Imagine finally buying that beautiful, fully furnished house in a strategic location in real estate in Lagos. The stress of searching is over, and you feel a wave of peace of mind. But what if that feeling of security is the first step down a path to financial ruin?
One of our clients almost lost a staggering ₦255 million because he trusted the surface-level details of a beautiful apartment.
If he hadn’t done his due diligence, he would have signed a seemingly perfect contract, only to see the legal ground crumble beneath him, leading to a total loss of his entire investment.
At our law firm, our comprehensive search uncovered hidden issues that a basic check would never have revealed. This case is a perfect example of how the devil is truly in the details.
In this article, we’ll share exactly what we found, so you know how to protect your real estate business and avoid a similar fate.
1. Legal Due Diligence Explained
Legal due diligence is a meticulous search to ensure you’re buying the right property from the true owner.
For any real estate investing for beginners or seasoned pro, this means verifying ownership, root of title, location, and structural integrity.
Without it, you are not buying a property; you are buying legal issues.
Also Read: Conquer the Nigerian Real Estate Market: Master Due Diligence and Invest Like a Pro!
2. The Case
A returning client called us, excited about a house he wanted to purchase. As his trusted real estate lawyers in Lagos, we immediately sprang into action, determined to ensure his enthusiasm didn’t blind him to potential problems.
3. What We Did
- Drafted an Offer Letter: We drafted an offer letter that was accepted, and immediately requested for all property documents.
- Reviewed the Documents: We carefully reviewed the Certificate of Occupancy (C of O in Nigeria), planning permit, and all related approvals.
- Conducted a Land Registry Search: We conducted a comprehensive search using the C of O to uncover its history.
- Engaged a Surveyor: We hired a surveyor to pick the property’s coordinates and confirm the location on the ground matched the official survey plan.
- Conducted a CAC Search: We searched the Corporate Affairs Commission since both the seller and agent were companies, verifying their existence and status.
4. What We Discovered: A Web of Deception
Our meticulous investigation peeled back the layers of a seemingly clean deal, revealing a series of dangerous red flags that would have led to a catastrophic loss.
- Illegal Units: We discovered that the developer built more units than were approved by the Lagos State Physical Planning Permit Authority (LASPPPA). A purchase here would have put our client directly in the path of LASBCA demolition.
- Missing Deed: The seller only had a receipt of payment, which is completely worthless in court for proving ownership. A receipt only proves payment, but a Deed of Assignment transfers legal title.
- Fraudulent Sale: The seller’s receipt showed they had bought more units than the developer was even entitled to sell. This was a classic case of real estate scams in Nigeria.
- Structural Integrity Issues: The surveyor’s report came back clean on the location, but we soon discovered that LASBCA had already marked the building for compliance issues.
5. Our Advice
We gave our client one piece of advice: proceed only if the original owner signed a new Deed of Assignment to him directly, with protective clauses in a contract of sale with the seller protecting him from the existing compliance issues.
This was his only way to avoid the looming financial disaster.
6. Negotiation That Never Made It to Execution
When we scheduled a meeting with the seller to sign a new contract with our protective clauses, they refused. They claimed they couldn’t take responsibility for the discrepancies. We advised our client to walk away from the ₦255 million deal, and he did.
If our client had not insisted on these watertight contracts, he would have paid, and the dominoes would have fallen, one by one. The building would have been demolished, and he would have lost every dime with no legal recourse.
7. Lessons Learnt with Checklists
- Don’t Trust a Company’s Name Alone: Believing a company’s name guarantees peace of mind is the first step toward falling victim to real estate scams in Nigeria.
- Go Beyond Surface-Level Searches: A land registry search is not enough. You must hire an experienced real estate lawyer in Nigeria to uncover the hidden risks.
- Never Rely on Oral Statements: An agent’s word is a whisper; only a registered Deed of Assignment is a shout in the halls of justice.
- Engage Experts: The devil is in the details, and the only ones who know how to find them are real estate lawyers and surveyors.
- Never Pay Without a Green Light: Don’t pay for a property until your property lawyer in Lekki or Lagos gives you the green light.
- Insist on Watertight Contracts: If the seller has nothing to hide, they won’t refuse to sign a contract with protective clauses.
Conclusion: Justice is in the Details
If there’s one takeaway from this ₦255 million case, it’s this: buying a house is the biggest investment you’ll ever make, and a mistake you don’t catch today can cost you millions tomorrow.
Just doing due diligence is never enough. You need a contract to also protect you.
The slippery slope from a dream property to a legal and financial nightmare begins with one wrong assumption—that a good deal is all you need.
You buy a house, you miss a key detail, the seller disappears, your house is marked for demolition, and you lose your entire investment, your reputation, and your peace of mind.
Don’t do it blindly. Do it smart. Protect your peace of mind with proper legal due diligence and water tight contracts.
More importantly, always work with an experienced real estate lawyer who knows exactly where to look.
That’s why at Charis Legal Practice, we offer our comprehensive legal due diligence services and contract drafting to real estate investors like you who are particular about their assets in real estate in Lagos and real estate in Abuja.
If you are ready to buy a property and don’t know where to start, you can click here to get started and safeguard your investment!. If you need due diligence for your property, you can click here.
And if you have any questions, you can write them in the comments section below and we will attend to them. Happy reading!