You have to verify every information given to you about any property you want to commit money into, otherwise, “you are on your own,” if your money is swept under the drain
– By Ranti Adedeji
Not many people are impressed by police investigations because they, most times, fall below expectations, or delayed indefinitely. Similarly, investigative journalism has been reduced to its lowest ebb by the social media; and bloggers, who write mainly from sheer imaginations and unfounded speculations in order to make quick money. However, a shrewd real estate investor or individual property owner cannot avoid being involved in reasonable investigation, when acquiring properties; otherwise, he would be playing with his money. Some key due diligence he needs to conduct before committing money into any property are discussed here.
Identify the owner and confirm its genuity.
Be cautious of agents who are preventing you from meeting the owner of the property on the pretence that he or she is dead.
I heard a story about a transaction that would have sent the agents involved to jail. A woman had approached an agent with a C of O in order to help her sell a property, claiming that her husband is dead. The agent soon swung into action and found a buyer for the property. At the point of payment, the buyer asked his lawyer to prepare a Deed of Assignment, which the seller and the buyer with some witnesses would endorse before payment is made.
The woman had arranged for a witness but the lawyer insisted that he must be a relation of the deceased husband. At that point, she became reluctant to go ahead with the transaction, but the buyer’s persistence made the lawyer to carry-out more investigations about the real owner. He later discovered that the woman was not the real wife, but only a junior sister to the wife of the deceased. She had stolen the C of O, but the lawyer’s insistence to see a relation of the deceased saved the situation. Do not be in haste to pay for any property; land or house, until you are satisfied with the ownership.
Cross-check available title documents on the property.
For property that is claimed to have C of O, Consent or other seemingly genuine documents, you have to verify them by obtaining the True Certified Copy (CTC) of such documents in order to be 100% certain that what you are paying for is original. Some C of O are cloned and presented to unsuspecting buyers as original.
Confirm the status of the land to determine what extra-cost you have to bear in perfecting the title. Always buy property that is free from every encumbrance; especially acquisition or revocation. If it is under acquisition, you will have to pass through the process of Ratification before you can obtain C of O for the property. Apart from being a very cumbersome process, you may have to pay more to the government than you have paid to the original owner. Worst of all are properties under revocation; this is a no-go area, because the government will not entertain any application for title on such land and may be turned into rubbles one day.
Compare the selling price with other property in the same neighbourhood, this will help to discover the value of the property. Find out if the property is being sold below actual market value. The property owner or his agent may be privy to some information they want to hide from potential buyers; this gimmick is to sell the property in a disposable price.
I had an experience where somebody was persuaded to buy four plots of land at a relatively cheap price in a prime location in Lagos. He later discovered that the land is part of an expanse of land owned by an organization; and the owner had obtained the C of O for a very long time. The man lost all he had invested in the property, in addition to what he spent on litigation. He should have seen the handwriting on the wall when he was asked to pay N3 million for a plot of land whose value is close to N7 million.
If you are buying a property from real estate companies, find out if there is any additional payment apart from the cost of the property.
Some companies that are selling land or houses within their estates have extra charges embedded in the transaction, which come in various names like development levy, survey fee, legal fee, allocation charges and some others. It is not strange to find some of them, or their marketers, hiding these extra costs to make the estate attractive to potential buyers. Painful enough, these additional costs could he high enough to buy a full plot elsewhere.
And if you are buying a property that has C of O, check if the ground rent has been paid up-to-date, otherwise you will be made to pay at the point of registering the property, which could be an impediment to the transaction process.
Consider the topography of the land.
This is because if it is in an area that is prone to flooding, you might be investing in a property that would be damaged by water and your investment swept away in jiffy. What in the waterline in front and back of the house? What is the height of the property from the road level? If it is considerably low than the road level, be sure that water will take-over one day.
What is the “Omo Onile” interest or requirements on the property? Although, the state government had banned the activities of “Omo Onile” within the state, yet, they are still coercing property owners to part with various amount of money under different names ranging from “Owo foundation,” “Owo Ilagbe,” “Owo Iwoko,” “Owo youth,” and other strange names. In fact, some community leaders still collect “Owo renovations” once they are aware that the property has been transferred to a new owner. This could be as high as N5 million in some locations.
Ask the local town planning or building control agencies.
If you are buying a property that requires extensive renovation works, you have to contact the district offices of the town planning to know the chargeable fees for renovations. Your assessment will depend on if you are applying for change of use, in which you are changing from residential to commercial; or change of volume, in which you are changing the number of units or floors in the building. Normal renovation attracts less charge.
However, if you do not obtain necessary permit before you start work, you will attract sanctions from LASBCA, which may lead to sealing-off your premises until all penalties are paid in full.
On a final note, do not take any property transaction on the face-value and never be in haste to commit money into any transaction until you are convinced of its authenticity. If you cannot carry-out all due diligence on your own, engage the services of a lawyer, an estate surveyor, or another person that is versed in the real estate business. This is because, once you pay, it becomes very difficult to retrieve your money if the transaction go awry at any point.
We may also be of assistance, in case you need our services.
Contact: 08137843401, 08023673113