Have you ever felt pressured to buy a property in Lagos before it’s “snatched up”? That sense of urgency, often created by some real estate agents, is a classic trick. But here’s the uncomfortable truth: rushing your due diligence in real estate business is a direct path to devastating financial loss. Imagine losing your entire investment, facing legal battles, and even a criminal record – all because you skipped a crucial step.
As real estate lawyers in Lagos, we act as your personal detectives, meticulously uncovering hidden risks in property transactions. We’ve seen it all, from mismatched documents to outright fraud, and the shocking revelations we discover can save you millions. Our job is to advise you, and the smart investors listen. Those who don’t often find themselves trapped in a nightmare, wishing they had taken that advice.
Recently, our firm encountered a fascinating case that perfectly illustrates this point. A client was about to invest a substantial sum in a real estate in Lagos property, pressured by an agent creating a false sense of urgency. In this article, we’ll pull back the curtain on the alarming red flags we uncovered, revealing the tactics of real estate scams in Nigeria and what we did to protect our client from a potential financial catastrophe.
Specifically, we will discuss the following:
Table of Contents
The Case: When a “Good Deal” Rings Alarm Bells
It started with a routine call. A shrewd investor was eyeing a prime real estate in Lagos location and, recognizing the importance of real estate law, engaged us to conduct due diligence. We eagerly accepted, asking for property details and the agent’s contact. That’s where our detective work truly began.
The agent’s immediate refusal to share documents, claiming the owner wanted to meet the buyer first, was the first flicker of a red light. While security is valid, his inability to even provide the seller’s name was a glaring warning. When we finally had a meeting with the supposed seller, he claimed he didn’t have the title documents readily available. And when the promised “documents” finally arrived, all we received were survey plans, receipts, and a building approval receipt – no proper legal title.
What We Discovered: A Web of Deception
Our meticulous due diligence process quickly exposed a series of critical issues that, if ignored, would have led our client down a perilous path.
- Unmatched Identity: No Deed of Assignment, No Ownership.
The most alarming discovery: the name on the receipts and survey plan was completely different from the seller’s. Not a relative, not even a similar initial. This immediately screamed: no valid Deed of Assignment transferring ownership to this seller. This single red flag alone should have stopped the transaction dead in its tracks.
Also Read: The Complete Guide to Understanding a Deed of Assignment: Everything You Need to Know
2. Mismatched Location: Where Exactly is the Property?
We engaged a surveyor, a critical step in real estate investing strategies. His report revealed a significant discrepancy between the property’s recorded location and its physical location. While some older surveys can be less precise, the surveyor added a crucial caveat: the seller needed to confirm ownership. This isn’t just a minor detail; it’s the difference between buying land and buying a headache.
3. Non-Cooperation: Evasiveness From All Sides.
When confronted with these discrepancies, both the seller and agent became evasive. The seller couldn’t provide any legal authority to sell – no Letter of Administration, no family consent for communal land. Then, the agent suddenly announced the family was involved and the price would increase. This wasn’t negotiation; it was desperation to push a deal.
4. Agent’s Ignorance: A Fundamental Lack of Knowledge.
Shockingly, the agent, supposedly representing the seller, couldn’t confirm the precise address of the property beyond old, vague descriptions. An agent who doesn’t know the exact location of the property they’re selling is not just unprofessional; it’s a huge red banner waving a warning about potential real estate scams in Nigeria.
5. Regularization Area.
Our surveyor’s report also revealed the property was in a regularization area. This means the government had previously acquired the land and later released it for private use, but with a strict condition: title registration is mandatory to establish legal ownership.
Also Read: Application for C of O and Governor’s Consent
Given the seller had no legal title, it was highly probable the true owner had already regularized it in their name, making this seller an imposter. This ties directly into understanding the crucial process of obtaining a C of O in Nigeria for clear land ownership.
What We Did: Protecting Our Client from Financial Ruin
Armed with undeniable evidence of identity mismatch, lack of legal authority to sell, and location discrepancies, we presented our comprehensive due diligence report to our client. Our advice was clear: proceed only if the seller could provide valid legal authority and proper identification.
Predictably, no such documents materialized. Our client, though initially disappointed, quickly realized the immense value of our intervention. He didn’t lose N30 million to a shady deal. In fact, he could have lost much, much more.
The Avoidable Nightmare: What Our Client Stood to Lose
Had our client ignored our advice, the “slippery slope” of consequences would have been catastrophic.
- Total Loss of Capital: A Million Naira Down the Drain.
Without a valid title, the real owners could emerge at any time, demanding he vacate their property. His payment to a fraudulent seller would be irrelevant. In real estate law, you cannot give what you do not have. He would either pay again, or lose his entire investment.
2. Damaged Reputation: Branded a Thief.
Word would spread. Neighbors, relatives of the real owner, and even fellow investors would view him as a trespasser or, worse, a thief. How do you explain that you were simply an unsuspecting victim of a real estate scam in Nigeria to everyone?
3. Accessory to Fraud: Legal Ramifications.
The real owners could have him arrested. Ignorance of the law is no excuse. He could face charges as an accessory to fraud, while the real fraudsters vanish. Many fraudsters in real estate in Lagos are currently on the run, wanted by the police.
4. Loss of Peace of Mind: Sleepless Nights and Stress.
A court case and police investigation bring unimaginable mental stress. “Will I go to jail? What about my family?” These questions would haunt him, affecting not just him but his entire family.
5. A Losing Court Battle: Years of Litigation.
Even if it avoided criminal charges, the real owners could sue for trespass. Based on our findings, he would undeniably lose. Courts are not sentimental; whether he paid is irrelevant. Losing means more financial strain, a further hit to his reputation, and years of draining litigation, especially given how long real estate law cases, particularly land disputes, can drag on in Nigeria. We’re talking at least two years, minimum, for even a “fast” case.
Red Flags: Your Shield Against Real Estate Scams in Nigeria
As an investor navigating the complexities of real estate business in Nigeria, these red flags are your vital warning signs:
1. The Ignorant Agent: If an agent doesn’t know the exact property address, flee. It’s a fundamental failure.
2. Lack of Transparency: Any seller reluctant to provide identification or proper documents has something to hide. A legitimate seller has nothing to fear.
3. Dishonesty About Documents: Promises of documents that never materialize, or excuses for not having them readily available, are clear indicators of deceit.
Lessons Learned: Empowering Your Real Estate Investing Strategies
1. Observe Behavior:
Pay close attention to the agent’s and seller’s body language and attitude during inspections. Look for suspicious behavior. Crucially, always request to see the certificate issued by the Lagos State Real Estate Regulatory Authority (LASRERA). It’s now illegal for any real estate agent or practitioner in Lagos to operate without LASRERA registration. This makes your verification process much simpler.
Also Read: LASRERA Frequently Asked Questions
2. Engage a Property Lawyer:
After you like a property, the very next step is to involve a real estate lawyer to conduct thorough due diligence. Never rely solely on an agent’s word.
3. Invest in Proper Due Diligence:
The cost of due diligence is minuscule compared to what you stand to lose. Someone can technically “possess” a property but lack legal title. Even if our client had received a Deed of Assignment in his name, it would have been worthless because the seller had no valid title to transfer. This is why understanding real estate law is paramount.
Also Read: Conquer the Nigerian Real Estate Market: Master Due Diligence and Invest Like a Pro!
Conclusion: Your Peace of Mind in Nigerian Real Estate
Due diligence in the Nigerian real estate market is non-negotiable, regardless of how appealing the property or agent may seem. It’s not the real estate agent’s job to verify title; their duty is to sell. Your responsibility, as an astute investor, is to conduct thorough due diligence, and the only way to do that effectively is by engaging an experienced real estate lawyer in Nigeria.
As we said, you need a lawyer-detective for your real estate needs. The rate of fraudulent transactions, especially for real estate in Lagos, is alarming. Due diligence is your impenetrable shield.
At Charis Legal Practice, our core value is providing peace of mind to our clients by proactively avoiding and mitigating risks. We specialize in real estate law, assisting individuals, investors, and businesses with property transactions worth N20 million and above, ensuring they are smooth and legally sound.
Our services include:
- Comprehensive Due Diligence on property transactions
- Drafting and reviewing real estate agreements
- Title verification and registration (including guidance on C of O in Nigeria and Deed of Assignment)
- Compliance with Lagos real estate regulations
Don’t risk costly mistakes or fall victim to real estate scams in Nigeria. Let our expert legal team guide you.
Ready to secure your investment?
- If you’re looking to conduct comprehensive due diligence on a property, click here to get started.
- If you’ve already started a transaction and are unsure about due diligence or property documentation, click here to connect with one of our team members.
If you have any questions, you can type them in the comments section below and we will attend to them. Happy reading!