Some medications have been advertised as saving lives from time immemorial but permit me to say in this article, for generations, proper documentation has been saving family assets and legacies.
Can you imagine what it would feel like for someone to lose his or her family inheritance in one day because of some simple paperwork?
It’s better not imagined I would say. If one could do anything to avoid such a nightmare, one had better do it.
So in this article, we’ll discuss how proper documentation saved a family in a court matter in Lagos state.
Specifically, we will discuss the following:
- Understanding Proper Documentation in Real Estate Investments
- Types of proper documentation in real estate
- Benefits of Proper Documentation in real estate
- Case illustration
- How proper documentation saved the family
- Impact of Proper Documentation
- Instances where buyer can lose property because of lack of proper documentation
- Lessons learnt
- Conclusion
Understanding Proper Documentation in Real Estate Investments
You may begin to ask yourself, “what’s really the big deal about proper documentation in real estate investment?” Is it a serious matter?
For you to fully understand proper documentation in real estate investment, you need to first understand what proper documentation is.
Proper documentation are written records of a product, process, or project that explain what was done, how it was done, and why.
Think of it like keeping receipts for your purchases just like your car. You make sure you have and keep all the documentations necessary – it’s the proof that you bought the car and you’re now the rightful owner.
In real estate, proper documentation includes written records of your land transactions, including the buyer and seller’s details, land particulars, cost, and responsibilities. It’s like having a paper trail that proves ownership and transfer of ownership.
In fact, it includes the history of how the seller even came to become the owner of the property.
Benefits of Proper Documentation in real estate
So, why is proper documentation so important? Here are just a few benefits:
1.Protects ownership:
Property documentation protects your right as the owner of the property, prevents court matters challenging your right as the owner of the property, and makes real estate transactions run smoothly.
2. Legal evidence:
Property documentation serves as proof of your legal ownership that can be used as evidence in court to prove your ownership in case there is any dispute.
3. Prevents fraud:
When done right, Property documentation can help protect you from fraudulent transactions and disputes by ensuring that there’s no room for any defects or Loopholes that will give room for fraudulent transaction in the future.
4. Avoids delays:
Property documentation helps avoid delays in the transaction process with the seller. How? Everything is clear on paper.
The seller has all the necessary documents proving ownership of the property and how he got the property.
5. Instills confidence:
Just as the Police officer pulls you over and asks for your vehicle particulars, and you confidently hand them over, that is the same feeling you have when you own a property and you have all the documentations regarding that property.
6. Ensures compliance:
When you have proper documentation, you will be able to obey the law of the state regarding lands and properties.
One such law is the Land Use Act that makes it important for property transactions to be registered at the lands registry.
To do this, it’s either you’re applying for a certificate of occupancy or Governor’s consent. You would usually apply for a certificate of occupancy when the property has never been registered with the lands registry.
But where there is a certificate of occupancy on the property already from a previous owner, then you’ll apply for Governor’s consent on the property.
This is to notify the government that the property has changed hands.
This means that before you can apply for Governor’s consent, there must already be a C of O covering the property or you have a deemed grant of the C of O.
If there’s no C of O covering the property, you cannot apply for Governor’s consent. The property has to first be registered under the lands registry.
So if you don’t get the certificate of occupancy or seek the governor’s consent for any land transaction, you will be disobeying the law.
This can have serious consequences. In fact, this requirement by the government is often in the best interest of the buyer.
Also Read: Application for C of O and Governor’s Consent
Types of Proper Documentation in Real Estate
Now that we’ve covered the importance of proper documentation, let’s look at some examples:
1.Certificate of Occupancy (C of O)
This document is usually issued by the government to the very first owner of the property and usually grants the holder the right to use the land for a duration of time. Imagine buying a brand-new car directly from the manufacturer.
Just as the car’s manufacturer issues a certificate of origin, the government issues a Certificate of Occupancy to the original landowner.
Please note however, that it is important to ensure that the property that you get a certificate of occupancy on does not have any hidden legal issues because getting a certificate of occupancy on a property will not cure any defects in title.
2. Deed of Assignment
This transfers ownership of a property from the seller to the buyer. It includes details about the property, the parties involved, and the terms of the transfer including your responsibilities with the seller or buyer etc.
Think of buying a used car from a private seller and the private seller gives you the Car’s title transfer document. So also there must be a document transferring the ownership of the land to you.
For it to be effective and legally binding on you and the other party, it must be prepared by an experienced real estate lawyer because each transaction usually has its unique features, and is then signed by both parties. Note that you cannot apply for a Certificate of Occupancy or Governor’s Consent if you do not have this important foundational document.
Also Read: The Complete Guide to Understanding a Deed of Assignment: Everything You Need to Know
3. Survey Plan
This is like a detailed map that shows the boundaries and dimensions of the property purchased.
Imagine you’re buying a car you requested for with unique features, and then the manufacturer gives you a map of how the car looks like on the outside. That’s exactly how the survey plan for a land is.
It shows the property’s boundaries, dimensions, and any unique features, ensuring you know exactly what you’re buying.
The seller selling the property to you should have a copy of this plan in his or her name. After purchasing the property, it is important that you also have a copy in your own name.
4. Contract of sale
The contract of sale is also a legally binding document that outlines the terms and conditions of a real estate transaction.
It ensures both parties are on the same page before finalizing the sale.
It usually includes a detailed description of the property being sold, the agreed-upon price for the property, how and when the payment will be made either outright or installmentally and other conditions that must be met before the sale can be completed.
However it doesn’t transfer ownership of the property. It is the deed of assignment that does after all conditions have been met and payment has been fully completed. Having these documents at your disposal proves ownership and transfer of the property from the seller to the buyer and can save you from unnecessary disputes or court cases in the future.
Illustration of case (Late Mr. Bandele Eletu Gbadamosi’s Family vs. Ojomu Chieftaincy Family)
Let’s consider this real-life case where proper documentation saved a family in Lagos state from losing their property in a court case. Here’s what happened.
Background
In 1977, Late Mr. Bandele Eletu Gbadamosi bought 254.558 hectares of land from the Ojomu Chieftaincy Family in Osapa Village, Lagos state, via a deed of Conveyance and he went ahead to register the deed at the lands registry.
A deed of Conveyance is the same thing as a deed of assignment. It was only commonly used as deed of Conveyance in the olden days.
However, in 1981, the Lagos state government revoked the Ojomu Chieftaincy Family’s ownership and took over the land.
Court Cases
The Ojomu Chieftaincy Family sued the Lagos State Government and won back the land. They then entered into a settlement agreement with the government, which stated the portion of land belonging to the state.
The Ojomu Chieftaincy Family later sued Late Mr. Bandele Eletu Gbadamosi’s family, claiming they were trespassing on their land.
As at this time, Mr. Bandele Eletu Gbadamosi had passed on and his family was now enjoying ownership and possession of the property he bought from the Ojomu Chieftaincy family by way of inheritance.
High Court Decision
The High Court ruled in favor of the Ojomu Chieftaincy Family, awarding N500,000 in damages against Late Mr. Bandele Eletu Gbadamosi’s family. The court stated that Late Mr. Bandele Eletu Gbadamosi’s family:
1. Failed to challenge the government’s takeover of the land in 1981.
2. Couldn’t link the deed of Conveyance to their family.
3. Didn’t have the right to the land, as the Ojomu Chieftaincy Family had been granted a right of occupancy by the Lagos State Government. The right of occupancy is also the same as the certificate of occupancy.
Court of Appeal and Supreme Court Decisions
The Court of Appeal upheld the High Court’s decision, but the Supreme Court overturned it.
The Supreme Court ruled that Late Mr. Bandele Eletu Gbadamosi’s family had the right of ownership to 10 hectares of the land, citing:
1. It wasn’t logical for the government to return land already transferred to another person.
2. The Ojomu Chieftaincy Family sold the land to Late Mr. Bandele Eletu Gbadamosi in 1977 and couldn’t reclaim it.
3. The lower courts made mistakes in their judgments when they said Late Mr. Bandele Eletu Gbadamosi’s family did not challenge the Lagos state government on the revocation of the land when in fact, they did separately 2 years after the Ojomu Chieftaincy Family challenged the Lagos state government in 1981.
4. A settlement agreement between Late Mr. Bandele Eletu Gbadamosi’s family and the Lagos State Government awarded 10 hectares of land to Late Mr. Bandele Eletu Gbadamosi’s family.
The Supreme Court also awarded N200,000 in damages against the Ojomu Chieftaincy Family as compensation to Late Mr. Bandele Eletu Gbadamosi’s family.
How Proper Documentation Saved The Family
So how did proper documentation save the family? Here are the key ways proper documentation helped:
1. Deed of Conveyance:
Late Mr. Bandele Eletu Gbadamosi’s family had a valid deed of conveyance that proved Late Mr. Bandele Eletu Gbadamosi purchased the land from the Ojomu Chieftaincy Family. The deed of conveyance is equivalent to the deed of assignment earlier discussed in this article.
This document was registered at the Lands Registry, providing a clear record of ownership and so, the Ojomu Chieftaincy Family could not lay claim to the portion they already sold and legally transferred to Late Mr. Bandele Eletu Gbadamosi.
2. Registration at the Lands Registry:
The deed of conveyance was registered at the Lagos state Lands Registry. The land registry is where documents and records related to every land transaction are kept.
Late Mr. Bandele Eletu Gbadamosi when he was alive made sure he applied for Governor’s consent to his deed of conveyance on the property.
Remember our proper documentation benefit that talked about legal compliance? It was because of this consent that the supreme court ruled that there was a transfer of ownership.
3. Clear chain of ownership:
The deed of conveyance and registration at the Lands Registry helped establish a clear chain of ownership, which was critical in resolving the dispute.
Late Mr. Bandele Eletu Gbadamosi’s family presented a deed of Conveyance that showed clear ownership of the property proving a transfer of ownership of the land from the Ojomu Chieftaincy Family to their Late Father; Late Mr. Bandele Eletu Gbadamosi.
4. Proof of purchase:
The deed of conveyance served as proof that Late Mr. Bandele Eletu Gbadamosi had purchased the land from the Ojomu Chieftaincy Family in 1977.
5. Support for the family’s claims:
The documentation submitted by Late Mr. Bandele Eletu Gbadamosi’s family, including the deed of conveyance and evidence of fighting for the land, supported their claims and helped to counter the Ojomu Chieftaincy Family’s arguments.
Impact of Proper Documentation
1. Protected property rights:
Proper documentation helped protect Late Mr. Bandele Eletu Gbadamosi’s family property rights and ensured that their interests were safeguarded.
2. Prevented loss of property:
The documentation prevented Late Mr. Bandele Eletu Gbadamosi’s family from losing their property, which would have resulted in significant financial and emotional losses.
3. Ensured justice:
The Supreme Court’s decision, which was based on the proper documentation, ensured that justice was served and Late Mr. Bandele Eletu Gbadamosi family’s rights were upheld.
Instances where buyer can lose property because of lack of proper documentation
When there’s no proper documentation, unfortunately, the seller can reclaim the property leaving the buyer at loss.
Looking at our case study, can you think of what could have happened if Late Mr. Bandele Eletu Gbadamosi’s family did not produce the proper documents? The Ojomu Chieftaincy family would have reclaimed the land.
Aside from this, there are other possible instances where a family or individual seller could have reclaimed the land. Let’s check out the following:
1.Lack of capacity:
If the seller is a minor, mentally incapacitated when he sold the land, and it is being proven in court, then it would not be proper documentation.
This is why it is usually advised that a lawyer handles your contract negotiation and Agreements.
2. Unauthorized agent:
It is possible that someone who is not the owner of the land can decide to sell on behalf of the seller without his permission.
If this happens, the buyer will not be able to claim ownership of the land.
There was a case where the daughter sold a landed property on behalf of the mother. The mother then discovered and stated that she did not give the authority to sell.
The court ruled that the land be returned to the mother.
3. Joint ownership:
If two or more people jointly bought a land and only one of them sold the property without the permission of the others, then there is possibility that the seller could reclaim the property and the buyer would lose the property.
For instance, the spouse of a married couple or one of the joint owners in a group investment.
4. Prior sale or encumbrance:
If the land has been used as collateral for a loan and then the seller who is the borrower sells the land to a buyer, the seller through the lender can later reclaim the land and the buyer would lose out totally.
5. No execution of contract:
If there was no documentation regarding the transfer of the land, then there is nothing to prove that the seller transferred the ownership of the land or if the seller did not sign the agreement, the seller can deny the transfer of the property to the buyer by claiming that he did not sign any document.
Lessons Learned
As a buyer, you can now see that you’re more on the losing side if you don’t ensure you do proper documentation and comply with legal requirements of land ownership. This is why I advice that you:
1.Engage the services of an experienced real estate lawyer for any real estate concerns or clarification and to negotiate on your behalf during your negotiations with the seller
2. Conduct comprehensive due diligence before entering into any real estate transaction.
This will save you from buying property that has been compromised or buying from the wrong seller or worse still, a revoked property.
Imagine if the land at Osapa was not part of the property that had been excised by the state government. Late Mr. Bandele Eletu Gbadamosi’s family would not have been entitled to anything.
It is when all is well with the outcome of a comprehensive due diligence, that is, no faulty backgrounds with previous owners or the present seller that you can assured you have proper documentation.
Having a deed of assignment will not cure defects in title.
Also Read: How We Saved Mr. A From A ₦30 Million Lagos Real Estate Scam
3. Ensure you have proper documentation drafted. The deed of Conveyance and the terms of agreement reached between Late Mr. Bandele Eletu Gbadamosi and the Ojomu Chieftaincy Family did save the day.
What if there was no proof to show that there was a land transaction?
4. Review every documentation with your real estate lawyer to ensure they’re in your favour.
5. Comply with the government regulations. Register the transaction with the lands registry. Late Mr. Bandele Eletu Gbadamosi ensured that he registered the deed of Conveyance.
If it was not registered, the court would not have recognised him as the legitimate owner of the property and his family would have lost the property.
Conclusion
Proper documentation is not just a formality; it’s very key in any real estate transaction.
As you can see in the case study, it can be the difference between owning your property and losing it.
You cannot choose to rely on oral negotiation and agreements like you would do at a grocery store or at the nearest open market close to you because you’re dealing with land and land is fixed.
You cannot take it home with you after buying it.. If you rely on oral agreements, the seller can later deny ever making any agreement with you and this will now lead to unnecessary disputes and quarrels.
To avoid issues like this, it’s why I say that it is important you get proper documentation for that property.
And only an experienced real estate lawyer can effectively handle them for you so that your ownership rights will be well protected, you can avoid any future court disputes, and ensure compliance with regulations.
As a buyer or investor, it’s crucial to prioritize proper documentation to avoid costly mistakes.
At Charis Legal Practice, we provide expert legal services for real estate transactions, including comprehensive due diligence, contract drafting, and review for real estate deals worth twenty million naira (N20,000,000) and above in Lagos, Ogun, Oyo and Osun states.
If you need any of our services, you can visit and contact us from our website here and we will attend to you.
Contact us today to ensure your real estate investments are secure.