Investing in luxury real estate in Lagos or real estate in Abuja is a monumental achievement.
But can you imagine the crushing devastation of discovering your dream investment was a mirage, a complete sham that cost you millions?
This nightmare almost became Mr. A’s reality in Lagos. Luckily, his foresight to engage our law firm’s comprehensive due diligence service was the single decision that pulled him back from the brink of a ₦30 million loss.
In his own words:
“This firm just saved me 30 million naira after a detailed due diligence report. I was advised not to move forward with the purchase of a land that has no title and deed of assignment is not even registered just to name a few. I recommend this service.”
In this article, we’ll unveil the harrowing story of how we safeguarded Mr. A from a significant Lagos real estate scam and the vital lessons you, as an aspiring or seasoned investor, can immediately apply.
Ignore these, and your own real estate investing strategies could lead to a similar financial abyss.
Specifically, we will discuss:
Table of Contents
In Nigeria, the risk of falling victim to real estate scams in Nigeria is alarmingly high. The only impenetrable shield against this pervasive threat is comprehensive due diligence. Without it, you’re walking into a minefield blindfolded.
What Exactly is Comprehensive Due Diligence? Your Non-Negotiable Safeguard
Comprehensive due diligence is a thorough, in-depth investigation and verification of every legal, financial, and physical aspect of a property before you commit to any transaction or make a single payment. It’s not just a suggestion; it’s an absolute necessity.
Think of it as doing your most critical homework before making a life-changing decision.
Would you buy a car without checking its history, condition, and registration? Of course not! You’d insist on verifying it’s in good shape, has no hidden problems, and is truly worth the price.
Comprehensive due diligence in real estate is precisely that, but with far higher stakes. It means you are:
- Verifying the seller’s true identity and legitimate ownership – because buying from the wrong person spirals into immediate legal woes.
- Checking for any existing legal issues, encumbrances, or debts attached to the property – ignoring these means inheriting someone else’s costly problems.
- Physically inspecting the property to confirm its state and boundaries – because what’s on paper might not match reality, leading to boundary disputes or unusable land.
- Assessing all likely risks and pitfalls – foresight prevents regret and protects your entire real estate business.
Especially in Lagos real estate, comprehensive due diligence is the single most important step for buyers and real estate investment trust investors. It directly helps you:
- Identify potential land risks and disputes: Without this, you could invest in land already claimed, pushing you into endless litigation.
- Uncover hidden liabilities and avoid falling victim to scams: Overlooking this makes you an easy target for fraudsters.
- Ensure compliance with regulations for developed properties: For instance, without verifying building approval, your structure could face demolition, turning your investment to rubble.
- Enjoy a secure investment and peace of mind: The absence of this peace means constant anxiety over your hard-earned money.
In any real estate purchase without comprehensive due diligence, anything can happen—and usually does, leading downhill fast. As a real estate investor:
- You could be buying from an impostor, losing your money instantly.
- You could be buying a property in an illegal or government-acquired location, leading to forced demolition.
- You could be buying land that has already been sold multiple times over, trapping you in complex ownership battles.
- You could be buying a property actively embroiled in court disputes, meaning your investment is tied up indefinitely, draining your finances and peace of mind.
The list of potential pitfalls goes on and on. No savvy investor wants to inherit such problems, nor should you.
Also Read: Conquer the Nigerian Real Estate Market: Master Due Diligence and Invest Like a Pro!
Mr. A’s Case Study: How We Uncovered a ₦30 Million Scam
When Mr. A approached us, he was eager to invest ₦30 million in a Lagos property. He wisely requested our services to verify its authenticity – a decision that ultimately saved him.
He provided us with all the documents and information he had gathered. Our dedicated team of real estate lawyers in Lagos then launched a meticulous comprehensive due diligence investigation on the property.
What We Did – Your Blueprint to Avoiding the Slippery Slope:
1.Review of Documents: We meticulously scrutinized all documents Mr. A provided, including past Deeds of Assignment and attached survey plans.
A Deed of Assignment is the legal document transferring ownership; a survey plan defines the property’s boundaries. Missing a detail here is like ignoring a ticking time bomb.
2. Tracing the Root of Title: We diligently traced the ownership history of the seller, identifying all past owners. Failing to trace title leaves you vulnerable to buying from someone with no legal right to sell.
3. Verifying Title of Past Owners: We cross-verified the details of all past owners at the Lands Registry, the government database for property ownership. Skipping this step means trusting unverified claims, which is a direct path to litigation.
4. Search on CAC Portal: Upon discovering one past owner was a company, we conducted a search at the Corporate Affairs Commission (CAC) – Nigeria’s company regulator – to verify its authenticity. An unverified company in the chain can be the weakest link, leading to a broken chain of title.
5. Confirm Location of Property: We engaged a trusted surveyor to independently confirm the property’s physical location against the provided survey plan.
Reliance on seller-provided plans without independent verification is a common entry point for land fraud.
What We Discovered: Red Flags That Signaled a Catastrophe
Our comprehensive investigation unearthed critical issues that would have led Mr. A down a disastrous path:
1. Unregistered Title: We found that a company, a purported past owner, falsely claimed to have a registered title.
The registration number provided belonged to an entirely different individual. Proceeding would have meant investing in a property with a false claim to ownership, making your investment legally nonexistent.
2. Lack of Legal Title: Given the false registration and lack of valid documents, the company had no legal right to sell the property.
This meant the seller Mr. A was dealing with also had no legitimate right to transfer ownership.
Buying from a party with no legal right to sell means your money disappears with no legal recourse for ownership.
3. Broken Chain of Title: The property’s ownership history was fundamentally unclear.
We couldn’t establish how the purported company came to own the property before it was supposedly sold to the next person in the chain.
A broken chain of title is a direct indicator of potential fraud, where your ownership can be challenged at any time.
4. Inconsistent Address: The company’s address on the Deed of Assignment did not match the one registered with the Corporate Affairs Commission.
Such inconsistencies are glaring red flags that scream “scam alert!”
5. Wrong Location: Our surveyor’s report revealed the property’s actual location did not match the coordinates in the seller’s survey plan.
This is a classic tactic in real estate scams in Nigeria, where you pay for one plot but receive another, or nothing at all.
Mr. A was set to buy a ₦30 million property where the seller and all purported past owners lacked legal title. Even the company claiming a registered title was a fabrication.
The Due Diligence Search Report: Your Shield Against Loss
Based on our findings, we prepared a comprehensive due diligence report, detailing every step, observation, and our ultimate recommendation: Mr. A should not proceed with the purchase.
A due diligence search report summarizes all findings and unequivocally states whether the property is safe to acquire.
Following our advice, Mr. A was saved from losing a staggering ₦30 million. Imagine the sheer relief, mixed with the chilling realization of how close he came to financial ruin.
Consequences of Not Conducting Comprehensive Due Diligence: The Slippery Slope to Regret
Had Mr. A not engaged our services, his story would have spiraled differently, illustrating the devastating real estate scams in Nigeria that can befall unprepared investors:
1.Massive Financial Losses: He would have irrevocably lost a whopping ₦30 million, a sum that vanishes into the pockets of fraudsters.
2. Profound Emotional Stress from Legal Disputes: Instead of celebrating, he would have endured immense emotional trauma from a failed, fraudulent investment, facing endless, costly legal battles with no guarantee of recovery.
3.Crippling Investment Regrets: He would have regretted his entire foray into real estate investment, likely turning away from what can be one of the most lucrative real estate investing strategies if all necessary legal steps are taken.
His trust in the real estate business would be shattered.
Lessons Learned from Mr. A’s Story: Essential for Every Investor
Mr. A’s journey provides invaluable lessons for anyone eyeing real estate in Lagos or beyond:
1.Verify Ownership Rigorously: Before investing, ensure the seller possesses undisputed legal title.
This means confirming their right to sell and that no hidden surprises will surface later.
Failure to verify ownership is the first step down the path to legal disputes and financial loss.
2. Check Documentation Meticulously: Never assume legal documents are authentic.
As in Mr. A’s case, addresses, dates, and registration numbers can be fabricated.
Scrutinize all Deeds of Assignment, survey plans, offer letters, and contracts of sale. Blindly trusting documents is an open invitation for fraudsters to defraud you.
3. Research Property History Thoroughly: Understand the complete ownership chain. Research past owners, their relationships, and identities.
This uncovers hidden legal issues, like the inexplicable gap in Mr. A’s property’s history.
Neglecting property history means buying into someone else’s unresolved legal mess.
4. Inspect the Property Independently: Do not solely rely on the seller’s survey plan.
Always double-check the stated location and coordinates with an independent surveyor.
Trusting unverified location details is a common way to end up with a useless piece of land or no land at all.
5. Get Legal Expertise: This is perhaps the most critical lesson for real estate investing for beginners.
Engage a reputable law firm specialized in real estate law, such as a property lawyer in Lekki or top real estate lawyers in Lagos.
Also, collaborate with other essential professionals like surveyors. Attempting to navigate complex Nigerian real estate without expert legal and surveying guidance is a direct route to being scammed.
Also Read: 5 Common Legal Mistakes To Avoid When Buying a Property in Lagos
Conclusion: Secure Your Investment with Expert Guidance
Seeking legal help is not an option; it’s crucial to buying a scam-free property in Lagos.
At Charis Legal Practice, we offer our comprehensive due diligence services to sophisticated investors looking to invest a minimum of ₦30 million in real estate investment and who wish to strategically avoid getting caught in a real estate scam in Lagos.
We help you avoid the pitfalls and ensure your real estate business thrives.
If you need our team to conduct comprehensive due diligence for your property and prevent you from walking down the slippery slope of a bad investment, click HERE to get started.
Comprehensive Due Diligence Service starts from N700,000
This Is How Charis Legal Practice Can Help You!
- Discovering Legal Issues: Benefit from a thorough title investigation to identify ownership clashes, rightful property claims, or illegal claims. Without this, your ownership can be challenged at any time.
- Verifying Property Details: Maximize the expertise of a surveyor confirming the property’s location with the description on documents. Ignoring this means you might be buying a phantom property.
- Review Legal Documents: Benefit from meticulously examined seller’s documents, permits (if it’s a building), and other critical paperwork. Unreviewed documents are loaded with hidden risks.
- Minimizing Risks: Reduce the possibility of costly surprises by identifying any potential challenges upfront. Failing to identify risks early guarantees costly problems later.
- Provide Legal Expert Guidance: Get clear explanations on whether the property is safe to purchase or not, backed up with our findings. Without expert advice, every step you take is a gamble.
Why Choose Charis Legal Practice?
We are your top Real Estate Law Firm in Lagos, Nigeria. As an investor, it can be profoundly disheartening to invest in a bad real estate investment.
You can engage our services from anywhere in the world regarding properties in Lagos, Ogun, Oyo, and Osun states.
Our virtual legal consultations make it easy for you to get expert advice and guidance in the comfort of your own space.
We have successfully conducted numerous comprehensive due diligence services worth billions of Naira for clients like Mr. A, expertly navigating complex real estate investing strategies.
Let us handle all of your legal needs with our comprehensive due diligence services package specifically designed for you, safeguarding your real estate business from potential real estate scams in Nigeria.