancy as evidence of right over the property. For a short lease, residential commercial or others of that nature, a simple tenancy agreement would usually suffice. This is signed by parties to the contract.
It is a known fact that less than 10% of the Nigerian land mass is titled and despite the Land Use Act, a lot of people still exercise ownership over land. Their root of title is family, community ownership, and or long time settlement. Where an interest is acquired in land of this nature, the vesting document is usually a family or community purchase receipt – which should pre date the Land Use Act of 1978. With this purchase receipt the purchaser can then apply to the State Government for a Certificate of Occupancy.
When a vendor (assignor) transfers all his rights in a property to a purchaser (assignee) it is usually for the full residue of his interest or term. The assignee is thus responsible to the Freeholder or Headlessee for satisfying conditions imposed in the original lease. This explains why when a transactions occurs on a property covered by a Certificate of Occupancy, the transfer documents are regarded as a "Deed of Assignment"
5.Letter of Allocation.
In numerous developments undertaken by the various state governments or in partnership with them, the vesting document is usually a Letter of Allocation signed by the Authorities. This Letter of Allocation contains the address and description of the property as well as the name of the allottee. A file is usually opened and retained where searches can be made as well as details and all payments made on the property can be updated. For transfer purposes this letter of allocation is usually an acceptable vesting document.
6.Judgment of the Court. There have been instances where ownership of a property is disputed up to the Supreme Court and when judgment delivered, it is against the party in whom the original title was vested vide a Certificate of Occupancy or other, registered title. In cases such as this the new owner can use the court judgment as his title to the property and indeed effect a sale. On the other hand, the court judgment can be used as a basis to apply to the State Government for a Certificate of Occupancy.
7.Power of Attorney. The powers granted when an individual (donor) grants another (donee) an Attorney over his / her property may include the power of sale. This Power of Attorney, once it is properly registered vests upon the done the powers to transact on the property including transferring title and receiving consideration thereof.
The foregoing are some of the common forms of interests in real estate in Nigeria today. The most important point however, is that once these transactions are concluded, the purchaser must seek the consent of the State Governor for his / her title to be recognized as required by the Land Use Act of 1978.