Navigating the house-buying process: Land Title and importance of title search in the buying process—— February 13, 2020
“The best investment on earth is earth” – Louis Glickman
In the March edition of our blog, we gave some tips to owning your dream home in Nigeria and promised to talk more about “Land Title” and the importance of title search in the whole home purchase process.
The relationship between land and human kind is a very important aspect to life and has been a source of so many disputes all over the world. In land transactions, title is everything as it defines the owner’s bundle of rights in a piece of property that can be held, confide or transferred by one to another. We presume at this point you are wondering, how important is a proper title search?
Here is a narrative. Mr. Femi has saved up to build his dream home. He searches and finds a very good offer for a plot of land in his location of choice and within his budget. So happy that the criteria he set before he embarked on the house purchase expedition have been met, Mr. Femi approaches the property developer/seller. At the point of purchase of the plot of land, he asks the developer for the type of title that covers the property and if there are any outstanding debts he should know about.
The developer/seller assures him that there are no outstanding debts and the title has no issues. Based on the words of the seller, the transaction is closed. Mr. Femi is given his payment receipt and survey that covers his parcel of land, and walk away with a smile. Three year down the lane, after he had built his dream home, he gets served a notice for re-possession of the land from another party with an authentic title that covers same parcel of land. Mr. Femi gets into a legal battle and stands the risk of losing his dream home. What will be the result of the legal battle?
Mr. Femi is at risk of losing everything including the home of his dreams. What did Mr. Femi do wrong? – He did not conduct a proper title search before proceeding with the transaction. Once the price feels right and the location fits, people jump into the land/property transactions, ignorant of the possible consequences. Some come out bruised, very few come out unscathed.
The truth is we have so many Mr. Femi out there. Navigating the house-buying process is not as easy and not as hard as many might think. You just need the right information to guide you every step in the process so as to mitigate against possible loss of investment.
What does a title search tell a buyer? A title search tells the prospective buyer whether the seller/developer has the legal right to sell the property in question; that is, if the seller/developer has the legal right to transfer the interest in such property to another. It also informs the buyer of any encumbrance on the real estate i.e is it subject to government etc. It is this simple; an encumbered property title normally is a sign of a storm in the nearest future. In real estate transactions, the onus is on the buyer to ask all the necessary questions and some can only be answered when the result of the title search is received. The law advices buyers to beware – “Caveat Emptor”
How long should a title search take? Different states have their own level of bottlenecks. In Lagos, the title search should not take more than a week. However, the timeline for conducting a title search can change considerably as it is also dependent on quite a lot of administrative and bureaucratic factors, which are beyond the control of the person applying to conduct the search.
What happens where a buyer after purchase discovers there is an encumbrance? Often times the buyer might have the option of ratification of title “Making good the title”. However, in case whereby the seller never had an authentic right to be transferred to another and such rights resides in another and such a person, group or institution is not willing to ratify, the buyer loses everything, even the structure. “Quic Quid Plantatur Solo Solo Cedit” – whatever is affixed to land becomes part of it, as mentioned in one of our earlier blogs, is one maxim buyers must have at the back of their minds when making that decision to buy. However, where possible, the buyer could approach the legitimate owner and renegotiate a fresh purchase of the land.
What is a good title to have over land? One question quite a few potential buyers of real estate ask is, “what title can be considered a good title over land”? Here is our answer, a registered Deed of Assignment or Conveyance or Lease or Sub-lease with the Governor’s consent affixed is a good title. Potential buyers should, however, ensure that this registered title is not wrongfully or fraudulently obtained as a third party can try to establish a Law suit where this is the case.
Remember, there is no ignorance in law so we need to equip ourselves with the right knowledge. Ensure you do a proper title search before you conclude on that land transaction and that such a search is done by a professional, preferably a legal practitioner. Do not sell yourself short by engaging the wrong help. Also, another means of confirming title and ensuring that the land is not under government acquisition is to conduct a search at the Surveyor General’s office to ensure the red copy of the Survey to the land is lodged with the Surveyor General’s office.
Kindly follow this space as we seek to share more information that will help you make informed decisions as regards real estate transactions. In our subsequent blog, we will try to define, in the simplest form, some legal terminologies used in real estate transactions/title search and also touch on the land title as regards buying family land.
Written by Babajide Aloba; Reviewed by Oserogho & Associates