Recent statements from the Commissioner for Physical Planning and Urban Development in Lagos State, Dr. Olumide Oluyinka, underscore a critical point; “only properties with valid planning approvals will be compensated for demolition in the construction of the Lagos-Calabar coastal road”
This revelation serves as a stark reminder of the necessity for due diligence when purchasing land. Your main objective in a real estate due diligence process will be to analyze the risks and opportunities specific to the asset under consideration. This includes considering the risks and opportunities of the location of the real estate, the legal risk, the capital procurement risk, investment cost risk, profit fluctuations risk, property management risk, cluster risk, environmental risks, among others.
One of the best quotes I’ve ever come across about real estate investing is from Franklin D. Roosevelt, the 32nd President of the United States. He once said, “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world. and that sums it up accurately, but my focus on this quote is the part where he said “Purchased with common sense“
It just makes sense that if you’re getting involved in a real estate deal, you should thoroughly check out and analyze every aspect of it, both practically and legally, before making a purchase, lease, or financing decision. This process, known as due diligence, is the key to every successful real estate transaction. due diligence process helps give you the investor the information needed to confidently close a transaction
If before completing the real estate transaction you as an investor findout that there are issues with the information on the property provided by the seller you have the opportunity to re-negotiate or walk away from the transaction. especially when the value placed on the property seems too good to be true, that could be an indication that it’s actually too good to be true.
Engaging professionals in due diligence
To carry out due diligence on a property, you can either do it yourself or engage professionals possessing the necessary expertise to help identify any financial or legal dangers that your investment may present. A real estate transaction can be simple or complex and the more complex , The more complex the deal becomes, the more experts you may need to bring on board to assess your risk exposure to the investment. A variety of professionals in the real estate industry you can engage include but are not limited to
1) Land surveyors to determine if the real estate is free from government acquisition, match the coordinates on the survey plan attached to the title document, verify property boundaries, encroachments, and the compliance of existing structures with the permits and zoning regulations;
2) Legal practitioners to examine and review title documents to the property at the relevant land registry, inspect relevant government permits and approvals, review and negotiate the title documents and agreements (contracts and deeds), and supervise the entire transaction process;
3) Architects to compile a snagging list, to confirm existing “as-built” conditions, to conduct design feasibility assessments for any contemplated land development or building renovations, to assess the property’s compliance with building plan approval.
Professionals in the field possess the expertise and experience to thoroughly examine the provided (legal) documents, ensuring their authenticity, accuracy, and compliance with relevant laws. Engaging the services of these professionals is crucial in order to mitigate the risk of potential financial loss associated with entering into a real estate transaction without their involvement. Professionals in the field possess the expertise and experience to thoroughly examine the provided (legal) documents, ensuring their authenticity, accuracy, and compliance with relevant laws. Engaging the services of these professionals is crucial in order to mitigate the risk of potential financial loss associated with entering into a real estate transaction without their involvement.
Due diligence for properties in Lagos state
When buying land in Lagos State, it’s imperative to verify its legality and ownership status. Your title to a parcel of land or a real estate asset is your proof of ownership of that land or real estate property. In Nigeria, your title can either originate from a deemed right of occupancy, customary right of occupancy or a statutory right of occupancy. More often than not, there are situations where an entity would have a customary right of occupancy on a property while another entity would have a C of O on the same property. Another instance is where there are two or more C of O on the same parcel of land.
Now let’s consider some document’s peculiar to Lagos state real estate
Survey Plan from the Office of the Surveyor General: This document outlines the precise boundaries and dimensions of the land, ensuring clarity on its location and size.
Certificate of Occupancy (C of O) from the Lagos State Government: The C of O is a legal document that grants the holder the right to use and develop the land for a specified period, typically 99 years.
Deed of Assignment or Conveyance: This document transfers ownership of the land from the seller to the buyer, providing proof of legal transfer of title.
Governor’s Consent: Lagos, being a state with specific regulations, requires Governor’s Consent for certain property transactions. This document signifies the state government’s approval and is particularly important for investors looking to secure their interests in the dynamic Lagos real estate landscape.
Approved Building Plan from the Lagos State Physical Planning Permit Authority (LASPPPA): Before commencing any construction activities, it’s essential to obtain approval for the building plan to ensure compliance with zoning regulations and safety standards.
Charting Information Certificate: Charting information certificate helps identify your land status and it is your guarantee of a verified and government – acquisition – free land purchase
Tax Clearance Certificate: In Lagos, where regulatory compliance is paramount, a Tax Clearance Certificate is necessary to confirm that the property owner is up-to-date with tax obligations.
Contract of Sale/Purchase Agreement: This document outlines the terms and conditions of the property sale, protecting both buyers and sellers. In Lagos, where real estate transactions are fast-paced, having a comprehensive contract is essential.
In conclusion
In the bustling real estate market of Lagos, knowing your way around essential documents is absolutely crucial.
Fips Multilinks, a major player in Lagos’s real estate scene, emphasizes the vital role of due diligence in protecting investments, fostering transparency, and maintaining a healthy real estate environment.
Whether you’re eyeing land or houses in Lagos, having all the right information and paperwork sets you up for success in this dynamic market.
Due diligence is the most important process in any real estate investment, It’s like shining a bright light into every nook and cranny of a property to uncover any potential red flags that could eat into your investment and profits down the line. By doing your homework thoroughly, you can seal the deal with confidence, knowing you’ve covered all your bases.