Introduction

Investing in Nigeria’s real estate market has become a great opportunity for US investors seeking to diversify their portfolios. 

However, navigating land ownership in Nigeria requires a deep understanding of how the country’s land laws work. 

With unusual laws governing property ownership, it’s important for foreign investors, particularly US citizens, to be mindful of the key rules that apply when purchasing or leasing land. 

This blog post will cover the most important land laws US investors need to know to ensure a smooth investment process in Nigeria.

Ownership of Land by Foreigners in Nigeria

Foreigners, including US investors, are allowed to own land in Nigeria, but there are limitations. Under Nigerian law, foreign investors can only acquire land on a leasehold basis rather than outright ownership, commonly referred to as freehold. 

This means that land ownership is typically granted for a specific period, after which it may be renewed or reverted to the government (the government takes back the land). 

Additionally, foreign investors must work with local laws that vary from state to state, making it necessary to work with local experts who understand these laws.

The Land Use Act of 1978

One of the most important laws governing land ownership in Nigeria is the Land Use Act of 1978. 

Simply put, the law says full control of all land in Nigeria is under the government, with state governors holding the authority to give land for private and public use. 

The Act was designed to prevent land speculation and ensure that land is shared fairly.

For foreign investors, this means that the government holds ultimate control of the land. 

You can lease land for a period (typically 99 years) but cannot own it outright. 

Understanding this law is very critical to navigating land transactions in Nigeria as a US investor.

Certificate of Occupancy (C of O)

A Certificate of Occupancy (C of O) is one of the most vital documents US investors or real estate investors need when acquiring land in Nigeria. 

This document is normally issued by the state government and provides proof that you are legally occupying and using the land for a specified period.

Without a valid C of O, your land investment could be at risk, as the absence of this document means there is no formal recognition of your rights to the land. 

Simply put, your rights to any land can be questioned without a valid C of O.

While getting a C of O can be time-consuming, it is important as it secures the legitimacy of your ownership. 

It is important to work with local professionals to navigate the bureaucratic process and obtain this certificate.

Governor’s Consent

Foreign real estate investors must understand that there is a need for Governor’s Consent in land transactions. 

According to Nigerian law, any transfer of land rights must be approved by the state governor. 

This requirement ensures that all land transactions are transparent and recorded at the state level.

For foreign real estate investors, getting the governor’s consent is crucial when purchasing land from an existing owner. 

Without this approval, the transaction could be considered invalid, leading to potential disputes in the future. 

Securing this consent should be a priority in any land acquisition process in Nigeria.

Leases vs. Freehold

In Nigeria, land ownership is generally classified into leasehold and freehold. 

However, under the Land Use Act, freehold ownership is not available to foreigners, including US investors. 

Instead, they can hold land on a leasehold basis. 

A leasehold grants you the right to use the land for a specified period, typically 99 years. 

During this time, you can use the land for residential, commercial, or agricultural purposes, depending on the terms of the lease. 

While this may seem limiting, a leasehold can be renewed, providing long-term security for your investment.

Understanding the distinctions between leasehold and freehold is essential for making informed decisions about property in Nigeria.

Due Diligence for Land Acquisition

Carrying out proper due diligence is critical for any land investment in Nigeria, especially for foreign investors unfamiliar with local regulations. 

Before acquiring land, US investors should:

• Verify the land’s title to ensure there are no competing claims.
• Confirm that the land is not subject to government acquisition.
• Obtain a land survey to clearly define the boundaries.
• Ensure that the land is zoned for the intended purpose (residential, commercial, or industrial).

When you fail to conduct thorough due diligence, it can lead to costly legal battles or loss of investment. 

Having a local lawyer and real estate expert can help mitigate these risks and ensure that the transaction proceeds smoothly.

There is also an option of reaching out to a reputable real estate agency to handle all the hard work for you.

Dispute Resolution Mechanisms

Land disputes are not uncommon in Nigeria, particularly when it comes to ownership rights and boundaries. 

To protect your investment, it’s essential to understand the dispute resolution mechanisms available. 

The Nigerian legal system provides several ways for resolving land-related disputes, including:

• Land courts that specialize in property issues.
• Alternative Dispute Resolution (ADR) methods such as arbitration and mediation, which can be faster and less costly than going to court.

Being proactive in addressing potential conflicts is crucial to maintaining control over your investment.

Conclusion

The Nigerian land laws can be a bit confusing especially for foreign real estate investors that reside in the US, but understanding the essential legal frameworks is important for US investors looking to invest in the country’s real estate market. 

From the Land Use Act to obtaining a Certificate of Occupancy and Governor’s Consent, following these laws ensures that your investment is protected. 

At GZ Realty, the safety of your investment means a lot to us. We work with experts at every level to conduct the due diligence and other verifications needed to ensure your property is safe.

Ready to take the next step in your investment journey? We specialize in connecting US citizens and African Americans with prime real estate opportunities in Nigeria. Whether you’re looking to invest in residential properties, commercial spaces, or land, we’ve got the expertise and local knowledge to help you make the most of the booming Nigerian market.

Explore the potential of Nigerian real estate with GZ Realty, and discover how we can help you diversify your portfolio with confidence.

Learn more about our services and start your investment today!