Did you conduct Proper research before buying your property? How sure are you that your Agent, surveyor, or lawyer has given you the right information about the property you are about to acquire? Many investors have asked me this question, and I'm going to answer it in this post.
One of the best ways to conduct due diligence is to carry it out by yourself. That way, you get to see it all and make all your findings by yourself because Property investment can be tremendously risky. There are other effective ways you can investigate a property before buying, and we will find out in this post.
Conducting due diligence on the title to the property and the capacity of the seller to alienate the interests is the discretion of the purchaser. It is a necessary process to be carried out for the buyer's protection. It is usual in the transfer of title process for the buyer to instruct a solicitor to conduct due diligence to ascertain the title and interests in the real property. Other things you can discover are the land use and zoning purpose, external or third-party interests, residue, or the term of years, and the status and capacity of the seller.
Before buying land in Nigeria, your preliminary meeting with the landowner (vendor) should enable you to inquire into the nature of the vendor's title to the land. For example, whether the land was inherited, purchased, gifted, assented to, mortgaged, leased, or acquired by the vendor by virtue of long possession. You will have to conduct a physical inspection at the site of the land or building to reveal encumbrances, easements, restrictive covenants, or constructive notices. At this preliminary stage, you can reach an informal agreement with the vendor on the fair purchase price of the building or land and on the mode of payment.
Where an informal agreement is reached, you have to immediately engage the services of a real estate solicitor to help you avoid costly errors and future troubles which are common with land transactions and could place your interest in the land at jeopardy.
Land transactions require extensive investigation. To enable your Solicitor to investigate the title of the vendor on your behalf. He or the vendor's solicitor will draw up a Contract of Sale Agreement for you and the vendor to sign. After that, you will make a deposit of the purchase price of the land pending the successful outcome of the investigation of the vendor's title by your solicitor. Without a Contract of Sale Agreement, the Vendor has no obligation to prove that he has a good title to the land. By this obligation, the vendor is bound to put forward his title documents and evidence of the root of the title in the land and trace the unbroken chain of transactions to himself.
Your solicitor will proceed to conduct a search and investigation based on the title documents presented by the vendor. The documents depending on the nature of the vendor's title may include Deed of Conveyance; Deed of Legal Mortgage; Deed of Surrender; Deed of Gift; Assent; Certificate of Occupancy; Deed of Assignment; Lease Agreement; Power of Attorney; Declaration of Trust; Survey Plan; Certified True Copy of Court judgment; Vesting Order; etc.
The investigation and title search may be conducted at the Locus, Lands Registry, Probate Registry, Law Court, Corporate Affairs Commission (CAC), the city planning authority such as FCDA, LASPPPA, UCCDA, Economic and Financial Crimes Commission (EFCC), Independent and Corrupt Practices Commission (ICPC), etc. Real property may be a proceed of crime or a subject of investigation for fraud and money laundering. This may warrant your solicitor to carry out due diligence at any anti-graft agency.
Your solicitor's investigation will reveal the status of the land and any encumbrances or potential problems associated with it.
Your solicitor will render a legal opinion in writing advising you on any of the issues affecting the land and whether you should proceed to close the transaction.
POST SOURCE: Lex Artifex Before buying a land in Nigeria http://www.lexartifexllp.com/before-buying-land-in-nigeria/