Tuesday, February 2, 2021

10 ESSENTIAL WEALTH CREATION PRINCIPLES

Essential Wealth Creation Principles

There are many strategies, philosophies and ideas on investing. These are the essential fundamental principles of wealth creation. Every investment strategy has a unique hook which appeals to the investor. Some strategies have more merit than others. Then there are the ones that are unrealistic for the average investor.

 You can try as hard as you like you’ll never come close to the great man’s returns. Well not unless you own several insurance companies. He uses the premium income from his insurance companies to give interest free loans to his portfolio.  This boosts his returns and gives him a massage advantage over any of us. Everyone can learn from him even if we can’t invest like him. In fact these wealth creation principles are completely inline with his philosophies.

 We also question whether day trading any asset is practical for the average investor. We know many people who have been on currency, options, futures and share day trading courses. No one was trading 12 months after they had been on the respective courses, suggesting it wasn’t working.

 Anyway, enough of that, we’re not here do an assassination job on get rich quick schemes, that’s fuel for another post. What we do want to do is to look at fundamental principles for creating wealth.

 So, let’s start to look at the 10 essential wealth creation principles for everyone:

 Dump The Debt!

Generally debt isn’t good when it comes to wealth creation as a whole. It will cause wealth depletion if you’re not careful and makes investment pointless. So using your capital to clear as much debt as possible will yield benefits later.

 Though at this point we need to say that not all debt is equal. It would be crazy to say to someone that they shouldn’t be investing because they have a mortgage.

 Property investors very rarely factor in the cost of debt when working out their returns. There’s also a common adage that as long as you make more than it costs to borrow debt is fine. Unfortunately this is easier said than done. Investment growth isn’t uniform, in fact it is completely lumpy and comes in fits and starts. Interest on debt is very uniform and keeps coming regardless of market conditions. Also interest on debt never turns negative. Yet investment returns on any asset will at some point move into the red.

 You can try as hard as you like you’ll never come close to the great man’s returns. Well not unless you own several insurance companies. He uses the premium income from his insurance companies to give interest free loans to his portfolio.  This boosts his returns and gives him a massage advantage over any of us.



Everyone can learn from him even if we can’t invest like him. In fact these wealth creation principles are completely inline with his philosophies.

 Though it is sensible to say to advise someone to clear their credit card debt before they start to save. Interest rates vary as do rates of return, though our rule of thumb is this. If you’re paying upwards of 7% APR on a loan use spare capital to pay it off. Once you’ve done this start and invest.

 Property investors very rarely factor in the cost of debt when working out their returns. There’s also a common adage that as long as you make more than it costs to borrow debt is fine. Unfortunately this is easier said than done. Investment growth isn’t uniform, in fact it is completely lumpy and comes in fits and starts. Interest on debt is very uniform and keeps coming regardless of market conditions. Also interest on debt never turns negative. Yet investment returns on any asset will at some point move into the red.

 Though at this point we need to say that not all debt is equal. It would be crazy to say to someone that they shouldn’t be investing because they have a mortgage. Though it is sensible to say to advise someone to clear their credit card debt before they start to save. Interest rates vary as do rates of return, though our rule of thumb is this. If you’re paying upwards of 7% APR on a loan use spare capital to pay it off. Once you’ve done this start and invest.

 Put Something Away

So, here is the first of our investment wealth creation principles. This may sound obvious, you need to put money away. You need to invest on a regular basis, in a way that suites you best and keep doing it.

 You need to spend less than you make, as we said you can’t build wealth if you are servicing debt. Some people will disagree with this especially when it comes to property. We want to say let’s see how much wealth you’re creating when you’re stuck with negative equity.

 It is pretty surprising the number of people who want to build wealth yet never put anything away.  This leads us on to our next principle.

 The Sooner You Start The Better

If you start early in your 20’s as soon as you start work saving 12.5% of your pre-tax income will see you well on your way. If you start in your 30’s then you’re going to need to put away between 15-17.5% of your pre-tax income. Starting in your 40’s and you’ll be looking at +25% to get anywhere near where you would like to be.

I’ve met many a 55 year old who hopes to retire at 65. Yet they have no pension and very little savings, how it’s going to happen is a mystery. If they’ve paid off their mortgage so they’ll have somewhere to live which is a positive. Now it’s time to get serious, panic has set in and reality bitten we need to do some hardcore saving. This is what we make today and we’re going to need this when we retire. What do we need to do? They find out that with the time they have and the income they want, they have to save a lot right now. When we say a lot, we mean 60-70% what they earn, sometimes even more.

The general reaction is panic and they end up doing nothing. It’s called the ostrich approach to financial planning. The outcome is that they own a house (which they’ll have to sell) and have no money to live on.

 Doing nothing makes it worse. Instead of ignoring the situation address it and make changes. For example revise your income goals and delay your retirement age. Both options would improve the situation better.

 The sooner you start to save the more wealth you will accumulate. Time can be your friend or it can be a cruel enemy when it comes to wealth creation. As you can see above starting earlier makes a big difference and has less of an impact on your lifestyle.

Invest According To Your Time Frame

What do we mean by this? You should invest in something that for the period of time that is available before you need to use the money.

If you’re saving for a deposit on a house that you plan to buy in the next 24 months, you shouldn’t invest into capital assets. So, no shares, share based funds, hedge funds, REITS, property funds, bonds, bond funds and all forms of cryptocurrency. What you should be investing in are cash based assets. Find the best deposit account that meets your timeframe and use that.

 I hear you say, surely, I could have a little punt on cryptocurrency or some hot tech stock and get a bigger deposit. If you’re lucky yes, or you could . Or you could be explaining to your wife/husband/partner why you can’t buy the house of their dreams. All because your deposit is now worth half of what it should be.



The rule here is if you don’t have the time to wait for an asset to recover before you need to take money from it. Then don’t invest in it.

 If you do have time to wait. For example,  you have a 10+ year time horizon then you should go for it take some risk. Sticking your money into a bank account isn’t going to do little towards your retirement.

 You won’t build wealth with assets that pay interest only. All it does is keep your money safe for now or so you think. In reality when you come to need it will buy you a lot less as inflation will have devalued it.

Accept The Market For What It Is

 

This is the natural progression from our last wealth creation principle. Only if you’ve invested inline with your timeframe will this make any sense. You’ll have the time to allow markets to recover.

 All markets go up and down in the short term and some of these shifts look dramatic at the time. Over the longer term these movements flatten as markets recover and move on. This means that the shorter time you have in the markets the less chance you have of making money. Conversely the more time you have in the market the more chance you have of making money.

 If you accept that markets go up and down, don’t panic and stick to your strategy. You’ll be fine.

 A Word On Market Timing

 If you have the ability to predict the future, what, where and when then the world is your oyster my friend. Give us a call because we want to be along for the ride!

 If you’re looking to time the markets properly you should also be shorting them. For those unfamiliar with this term it is a way of making money when markets fall. The longer you have to do it the more expensive it gets. Making the call too early can lead to financial ruin.

Just pulling your money out of the market means that it isn’t doing anything. When exactly should you go back into the markets? By the time most investors want to invest again they’ve already missed a big chunk of the upside.

 So if you accept that markets move in both directions and you have the time to ride out the falls you’ll do well. Panic when the market is going against you and start selling down your portfolio you’ll lose money. That is something that we can guarantee. Remember growth isn’t uniform, usually it comes in chunks.

Invest Regularly Or When You Don't Want To

 One of the best ways to build wealth over the long term is to make some kind of regular investment. The reason being you invest across the whole market cycle and buy at the lows. Also, as with any kind of regular payment such as a mortgage or loan you adjust your life style around It. You end up so you don’t notice the money going out anymore.

Also you’re not committing big lumps of capital to the market at any one time, so you should be less anxious. With regular investments, market volatility is your friend in the long-run.

If you don’t want to make regular investments and prefer ad hoc contributions then the second part is for you.

So, you have a warm fuzzy feeling about the markets, everything is going well. New market highs every week and you want to invest. DON’T! Or, markets are awful. The thought of investing repulses you. You’d sooner see Donald Trump sitting on the toilet wolfing down a cheeseburger. Well you should jump in.

Our natural instinct is to invest when things are going well and to avoid markets when they’re not. What this means is we are self-saboteurs, a modus operandi of buy high and sell low.

 By the way whatever your reason for not making regular investments, it’s not a good one. Get over yourself and start making them you won’t regret it.

Rebalance

Out of all the wealth creation tips we see this is the most important and yet it is the most overlooked.

If you’re using a managed fund or discretionary manger then they should be doing this for you. If you’re not then make sure your portfolio gets reblanced. If your financial adviser runs your portfolio insist they rebalance every 12 months.

If you’re managing your own portfolio this is an important part of doing a proper job. Once a year is enough anymore than this is overkill any less could prove costly.

 What is rebalancing and why is it so important?

When your portfolio is set up there should be an allocation model that it meets. This model will defines how your money is split between each of the assets in it. Over a year these assets will grow at different rates. Some assets will have made and others will have lost money to varying degrees.

 This will mean that the portfolio doesn’t conform to the asset allocation model. It also means that the risk profile of the portfolio has changed making it muck more or less riskier than you want.

When we rebalance, we bring the portfolio and the risk profile back in line with the original model. We do this by selling assets that had strong performance and buying those that have lost money

Crazy Talk

“Are you ******* mad, we should be selling those dogs and buying more of the good stuff” I hear you say and if you were you’d be wrong. This is exactly why most people had nothing left after the tech boom of the late 90’s. It’s also why most investors will lose their gains in the crypto currency boom.

First of all, all the assets in your portfolio shouldn’t grow at the same time. If they do it will normally mean that they all go down at the same time as well.

As long  you’re good with that then (you have our total respect) you’ll be fine. Though you should still rebalance.

Most people aren’t which good with that though. This means they need to have some diversity in their portfolios. Different asset classes doing different things. This helps to reduce the overall risk and volatility of a portfolio.

The likelihood is that the assets that performed well this year may not be as strong next year. The assets that were weak this year will probably be stronger over the coming 12-24 months. Rebalancing helps us lock in the gains from those winners and make sure that we buy the losers at a reduced price. This also means that the losers don’t have to recover completely before we make money and if they do we make more money. Rebalancing will also mean that you take your portfolio back to the original risk profile that you were comfortable with.t

Have Multidimensional Investments

 What we mean by this is that you shouldn’t just have assets that only make money when the price goes up. Commodities, art, wine you get the picture (pardon the pun). If these assets fall in value you can only wait for them to recover or sell at a loss.

The stupidest investment that anyone can make is to buy a property and then leave it empty. You have to have more money than sense, it doesn’t matter how wealthy you are. You can do something way better. One of the most attractive parts of property investment is the rental income. This is because as it supercharges returns and offsets any lending costs.

This holds true for any investment dividends on shares and the coupon on bonds. They are essential as they boost your annualised returns.

 As we already mentioned any market has good and bad spells, even property. When we get an income from our investments it makes those bad spells better. Even though valuations may have fallen it makes the situation more palatable. It also means that the investment is making you money even when it isn’t growing. If you reinvest the income it averages out your position and makes the most of any market falls. In the long run your investment will be much more efficient.

It’s OK to have some commodities or other similar assets (never empty property). It will diversify your portfolio and in turn make the portfolio more resilient. This is because you have more unrelated assets doing different things. Too much though isn’t good as you start to forego that lovely income.

Minimise Investment Costs The Best You Can

Investments cost money and no one does anything for free. Nor should you expect them to even those nice people at Vanguard have charges. If you want your portfolio managing for you then you will pay more. If you are happy to manage it for yourself then you are going to pay less though you’ll have more work. Though this isn’t for everyone. Whatever you decide it’s important to keep investment costs as low as possible.

 Get good value, because if costs are too high then your portfolio won’t grow.



 Any investment strategy has layers of costs though some more than others. If you go direct to the fund manager then your cost structure will be simpler, which is great. The downside though is the manager may not have a full range funds. They certainly won’t be strong in every market sector. As a result, you may lose more in growth than you’re saving in fees.

We’re not going to get embroiled in investment strategy today, it isn’t what this article is about. What we will say is whatever your preferences, an investment platform makes sense.

Not all platforms are equal so it is important to make sure that you get the right one for you. Firstly you should be able to buy the assets that you want through it cost effectively. If you are a passive investor then it wouldn’t do to use a platform that has strict minimum trading criteria. If you don’t want to manage your own portfolio then avoid platforms that don’t use managed funds or third party managers.

Expats Be Warned

A note of caution to expats past, present and future. The complete opposite of keeping costs down is an offshore life assurance product. Today things have moved on and there are much better options.

Become A Gardener Or Hire One You Like

Investing is a lot like gardening. You need to have a plan if you don’t then you could get into an awful mess. First you need to do the research, what goes where and works well in which conditions. Then you have to see what you do and don’t like. What are you going to be using it for? Determining this this has a significant impact on what you’ll do. Making sure that you have the right plants in the first place will save you time and money later.

 Once you’ve got your plan together then you need to start planting. It may not look great at first because things need time to settle, bed in before they start to grow. This point you need to be patient, leave things alone and give them the time they need. Keep digging things up because they’re not growing fast enough and they never will.

Sometimes the weather will take its toll, there’s no need to dig everything up and start again. Tidy up add some more plants to the areas that got damaged the most and carry on. Otherwise just keep things tidy and do the maintenance that’s needed when its needed.

Gardening may not be your thing and yet you’ve got a garden. You may or may not know what you want from it. If you don’t want to do all this yourself then find someone to do it for you and pay them. Make sure that you can work with them and get going.

Apply these wealth creation principles to your investment strategy and you’ll do well. Financial freedom will be close at hand.

For Enquiries and inspection of Properties

  • Divine Access Homes
  • +2347011406853 or 08135588667
  • www.divineaccesshomes.com.ng


 

Friday, October 2, 2020

Lagos State Government Planned to Build Fourth Mainland Bridge

 

The Lagos State Government is proposing the sum of $2.2 billion for the construction of the 37.4 kilometres 4th Mainland Bridge.

Upon completion, the bridge would have 2 x 4 lane carriageway cross-sectional road with allowance for BRT Lane and future road expansion.

It would also become the longest Bridge in Africa second only to the 6th October Bridge in Cairo, Egypt, featuring three toll plazas, nine interchanges, 4.5Km Lagoon Bridge, Rest and Service Areas and an eco- friendly environment amongst other added features.



800 houses are also expected to go when construction begins against the 4,000 houses earlier marked for demolition in the previous design before it was realigned.

Governor Babajide Olusola Sanwo-Olu disclosed this Tuesday at the first stakeholders meeting on Environmental and Social Impact Assessment (ESIA) for the bridge held at Adeyemi Bero Hall, Ikeja .

The freeway bridge is subdivided into three sections namely Island Section, Lagoon Section and Mainland Section.

It starts at the Abraham Adesanya Roundabout in Lekki where a “free flow” interchange will be constructed as well as some traffic flow alterations to the existing Lekki – Epe Expressway so as to maintain traffic movements during construction.


If you are interest in Buying land,  a house at Lake View Park 1, Royal Gardens Estate, Melrose Park Estate or you want to buy from any PWAN Estate in Lekki Phase 2 or in Ibeju lekki, please contact




Divine Access Homes

Email:simeono@divineaccesshomes.com.ng 

+2347011406853 or 09090847111

www.divineaccesshomes.com.ng






Thursday, July 9, 2020

TYPE OF LEGAL OWNERSHIP OF LAND IN NIGERIA


I was doing a personal research into Land Titles and discovered this beautiful piece written in Jun 13, 2014 by Pastor Olatayo Beckley LLB, BL, ACIS, ACIARB, MIOD
Lawyer, Chartered Secretary, Tax Expert, & Arbitrator based in Lagos Nigeria.
I decided to post it to educate the forum and have our legal minds buttress and explain further the points that have been made. Our amiable Omonile Lawyer of the forum has been quiet recently though. Seems he is getting tired of omonile cases and looking at the more juicy cases from politician. wink@Lawyer over to you.
About a month ago, I stumbled upon a discussion by some people (who are not legal minds) on the issue of legal title over land and they all concluded that the highest and safest form of legal title over landed properties in Nigeria is the one conferred by the Certificate of Occupancy issued by the government.
They safely gave this conclusion on the fact that the Land Use Act of 1978 (the main legislation on real estate in Nigeria) has transferred the ownership of all lands to the government and it is the government that can pass such ownership title in respect of land to individuals and corporate entities via the certificate of occupancy. I then intruded into their discussion and informed them that this is not the position of the law. The law actually recognizes five types of legal land ownership in Nigeria and the certificate of occupancy is just one of them. In fact, there are many instances where the court has nullified a certificate of occupancy where the root of title is not found in one of the types of legal ownership recognized by the law.

To Let - N3M/Annum/nett
Thankfully on Wednesday the 9 of June 2014, the Honorable High Court sitting at Ota Ogun State awarded judgment in favour of my clients in respect of a vast expanse of land in Ogun State where the information I passed to the discussants above was further highlighted and reiterated.
I will therefore highlight these five types of legal ownership for the purpose of informing Nigerians and non Nigerians on this position of the law because I believe that information is power.
The Supreme Court in the case of ELEGUSHI V OSENI (2005) 14 NWLR (PT 945) AT 348 aptly stated the five types of legal land ownership in Nigeria and they are as follows
1, By traditional evidence.
2. By acts of Ownership extending over a sufficient length of time which acts are numerous and positive enough to warrant the inference that they are owners
3. By acts of long possession and enjoyment of the land in dispute
4. By the production of the documents of title which must be authenticated
5 By proof of possession of connected or adjacent land in circumstances rendering it probable that the owners of such connected or adjacent land would in addition be the owners of the land in dispute.
I will try and explain each of these types of ownership:
1. BY TRADITIONAL EVIDENCE. The Nigerian law first and foremost gives recognition to traditional or customary land ownership notwithstanding the Land Use Act. This means in effect that people who have “founded” and “settled” on land over the years in the olden days are deemed to be the owners of such land. Consequently the title of traditional land owners is legal, proper and genuine. They need not have certificate of occupancy to prove their land ownership
2. BY ACTS OF OWNERSHIP EXTENDING OVER A SUFFICIENT LENGTH OF TIME WHICH ACTS ARE NUMEROUS AND POSITIVE ENOUGH TO WARRANT THE INFERENCE THAT THEY ARE OWNERS. 
The Nigerian law also gives legal ownership over land to people who cannot by positive traditional evidence show how they “founded” or “settled” on the said land if they can show that they and their ancestors have lived on the land for years without being challenged.
3. BY ACTS OF LONG POSSESSION AND ENJOYMENT OF THE LAND IN DISPUTE
Where the land owner cannot prove their land ownership by positive traditional evidence or show that their enjoyment of the land is not challenged or controverted , but if they can show that their adversaries in respect of the land have failed to take positive legal steps to “wrestle” the ownership land in dispute from them over a long period of time, they will then be deemed to have legal ownership of the said land.
Luxury 4 Bedroom for Sale/Price: N55M

4. BY THE PRODUCTION OF THE DOCUMENTS OF TITLE WHICH MUST BE AUTHENTICATED:
This cover all instances of formal land documents which will include the certificate of occupancy and other documents issued by the government
It is very important that such documents of title must be premised and authenticated upon the earlier mentioned roots of title. Consequently, a mere certificate of occupancy will not confer legal ownership if it can be shown that the root of title is defective. A certificate of occupancy procured through fraud and misrepresentation will be set aside and considered to be of no legal effect whatsoever.
It is therefore very important that all prospective purchasers, investors or dealers in respect of real estate or landed properties must conduct investigation and ensure that the root of title of such documents of title is good, proper and founded on other evidences of title ownership before any reliance can be placed on them
5. BY PROOF OF POSSESSION OF CONNECTED OR ADJACENT LAND IN CIRCUMSTANCES RENDERING IT PROBABLE THAT THE OWNERS OF SUCH CONNECTED OR ADJACENT LAND WOULD IN ADDITION BE THE OWNERS OF THE LAND IN DISPUTE.
This would probably occur where there is no dispute that a particular vast expanse belongs to a particular persons or persons. Such persons would also be deemed to be owners of smaller surrounding parcels of land if there is no other evidence to the contrary
It is therefore very important that all investors and dealers of real estate in Nigeria should arm themselves with this piece of information in order to protect their investment.
CERTIFICATE OF OCCUPANCY
This is the most important land title document used to certify the legal and ownership status of any land in Nigeria irrespective of its usage. It is a legal document indicating that an owner of any land has been granted a statutory right of occupancy by the executive governor of the state where the land situates or a customary right of occupancy by the local government chairman if the land is in a rural (non-urban) area.This statutory right of occupancy is different from a Customary Right of Occupancy, which is usually granted by Local Government Council.
A Certificate of Occupancy is the land title document that is delivered to the owner of a piece or larger parcel of land by the government attesting to the owner’s title to the land whose ownership is in accordance with the applicable law. Over time, users of land and financial institutions have elevated this type of land document to be conclusive evidence of the ownership of the land described in it, to the exclusion of any other party claiming title to the same piece of land.
RIGHT OF OCCUPANCY (R of O)
The Land Use Act introduced the right of occupancy system in Nigeria. Right of occupancy is a right to use and occupy land in accordance with the provisions of the Land Use Act. Right of occupancy is completely different from ownership of land known under both customary and common laws which exists before the promulgation of the Land Use Act.
It is the right granted to an individual or corporate organization over a plot or parcel of land in an approved government layout. The right is for a period normally, a maximum of 99 years lease is granted for residential purpose, while other uses range from 35 to 70 years depending on the value of improvements.
It is the grant to an individual or corporate organization over a plot or parcel of land in an approved government layout. The right is normally granted by the Governor of the state where the land is located and the Minister, in case of land under the control and management of the Federal Capital Territory.
A certificate of occupancy is therefore the evidence of the right of occupancy. A certificate of occupancy is a document that shows that the person disclosed there in is entitled to the right of occupancy. It must be noted that certificate of occupancy is the only method devised by the Land Use Act which links a person to a right of occupancy. 
DEED OF ASSIGNMENT/CONVEYANCE
This is a very important document that must be demanded for and given to a purchaser after the conclusion of any land/property transaction between such purchaser/buyer and the owner/seller of the land/landed property in question.
Section 2(v) of the Conveyance Act 1881 provides the definition of conveyance as follows: “A conveyance includes any assignment, appointment, lease, settlement and other assurances and covenants to surrender made by deed on sale, mortgage, demise or settlement of any property or on any other dealing with or for any property; and convey, unless a contrary intention appears, has a meaning corresponding with that of conveyance”.
Also section 2(1) of the Property and Conveyance Law, 1959 states that: “A Conveyance is a mortgage, charge, lease, assent, vesting declaration and every other instrument except a will”. Conveyances are described as including “assignment, appointment, lease, settlement and other assurance and covenant to surrender, made by deed, on a sale, mortgage, demise, or settlement of any property, or any other dealing with of for any property”.
Conveyance is the process by which ownership of land is transferred between a seller and a buyer. This can include both residential and commercial land transactions.
It refers to the mutual agreement between an owner or seller of a land/landed property and the purchaser/buyer of such land/landed property showing evidence that the owner/seller of the land/landed property has transferred all his/her ownership, interest, rights and title on the land/landed property to the purchaser/buyer who has bought the land/landed property from him/her.
A Deed of Assignment therefore is an agreement where an assignor states his promise that from the date of the assignment or any date stipulated therein, the assignor assigns his ownership in that Land to the assignee.
The deed contains very pertinent information for a real estate transaction. It spells out the date when the ownership of the property transfers from one owner to the other. The deed also gives a specific description of the property that is included in the transfer of ownership.
It is very compulsory and mandatory for a Deed of Assignment document to be recorded at the appropriate land registry to show legal evidence as to the exchange of ownership in any land/landed property transaction in order to make the general public and government aware of such exchange and/or transaction.
Any recorded Deed of Assignment at the appropriate land registry will be authenticated in form of either a Governor’s consent or Registered Conveyance after it has been stamped at the Stamp Duties office. Under the Land Use Act of 1978, when parties exchange documents of sale (A Deed of Assignment), what is being sold is the amount of time unexpired from the 99 year right of occupancy called “the unexpired residue of the term”.
Most importantly, apart from the Certificate of Occupancy, a deed of assignment or conveyance is the most recognized document of title on matters relating to land and landed properties’ ownership/transaction in Nigeria as it helps to trace the history of how such land and landed property that is been transferred gets to its present owner as well as any disputes that may have occurred as to the rightful owner of such land and landed property.
These documents (especially the Sale Agreement and the Deed of Assignment/Conveyance) must contain the names and descriptions of the parties, proper description of the property, the agreed purchase price, the acknowledgement of receipt of that amount, the capacity in which Vendor is selling, a Warranty that he has a right to sell in that capacity, condition that the contract shall be conditional on the obtaining of any requisite consents to the transaction, etc.
DEED OF LEASE:

For Sale - N130M

The use of Deed of Lease was quite common from the passage of the Land Use Act in 1978 to transfer property especially government properties in Ikoyi, Surulere, Victoria Island axis of Lagos state during the mid-70s and 80s after the promulgation of the Land Use Act. These lands were mostly federal government lands and high profile lands and it was the first foray into the issuance of the certificate of occupancies for the first time to people.
DEED OF SUB-LEASE:
This is another relevant tile document in any land and landed property ownership/transactions. It is the legal document duly signed and stamped indicating land and landed property transaction between a leaseholder of land sub-leasing his/her unexpired lease term to a third party.
LAND CERTIFICATE:
This is a document of title as to the ownership of a piece or large parcel of land issued by a government’s land registry for registered freehold or leasehold lands in Nigeria prior to the promulgation of the Land Use Act of 1978.Land Certificate was usually issued to owners of land and landed properties when the Property Conveyancing Law of 1959 was still in effect.
It refers to the Prima facie evidence of land ownership prior to the promulgation of the Land Use Act which vests on lands in the governor of each state of the federation.
DEED OF MORTGAGE:
Mortgage is defined as the transfer of interest in land as security for the discharge of a debt or the performance of an obligation subject to redemption.
It refers to a security for loan with an undertaken for repayment and cesser upon redemption.The common types of mortgage transactions are; Legal Mortgage and Equitable Mortgage
Legal mortgage is a type of mortgage which transfers the legal interest one has/owns in land, whether leasehold or freehold in consideration for loan advancement. It is usually created by a deed in accordance with the covenants of the mortgage contract or by use of a statutory form resulting in perfecting of instrument by which it is created.
Equitable mortgage on the other hand is a type of mortgage that transfers merely an equitable interest in land or some other properties to the mortgagee. It refers to an agreement to enter into a mortgage transaction but which is created on the rules of equity. Hence, a mere deposit of title deeds in exchange of a mortgage loan without a written agreement is an equitable mortgage.
SURVEY PLAN: 
This is another important title document that helps to reveal the true ownership status in any land and landed properties’ transactions. It also helps to reveal if such land is not under any government acquired or committed lands/area.
In a situation where the land to be purchased by the prospective buyer is just a bare land without any improvement or building on it, it is compulsory for the buyer to carry out a proper scrutiny on the authentication of the land survey plan at the appropriate survey ministry or agency so as to establish the rightful owner of the land and if the land to be purchased does not fall under any known government acquired or committed land.
Whatever title document that is presented during any land and landed property transaction by the owner/seller to the purchaser/buyer, it is compulsory for the parties involved in the transaction to obtain the governor’s consent as well as have the document duly registered with the appropriate government agency after completion of the transaction to make it legally binding on all parties involved in the transaction.
The land use act of 1978 makes it mandatory for a holder of right of occupancy (both actual grant or deemed grant) when carrying out subsequent transactions on the land, to obtain Governor’s consent, either by way of assignment, mortgage, transfer of possession, sublease or as otherwise applicable.
Always carry out a thorough search at the appropriate government lands registry to determine the true ownership status of any land and landed property prior to final completion of the real estate transaction

For Further enquiries, site inspection and presentation, call:
T: +234 7011406853 OR 08110227156
E: simeono@divineaccesshomes.com.ng
W: www.divineaccesshomes.com.ng


HOSSANA GARDENS PHASE 1 IBEJU LEKKI

HOSSANA GARDENS Phase1, Eleko, Ibeju Lekki (Besides Amen Estate)

The Eleko Beach Road and Lekki Coastal Road is fast emerging and becoming the most Commercial Wing of Ibeju Lekki. Only Individual and Corporate Investors with Foresights recognize this. Little wonder why the Shoprite, Kellogs, Tantalizers, Dangote Refinery and petrochemical Company, and a host of others are have already positioned themselves here.


HOSANNA GARDENS provides Individual and Corporates the opportunity to have a bite of the berry (and for those who already bought a Landed Property here, it provides another/second bite of the berry) to Invest (buy) in well positioned Parcel of Land around Eleko Beach Road, Ibeju Lekki, Lagos.

LOCATION:
Hosanna Gardens is located off Eleko Beach Road, off Lekki Epe Expressway, Ibeju Lekki, Lagos. It is close to the popular AMEN ESTATE, and the proposed site for Ibeju Shoprite.

ELECTRICITY ALREADY INSTALLED

TITLE: Government Excision (C of O in View)

PRICE:
900sqm— N16,000,000
600sqm— N12,000,000
450sqm— N8,000,000

For more enquiries, Site Inspection Booking, Presentations, etc please contact us:
07011406853
08135588667

Friday, April 3, 2020


WHAT TO KNOW BEFORE BUYING LAND IN NIGERIA

Written by Real Estate Law Department at Resolution Law Firm, Lagos, Nigeria


Buying land in Nigeria is one of the common property law transactions, which is administered by various legislations depending on the jurisdiction in Nigeria. Conveyancing, as it is known, is the process by which ownership of land is transferred between a seller and a buyer. This can include both residential and commercial land transactions.

A prospective purchaser of any property (or normally his solicitor) would have to main concerns. First, he must be sure that the vendor of the property is really entitled to sell it. Thus the buyer must first insist that the vendor proves that his title to the land is good and that he can pass to the purchaser the land/ property which he is offering to sell. Secondly, the purchaser will want to know whether any third parties have rights to the land which might interfere with his intended use of it. These third-party rights might include covenants restricting usage, a right of way, tree preservation order, or even mortgages. Concerns about these matters will lead the purchaser or his representatives, to make extensive enquiries
before the purchase of the property is finally concluded.

There are however many factors one needs to consider before buying a land in Nigeria these ranges from

i. The size of the land,
ii. The soil type,
iii. The location of the land which is very important,
iv. The purpose which the land will be used for,
v. Accessibility of such land i.e proximity to access road,
vi. The price of the land,
vii. The legal papers available in respect of the land,
viii. The environment, as well as the security conditions of the area, should be well evaluated before engaging in such a transaction.


In taking cognizance to the aforementioned factors, it is advisable to involve an expert who has the background, requisite knowledge and skills in this area of a property acquisition. Thus it is very important to have a lawyer who is grounded in property law practice before embarking on a land purchase. This is so because a lawyer would ensure you don’t run into legal troubles with land documents after purchase, and also by virtue of our enabling laws it is only a legal practitioner that are allowed to prepare legal documents (instruments) involved in these conveyance process which involves the transfer of interest from one person to another.
Furthermore, inquiries which would be relevant for the purchaser solicitor to seek before buying a land on behalf of the purchaser include;
i. Boundaries of the property
ii. Disputes over the property
iii. Guarantees in respect of the property
iv. Services supplied on the property
v. Planning schemes of the property
vi. Insurance provisions and policies
vii. Reversionary title or interest
When all these have been satisfied, the purchaser solicitor can now proceed with the purchase of the property

DOCUMENTS REQUIRED FOR LAND PURCHASE IN NIGERIA.

During the process of purchasing a land, there a number of crucial documents required from the seller in order to effectively validate the transaction. These documents are necessary as they are evident of title which the buyer possesses in relation to the land. It is important to note that there are different types of land documents in Nigeria. These documents include:

i. Approved survey plan: This is an important title document that helps to reveal the true ownership status in any land and landed properties’ transactions. It also helps to reveal if such land is not under any government acquired or committed lands/area.
ii. Approved layout
iii. Deed of assignment: This is a very important document that must be demanded and given to a purchaser after the conclusion of any land/property transaction between such purchaser/buyer and the owner/seller of the land/landed property in question. Section 2(v) of the Conveyancing Act 1881 provides the definition of conveyance as follows: “A conveyance includes any assignment, appointment, lease, settlement and other assurances and covenants to surrender made by deed of sale, mortgage, demise or settlement of any property or on any other dealing with or for any property; and convey, unless a contrary intention appears, has a meaning corresponding with that of conveyance”.
iv. Purchase receipt: this is the evidence of due payment of the purchase of the land and it is usually required when registering the land.


v. Certificate of Occupancy: this is one of the most important land title documents that is used to certify the legal ownership status of any land in Nigeria irrespective of its usage. It is usually delivered to the owner of a parcel of land by the government attesting to the owner’s interest to the land where such interest is in accordance with the applicable laws. It is a legal document indicating that a person who has acquired an interest in land has been granted a statutory right of occupancy by the governor
vi. Power of attorney: this is usually required where a person is acting for another person, individuals or companies as his agent. It is a document that authorizes such person to act on their behalf.

These documents are essential as they are necessary to process a search in the land registry, the registration of title, registration of Deeds, as well as registration of Certificate of Occupancy. It is equally important to note the LEGAL CONSEQUENCES OF REGISTRATION OF LAND IN NIGERIA which is essentially three:

Non-registration may (i) render certain documents void, (ii) render them inadmissible as evidence in judicial proceedings, and (iii) make them lose priority against registered ones affecting the same land.

It must, of course, be noted that registration does not by itself cure the instrument( legal document) registered of any defect, nor does it confers upon it any effect or validity which the instrument, apart from the registration, would not otherwise have had.

PROOF OF LAND OWNERSHIP IN NIGERIA

There have always been disputes arising from land matters which often end up in litigation; this is usually as a result of failure to obtain the right documents for proper ownership of land and also the failure to complete the process of acquiring a perfect title to the land. That is why in the bid to achieving justice, the court will rule in favour of any party that can prove a better title to a land or property. This was the position of the court in ELEGUSHI v. OSENI (2005) 14 NWLR (PT 945) AT 348.
Thus in law, there is every possibility that the owner of a piece of land or property may not appear before the law as a person with a better title as it was held in the case of Agboola v. United Bank for Africa Plc. & 2 Ors. (2011) 4 CLRN 33. In the popular case of IDUNDUN v. OKUMAGBA (1976) 9-10 SC, 227 1 NMLR, the supreme court held that title or ownership to land can be proved in any of the following five ways:


1. By traditional evidence.
2. By production of documents of title duly authenticated and executed.
3. By acts of ownership extending over a sufficient length of time numerous and positive enough as to warrant the inference of true ownership.
4. By acts of long possession and enjoyment, and
5. Proof of possession of connected or adjacent land in circumstances rendering it probable that the owner of such connected or adjacent land would, in addition, be the owner of the land in dispute.

Thus the most common ways listed above is the production of a document of grant or title. This method entails providing any of the following document; Deed of Assignment/ conveyance, a Deed of gift, a legal Mortgage, and a Certificate of Occupancy. As such it is important that a person intending to buy a land must make sure to instruct his lawyer to perfect the title of the land or property.

HOW TO WRITE LAND AGREEMENT IN NIGERIA         

It is very instructive to note that it is only a legal practitioner that is entitled to prepare instruments relating to land. Such instruments include Deed of a lease, Assignment, Legal mortgage, etc. the name and address of the legal practitioner must be stated on the instrument and it must bear a seal of such legal practitioner, this is also known as Franking of such instruments. Why this is so is that where an instrument relating to immovable property does not contain the particulars of the legal practitioner who prepared it, it may not be accepted for registration at the land registry.

In conclusion, it is very essential and advisable to involve a lawyer when one intends to buy a land or acquire a property as role and responsibility of a lawyer in relation to this transaction including but not limited to the following:

i. Investigation of the title sought to be transferred from the appropriate registries
ii. Advising on the viability or otherwise of the title of the property sought to be transferred.
iii. Preparation of formal contract that encapsulates the agreement of the parties in respect of the property that is being transferred. Excellent drafting skills are required for this to ensure that the document reflects the full intention of the parties
iv. Approval of the contract by the solicitor of the purchaser
v. Exchange of contract by the parties to the contract
vi. Obtaining the consent of relevant authorities for permission to transfer the legal interest in the property
vii. Preparing and ensuring the execution of the deed or the instrument that transfers the legal interest in the property.
viii. Payment of stamp duties, fees and other taxes in respect of the property being transferred
ix. Registration of the instrument that conveys the legal interest in the land

All of the above must effectively be carried out by the legal practitioner for the buyer of the property.



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