Property and Transactions
The definition of property can be approached from different legal perspectives. It is either regarded as real or personal or any estate or interest in any property, debt and other choses in action. It can also be described as a building or any other thing attached to the earth or permanently fastened to anything so attached. From yet another angle, it can be seen as that intangible thing that confers a right on a person either as to ownership, possession or other legal rights in an item. For the purpose of this paper, property is either real or personal. Real property is land and anything growing on, attached to or erected on it, excluding anything that may be severed without injury to the land.
Property in Land can be at different levels from the above definitions of property. This is dependent on the various transactions that are executed on such a land. Accordingly, a land could be inter alia mortgaged, charged, leased, inherited, vested or purchased. At the various transactions, the parties involved have different interests in the property and may alienate or acquire same. Investment in land could take any of the above forms of transactions, all of which are governed by applicable laws depending on the jurisdiction within which the land is situate. The following are some of the applicable laws to land transactions applicable to Lagos State:
1. The Constitution of the Federal Republic of Nigeria 1999 (as amended)
2. The Land Use Act (CAP L5, Laws of the Federation of Nigeria 2004)
3. The Mortgage and Property Law of Lagos State 2010
4. Company Income Tax Act 2011
5. Administration of Estates Law of Lagos 2009
6. Lagos Tenancy Law 2011
7. Companies and Allied Matters Act (CAP C20 Laws of the Federation of Nigeria 2004)
8. Stamp Duties Act (CAP S8 Laws of the Federation of Nigeria 2004)
9. High Court (Civil Procedure) Rules of Lagos State (2012)
These laws provide for the methods and procedures involved in acquiring, management and disposition of property. Having established the legal framework of real property it will be important to discuss the process of acquiring title to land and relate same to the Eko Atlantic project.
Stages of Conveyancing
It is common knowledge in legal and finance circles that the value of land appreciates and therefore remains one of the best choices in investment demands. It is thus important to understand the process of acquisition of real property. The process of alienation and acquiring title to land is what is generally referred to as Conveyancing, which is of old English etymology. It involves as tripartite compact process of thorough verifications on the part of the acquirer (buyer, mortgagee, chargee) in order that proper title is passed. This is because of the duty of law imposed on him in the maxim caveat emptor (buyer beware). This principle connotes generally that defective title passed is at the detriment of a negligent buyer who ought to have reasonably investigated title before purchasing. On the test of reasonability and constructive notice, a plethora of cases have visited the courts and have maintained long period of litigation for defective title. This demonstrates the need for such process to be efficiently executed and completed by competent hands. Hence, the need for solicitors to carry out proper search and produce reports and advisories to parties who intend to acquire property.
The contract stage is the next stage, which involves the usual drafting of terms of agreement by the parties involved in order to define liabilities, rights and amounts of interest to be alienated and acquired by the parties. Such contract is usually by deed as dictated by the law and must be followed with the consent of the Governor, who holds all land in the state as the allordial owner and in trust. The requirement to be by deed is non-negotiable; as such a transfer of interest takes it into public domain and therefore requires registration. This contract stage also requires high level of care especially with mortgage contracts which are usually most complex. The terms, should not just be blanket, but provide specifically the intents of the parties. Such covenants like covenant to insure, repair, consolidate, repayment of principal and interest, covenant to sublease, assign or let, covenant to restrict equity of redemption, dispute settlement, amongst others must be properly worded in order not to encourage unnecessary litigation in future.
The final stage is that of perfection of the process. This means the registration of the transaction at the Land Registry. It starts with the application of the consent of the Governor, then payment of stamp duties, which is quantified ad valorem or at a flat rate depending on the area where the land is situate, after which the deed is registered for public records. In the case of a sale, title certificate (certificate of occupancy) can then be applied for, which remains a valid document in proof of the title held by the owner.
The Eko Atlantic
Off the coast of Lagos is a massive real estate investment project carried on by the Lagos State government. Eko Atlantic is the exciting new city being built adjacent to Victoria Island, in Lagos by South Energyx Nigeria Limited, the developers and planners of the project. The aim is to reclaim about 10million square meters of land from the Atlantic Ocean and create a new city therein with prime state-of-the-art assets and self-sustainable system. It also promises to not just be a city for living and working of tasteful Nigerians, but also a haven of investment and tourism by foreigners. This it intends to achieve by the match-making of the state’s surging population and high property demand. Already, construction has begun; infrastructures have started setting up to fit into the master plan already commissioned. The state’s new financial headquarters, shopping malls, hospitals, schools, corporate headquarters are some of the highlights of structures to look out for at the Eko Atlantic City.
Eko Atlantic is spacious city with an efficient road network and landscaped waterways for both recreational and inner city transport use. The road and infrastructure works are already under construction.
Of course, the legal regime never changes. The same laws applicable to land management are still applicable. The process of convenyancing will remain the same. However here are some peculiarities to note about property at Eko Atlantic:
Eko Atlantic will have its own independently generated power supply, effective facilities for clean water distribution, sewage collection and treatment, as well as a state of the art communication system through a fibre optic network. Investors should thus watch out for contractual agreements that would include these premium services and charges also: be it a leasehold or sale.
As an investment opportunity, Eko Atlantic is already meeting expectations by providing space for developers to build new shopping malls, hotels, apartments, offices, schools and places of worship. Construction of the first developments has already begun in Eko Atlantic. Construction companies and investors would also need to be vast in the knowledge of construction contracts.
Being that the land is still being reclaimed from the Atlantic, millions of square meters are available and plots of land are available for sale. However, there is a minimum plot size that can be acquired. This minimum is 3,500 m2. Plots of lands are sold per square meter and the prices per square metre are dependent on the location of the plot for sale, which are as follows:
1. Inner city plots
2. Plots along major roadways
3. Canal front plots
4. Ocean front plots
The nature of alienation is quite distinct as what exists is a Concession Agreement between the Lagos State Government and South Energyx Nigeria Limited, which was signed in 2006 regarding the acquisition of land in the Eko Atlantic City. Lands would therefore be acquired from South Energyx.
The payment plan is as determined in accordance with this Concession Agreement signed with the Lagos State Government. It is stipulated that the proposed purchaser pays 5% of the purchase price to Lagos State Government for the Deed of the Assignment and pays a separate 5% of the purchase price to the Lagos State Government as Land Charges.