The process of purchasing land in Nigeria is a complex and legally intricate process that requires careful attention to detail to ensure a smooth transaction. A land purchase agreement, also known as a sale agreement or contract of sale, is a vital document that outlines the terms and conditions under which land is sold.  In this article we will elaborate the content of a land purchase agreement in Nigeria and procedure for sealing a land deal in Nigeria.

Key Components of a Land Purchase Agreement

A well-drafted land purchase agreement should contain several essential elements to be legally binding and protect the interests of both parties:

1. Parties to the Agreement: The agreement must clearly identify the parties involved – the seller or vendor and the buyer or purchaser. This includes full names and addresses.
2. Recitals: This part is necessary. It provides a brief and concise history of the title of the land and how it has been exchanging hands from the first owner to the present seller.
3. Description of the Property: A detailed description of the land being sold is critical. This should include the location, size, boundaries, pillar numbers and any notable features. A survey plan or map may be attached to provide a visual representation of the property. The name the land is specifically called should be included.
4. Purchase Price and Payment Terms: The agreement should specify the agreed purchase price and the payment structure. This includes the initial deposit, subsequent payments, and the timeline for completing the transaction. Details of the payment method (e.g., bank transfer, cheque) should also be outlined.
5. Conditions Precedent: Conditions precedent are specific requirements that must be fulfilled before the agreement becomes binding. These may include obtaining any necessary approvals from relevant authorities, conducting due diligence, and verifying the title of the property.
6. Representations and Warranties: The seller usually makes representations and warranties regarding the property’s title, absence of encumbrances, and compliance with planning regulations. The buyer may also provide warranties regarding their ability to purchase the property.
7. Covenants: Covenants are promises or undertakings by the parties. Common covenants include the seller’s obligation to transfer a good and marketable title and the buyer’s commitment to pay the purchase price as agreed.
8. Title and Title Documents: The agreement should outline the nature of the title being transferred (e.g., statutory right of occupancy, customary right of occupancy) and list the documents evidencing the title, such as the Certificate of Occupancy, Deed of Assignment, and Governor’s Consent.
9. Completion and Possession: The agreement should specify the completion date, which is when the final payment is made and the property is formally transferred to the buyer. It should also detail the date when the buyer takes possession of the property. This is only applicable if the buyer made installment payment.
10. Indemnity: Indemnity clauses protect the parties from losses arising from breaches of the agreement. The buyer may also require the seller to maintain insurance coverage on the property until the transfer is complete. This insurance is hardly obtainable in Nigeria.

Due Diligence in Land Transactions

Due diligence is a crucial step in land transactions to verify the property’s title, confirm the seller’s authority to sell, and ensure there are no legal encumbrances. This process typically involves:

• Title Search: Conducting a title search at the land registry of the in which the land is situate to confirm the seller’s ownership and check for any existing encumbrances or disputes.
• Survey Plan Verification: Ensuring that the survey plan accurately represents the property and is registered with the Surveyor General’s office in the State where the land is situated.
• Governor’s Consent: Obtaining the Governor’s Consent, as required by the Land Use Act, for the transfer of land. This governor’s consent is mostly prevalent in Lagos State Nigeria.
• Verification of Planning Regulations or Building Approval: Confirming that the property complies with physical planning laws and that there are no restrictions on its intended use.

Best Practices for Drafting and Executing a Land Purchase Agreement

To ensure a smooth and legally compliant land purchase transaction, the following best practices should be observed:

1. Engage Legal and Professional Experts: Both parties should engage experienced legal practitioners and surveyors to assist in drafting, reviewing, and executing the agreement. Legal professionals can provide valuable advice on compliance with relevant laws and regulations.
2. Transparent Negotiation: Open and transparent negotiation between the buyer and seller can help clarify expectations and prevent misunderstandings. All terms and conditions should be mutually agreed upon and clearly documented.
3. Comprehensive Documentation: Ensure that all necessary documents, including title documents, survey plans, and receipts, are accurately prepared and appended to the agreement. This helps establish a clear record of the transaction.
4. Monitor Compliance with Payment Terms: The buyer should ensure timely payments according to the agreed schedule, and the seller should promptly acknowledge receipt of payments to avoid disputes.
5. Obtain Necessary Approvals: After finalizing the agreement, obtain all necessary approvals, such as the Governor’s Consent and any other regulatory clearances, to avoid legal complications in future.

In conclusion, land purchase agreement is an important document in Nigeria’s real estate transaction process. It outlines the rights and obligations of the parties involved and serves as a legal safeguard to ensure the smooth transfer of property. As an investor desirous of investing in Real Estate in Nigeria, please ensure your purchase agreement contains all these details and most importantly work with professionals to avoid some of the pitfalls associated with land buying in Nigeria.

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