PERFECTION OF TITLE IN LANDED PROPERTY TRANSACTIONS

 

WHAT IS PERFECTION OF TITLE?

Perfection of title includes stamping, registration and obtaining of Governor’s consent. This is a post completion matter and it is the duty of the purchaser to ensure that he (‘he’ in law stands for male and female) ferfects his own title in the property he has purchased.

Stamping:

This is governed by the stamp Duties Law/Act. Below are the requirements and procedures for stamping your instruments.

  1. Forward the title documents to the stamp duties commissioner within thirty (30) days of execution otherwise you will be liable to pay penalty.
  2. Ensure that you deliver at least two (2) copies.
  3. The commissioner will assess ad valorem (based on value). It is usually between (3-5%) of the consideration of the transaction.
  4. Payment should be made by bank draft and sometimes in the name of the state government. If it is FCT, then the federal capital development authority.
  5. Upon making payments, the commissioner will impress on the instruments, the words “stamp Duty Paid”.
  6. The Commissioner usually retains a copy of the instruments and give you the remaining copies.

GOVERNOR’S CONSENT:

This is provided for in section 22 of the Land use Act, 1978. The consent clause is actually tied on the instrument itself immediately after the signature of the parties. Barring minor differences in some states (or the FCT, Abuja), below are the basic requirements for obtaining Governor’s Consent.

  1. When the transaction is completed, write a letter addressed to the Director of Lands Department, Ministry of Lands of the relevant state (or FCT, Abuja). Most states would not accept a letter not originating from a solicitor/Law firm.
  2. Attach photocopies of the deed/agreement.
  3. Attach photocopy of the survey map showing the property in issue.
  4. After the Director’s Approval, the Lands Department will proceed to assess the amount to be paid by the applicant. A fair gauge is estimated as follows:
  5. Application form -N200 N500
  6. Approval fee -1% of the consideration
  • Registration -N200 N500
  1. Stamp Duties -3% of the consideration
  2. Capital Gains Tax -10% of taxable value
  3. Consent fee Ranges from 8-30% depending on the state ( or FCT Abuja)
  4. Many states insist on all payments being made by a certified cheque, usually of a stipulated bank.
  5. A current Tax clearance certificate of both parties is also required in a number of states ( or FCT, Abuja)
  6. Where one of the parties is a company, evidence tos how that the payee of its staff has been remitted to government and the current Tax clearance certificate of the directors.
  7. Where the transaction involves a developed property, a building plan of the property.
  8. For an assignment, a certified true copy of the assignor’s land document obtainable from the Lands registry.
  9. Evidence of payment of Ground rent up to date.
  10. Economic development levy receipt for both parties.
  11. Charting fee.
  12. Endorsement fees.
  13. It would also be advisable that in an assignment, the following clause is inserted in the instrument, “the assignee herein mentioned hereby undertakes to pay all government levies inclusive of land charges that may be imposed from time to time by the state Government ( or the FCT. Abuja)”.

Registration

A conveyance is a registerable instrument under the Land instrument registration law/act. An instrument will not be registerable unless the consent of the governor has been obtained and it is stamped.

Every registerable instrument must be registered within sixty (60) days of execution otherwise it is inadmissible in proof of title and will lose priority.

  1. Pay all the prescribed fees. Particularly the capital gain tax.
  2. Upon payment of the registration fee, the registrar shall cause a copy to be pasted on the register and he will endorse on the original instrument, a statement that “this instrument is registered as No ____________ at page________ in volume ___________ of the Land registry in the relevant office.