Investing in real estate is a big decision, especially when it involves a foreign country that you don’t currently live in like Nigeria.
As a US citizen, it is important to understand the land ownership laws in Nigeria to help you avoid any costly mistakes and keep your money safe.
In this blog, we will talk about Nigeria’s land ownership laws and how you can stay safe as a US citizen.
Land Use Act Overview
The foundation of Nigeria’s land ownership system is the Land Use Act of 1978. Under this act, all land in Nigeria is vested in the government, specifically in the hands of the state governors.
What this means is that, technically, no individual or company truly “owns” land in Nigeria. Instead, the government grants “rights of occupancy” for a specified period.
For investors, this is a critical distinction. You’re essentially leasing the land, not owning it outright.
However, this does not mean that you cannot own land outright.
Types of Land Ownership
There are more than two types of land ownership under Nigeria law but for this blog, we will focus on the two main types of land ownership under Nigerian law:
1. Freehold: This is the kind of ownership where you own the land outright. However, in Nigeria, freehold is extremely rare due to the Land Use Act.
It’s right to say that since the implementation of the Land Act, the Freehold type of ownership has been abolished.
However, the Land Act brought in a certificate of occupancy which allows Individuals to own lands for 99 years.
Most new investors will not encounter this type of ownership.
2. Leasehold: This is the most common form of land ownership in Nigeria today. When you purchase land, you are granted a lease for a period of up to 99 years.
This lease can be renewed upon expiration, allowing long-term use of the land.
However, under this form of land ownership, you cannot use the land as collateral for loans.
Acquiring Legal Title
A legal title is a piece of document that says “You own this land or property”.
Securing a legal title is one of the most critical steps when buying land in Nigeria.
The Certificate of Occupancy (C of O) is the primary document that proves your right to use the land.
Before purchasing, ensure the land has a valid C of O, and verify its authenticity through the relevant local government office.
While the process can be tasking, it is advisable to do so to avoid disputes or even loss of land or money.
Additionally, you should look out for multiple claims on a single piece of land. The practice of “land grabbing” or fraudulent sales is not uncommon.
Engage a reputable lawyer or real estate company to conduct thorough due diligence, including verifying the history of the land and ensuring there are no existing disputes.
Understanding Nigeria’s land ownership laws is vital for any US citizen looking to invest in the country’s real estate market.
This will help you achieve a successful investment without any legal issues.
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