SOME REAL ESTATE LAWS IN NIGERIA
The population of Nigeria is increasing drastically which has led to increased demand for affordable housing but the number of available houses can’t keep pace with this demand, leading to over 17 million housing deficit as at August 2012, by World Bank report 2013.
Due to this scarcity there is a continuing scramble for the available houses, these anxiety has led to increase in power of property owners leading to subverting of the provisions of the laws regulating the real estate transaction (rentals, ownership, sales, acquisition, lease, mortgage, alienation, assignment/conveyance, and sublease). The tenant has rights that are guaranteed under the various tenancy and rent control laws in Nigeria, like, the right of the landlord and tenant as regards eviction for non-payment of rent or any other issue, excessive increase in rents by the landlord which is regulated by the rent control laws, etc.
Here are some of the provisions of federal and state laws that regulate the real estate operations in Nigeria.
1.The Land Use Act, The land use act essentially states that all land in Nigeria belongs to the government. And that the government only leases the land to individuals or corporate bodies as appropriate for a period of 99 years. This means that when the government issues a certificate of occupancy or C of O to you for a property purchased, the C of O is only for a period of 99 years. The first set of C of O was issued sometime in 1976 when the land use act came into effect.
2. Rent Control Law, this is a residual matter under the 1999 Constitution. And various states have their individual rent control laws. Example, the Lagos rent control law prescribes the standard rent for each type of residential accommodation in different neighborhood, but with a caveat that any review of rent will not be more than 20% every three years.
3. Agency and Legal Fees, Lagos Rent Control Law requires that Solicitors and estate agents must not charge more than 5% as solicitors fees for preparing Tenancy Agreements and 5% as agency fees respectively.
4. Eviction of Tenants, Under the Recovery of Possession Edict 1991 of Rivers State and Recovery of possession Law of Lagos state, prescribes that only the court can order the eviction of tenants. Where there is a default by a tenant in respect of any aspect of the tenancy and the landlord intends to terminate the Tenancy, a proper notice to quit must be personally served on the Tenant and the length of the quit notice is usually determined by the tenure of the tenancy as follows; where rental is paid monthly, quarterly, half-yearly or yearly, a month, quarter or half yearly notice as appropriate would be valid to determine Tenancy.
At the end of the day, it is very important to be aware of these statutory laws that have been enacted and established by both the federal and state government to regulate, guide and govern all forms of real estate transactions in Nigeria, which could make most real estate transaction illegal if there is no adherence to these provisions.
We will write more about the various laws guiding real estate in Nigeria on subsequent articles.