Real estate fraud is a prevalent issue in Nigeria, with many falling victim to scams involving fake land titles, double sales, and fraudulent property agents. In fact, a report by the Nigerian Economic and Financial Crimes Commission (EFCC) noted that real estate scams contribute significantly to financial crimes in the country. Understanding how to navigate property transactions legally can save you time, money, and potential heartbreak.
How to Avoid Real Estate Fraud in Nigeria
Here are actionable steps to avoid real estate fraud in Nigeria:
1. Verify the Property Title
Before making any payment or commitment to buy land or property, title verification is crucial. Many fraudulent schemes involve selling land that does not belong to the seller. Conduct a search at the Land Registry in the state where the property is located to confirm the legitimacy of the title. Ensure that the property has either a Certificate of Occupancy (C of O) or a legally recognized equivalent.
Note: If the property lacks a C of O, you may be exposed to risks under Nigeria’s Land Use Act, which gives the state government control over all land. Always ensure the seller has the legal right to transfer ownership.
2. Use a Trusted Real Estate Agent or Lawyer
Working with an unverified or inexperienced real estate agent increases the risk of being defrauded. To avoid this, engage a certified real estate agent or a property lawyer with a proven track record. Lawyers who specialize in property law can help you verify documentation, negotiate contracts, and ensure that the deal complies with legal standards.
3. Conduct Due Diligence on the Seller
Not every seller is trustworthy, even if they present convincing documents. Confirm that the seller is the true owner of the property by requesting the Deed of Assignment, Survey Plan, and their identification documents. If the property is jointly owned, ensure all owners give consent to the sale. In some cases, unscrupulous sellers may impersonate legitimate owners.
Legal Insight: According to Nigerian law, a fraudulent sale where the seller doesn’t have proper authority can be overturned in court. However, the legal process may take years and lead to substantial financial losses.
4. Inspect the Property Physically
One of the most ignored aspects of real estate transactions in Nigeria is physical inspection. Fraudsters often use fake photos and documents to lure potential buyers. Always inspect the land or property in person and ask neighbours or local authorities about the ownership status of the land.
For instance, in Lagos, it’s common for sellers to show buyers undeveloped land, only for the buyer to discover it has been sold multiple times. Physical inspection helps you cross-check claims made by the seller or agent.
5. Avoid Paying in Cash
When making payments, avoid paying in cash or handing money directly to the seller or agent. Bank transfers provide a verifiable record of transactions. Make sure payments are made to an account associated with the seller’s legal entity or name. Always ensure that you receive receipts for all payments.
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6. Obtain the Governor’s Consent
Under Nigerian law, for any transaction involving the transfer of property ownership (especially land), you are required to obtain the Governor’s Consent. This legal requirement is often overlooked by buyers, making the transaction incomplete. Without Governor’s Consent, you may not have full legal ownership of the property.
7. Check for Encumbrances and Liabilities
Sometimes properties are sold with existing encumbrances such as court cases, unpaid mortgages, or unpaid taxes. You need to ensure that there are no liens or legal disputes over the property. A comprehensive legal search at the relevant registry will reveal if the property is tied to any ongoing litigation.
8. Insist on a Well-Drafted Contract
Do not rely on verbal agreements or informal contracts. Insist on having a well-drafted contract that clearly states the terms of the transaction, including payment schedules, timelines, and penalties for breach of agreement. A lawyer should review and endorse the contract to ensure it complies with Nigerian property law.
9. Look Out for Red Flags
There are several red flags to be aware of when dealing with real estate in Nigeria. If the deal seems too good to be true or if the seller pressures you to act quickly, take a step back. Legitimate property transactions take time, and the seller should be open to thorough verification.
- Red Flags Include:
- Lack of verifiable documents.
- No access to the property for inspection.
- Unusually low prices compared to market rates.
- Hurrying to close the deal.
10. Consider Title Insurance
Title insurance is still a relatively new concept in Nigeria but is becoming increasingly important. It protects against financial loss due to defects in the title or legal claims against the property. Purchasing title insurance can provide an additional layer of protection against fraud.
Frequently Asked Questions (FAQ)
How do I verify land titles in Nigeria?
To verify land titles, you should:
- Visit the Land Registry in the state where the property is located.
- Request a certified true copy (CTC) of the property documents.
- Conduct a search to ensure the title is free of any encumbrances.
What are the common types of real estate fraud in Nigeria?
Common types of real estate fraud in Nigeria include:
- Double sales: Selling the same property to multiple buyers.
- Fake documents: Fraudsters using counterfeit land titles or deeds.
- Phantom properties: Selling property that doesn’t exist.
What should I check before buying property in Nigeria?
Before buying property, check for:
- Legal ownership (title verification).
- Survey plans and physical inspection.
- Encumbrances, such as unpaid taxes or court cases.
- Governor’s Consent for full legal ownership.
How do I avoid being scammed by a Nigerian real estate agent?
To avoid scams by real estate agents in Nigeria:
- Work with agents registered with The Nigerian Institution of Estate Surveyors and Valuers (NIESV).
- Verify their credentials and track record.
- Always consult a lawyer to cross-check the agent’s claims. The Trusted Advisors is the #1 property law firm in Lagos, Abuja, Nigeria.
Conclusion
Real estate fraud in Nigeria can be avoided with due diligence, legal safeguards, and expert assistance. By following these tips—verifying titles, inspecting property, working with professionals, and ensuring proper documentation—you can protect yourself from falling prey to scams.
Don’t rush into transactions; always take the time to confirm every detail.
Also Read:
How to Buy Land in Nigeria: A Legal Guide for First-time Buyers
Understanding the Land Use Act in Nigeria: A Comprehensive Guide
How to Verify Property Titles in Nigeria: A Comprehensive Guide
How to Obtain Certificate of Occupancy in Nigeria: A Comprehensive Guide
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