ESSENTIAL LEGAL TENETS OF REAL ESTATE MARKETING IN NIGERIA

1. ESSENTIAL LEGAL TENETS OF REAL ESTATE MARKETING IN NIGERIA Presented by: Amechi Isiekwena

2. INTRODUCTION • AIM & OBJECTIVE The purpose of this presentation is to briefly enlighten uson the basic legal marketing and agency rules existent in the Nigerian Real Estate Market in order to; • Protecting the interest of the Marketing Agent. • Finalise a transaction without impediments. • Protect the client from avoidable legal pitfalls in transactions.

3. PRESENTATION OUTLINE • THE PRINCIPLE OF CLIENT RELATIONSHIP • THE PRINCIPLES OF AGENCY • STATUTORY REGULATION FOR REAL ESTATE & PROPERTY LAW IN NIGERIA • TYPES OF TITLE DOCUMENTS • EXECUTION OF CONTRACT DOCUMENTS • TITLE PERFECTION REQUIREMENTS • REAL ESTATE & PROPERTY LAW CHALLENGES AND SOLUTIONS

4. ACTING FOR YOUR CLIENT Why would I use you as my agent to market or source for my real estate investment? Why would a client trust your services to the point of repeatedly purchasing or selling properties through you?

5. What then is your relationship with your client?

6. CLIENT RELATIONSHIP: A CONTRACT • WHAT IS A CONTRACT? A contract is a LEGALLY ENFORCEABLE AGREEMENT between 2 or more parties that creates an OBLIGATION to do or not to do a particular thing. It is an exchange of promises that the law will enforce. • ELEMENTS OF A CONTRACT • Offer • Acceptance Conditional Acceptance: this is when on replying an offer, the party puts a condition to the opposite party. This is not binding till those conditions are met. • Consideration (Agency fees)

7. CLIENT RELATIONSHIP • Intention to create legal relation • Capacity to contract • Infants, Insane persons, companies not properly incorporated ( not having 2 Directors or a Director and a Secretary), Ultra vires • TERMS OF CONTRACTS • Express • Implied • Conditions and Warranties

8. RULES OF AGENCY

9. BASIC PRINCIPLES OF AGENCY • Written documentof the sumto be paid as Commission. • An agent is accountable for the extra sales profit made without the clients consent. • An agent earns where he/she hasbeen issued a written mandate to act as the buyer/sellers principal agent. • Commission does not include incidental expenditure unless expressly provided for. • No agency can be earned without the consummation of the transaction

10. DUTIES OF AN AGENT TO HIS CLIENT • Act with prudence in the Clients interest • Duty to account to the client • Duty to act within authority/mandate • The fiduciary duties of loyalty • Duty not to be negligent • Duty not to misrepresent

11. CASE STUDY • Mr Melaye introduces a property to Mr and Mrs Assurance, Mr Freeze then introduces the same property to the couple “thereafter” and closes the transaction. • Which of our controversial agents should earn the fees? Mr Melaye or Mr Freeze?

12. STATUTORY REGULATION FOR REAL ESTATE & PROPERTY LAW IN NIGERIA Land Use Act 1978 This vests ownership of land on the Federal Government which is held in trust by the State Governor. Recognises full ownership of family/community land over the government.

13. TYPES OF LEGAL TITLES

14. Certificate of Occupancy (Federal/State)

15. Statutory Right of Occupancy (Customary) Official Gazette

16. Registered TitleDeed of Assignment/Sub-Lease/Indenture

17. OTHER TYPES OF TITLE DOCUMENTS • Land Certificate • Deed of Assent (Registration By Administrators/Executors of an Estate) • Deed of Gift • Power of Attorney Not ordinarily a good transfer titleunless these conditions are present; • Should be irrevocable. • Should be for a consideration. • Must authorize the Doneeto sell.

18. These are not a valid titles Joint Venture Agreements Memorandum of Understanding Letter of Allocation These can be legally recognised if duly stamped at the appropriate stamp duties officeor processed to a C of O in the case of a Letter of Allocation.

19. Execution of Documents INDIVIDUALS • Must be duly signed by both parties • Endorsement of signatures on every page • Signature Verification by presentation of bio-data page of International passport/ Driver’s license

20. Execution of Documents BY COMPANIES • Must be on the Company’s letter headed paper if it is a letter of authorization/request/advice etc. • Has to be duly signed by at least 2 Directors or a Director and the Company Secretary • Properly sealed with Company seal • Duly executed Board Resolution approving the sale (must be a General Resolution if sale is done to a party connected to the company e.g. Directors)

21. PERFECTION OF TITLE IN LAGOS STATE Compulsory Perfection Documents in Lagos • 3copies of the Deed of Assignment/lease/sub-Lease • Tax Clearance certificate of both parties (where its individuals) or 2 Directors in the case of a company • Evidence of up to date Ground Rent Payment • Form 1C (undated) • 3 copies Survey plan (2 Cloth and 1 paper copy) • Photograph of property • Undertaking to provide original title for sighting at registration stage or letter of authorization in lieu • Up to date LAND USE CHARGE Payment (the LAND USE CHARGE has replaced Development levy and the Tenement rate) • Letter of no objection to register from Vendor to Purchaser

22. Possible Challenges in Titles CHALLENGE: Where the title is not registered in Vendor’s name and the property was sold to the buyer. SOLUTIONS: • Buyer can perfect & register title in his name by apply for double Consent where original Seller cannot be reached • Vendor can get original Seller to pass tittle directly to end-buyers • Buyer can apply for a fresh C of O from the Government where there is no prior title.

23. Possible Challenges in Titles CHALLENGE: Vendor’s parent owns property. SOLUTIONS: • Parent can pass title directly to end-buyers • Parent can issue a Deed of Gift (would require double consent) • Letter of Administration/Probate where landowner is deceased

24. Possible Challenges in Titles CHALLENGE: There is a Court Judgment in favour of the Vendor. SOLUTIONS: • Register judgement at appropriate Lands registry.

26. Q & A