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LAND ACQUISITION IN LAGOS STATE:

FACTORS TO CONSIDER:









BEING TEXT OF PUBLIC LECTURE PRESENTED BY BENSON ENIKUOMEHIN & CO AT IKORODU ULTRA MODERN TOWN HALL, ITA-ELEWA, IKORODU, LAGOS STATE ON FRIDAY DECEMBER 2, 2005



LAND ACQUISITION IN LAGOS STATE

- FACTORS TO CONSIDER



Land is, undoubtedly a fundamental necessity of life. It remains the foundation/framework within which the social, political and economic activities of a society must function. No society can exist without land. The role land plays in the evolution of the human race is better adumbrated by the events well captured for adherents of the Christian religion in Genesis 1:9-10 on the creation of land by the Almighty God on the third day of creation.



The production and utilization of social and economic wealth can never be attempted without land. It remains therefore the most invaluable asset of an individual nay the state. The acquisition of same by the individual for various purposes and the state obviously raise serious socio legal considerations.



While the purport of this paper shall be the factors which should weigh in the minds of individuals and corporate bodies in the acquisition of interests in land, a complete picture cannot be obtained without a discussion of acquisition of interests in land by the state which is often times made compulsorily and the payment of compensation to individuals whose interests have been adversely affected. This is generally done under the Public Lands Acquisition Law. Under section 3 of the Law, the acquisition involves, in the absence of a voluntary agreement, invocation of the compulsive and expropriating power of government to wrest title from an owner of land in accordance with the law which guarantees payment of adequate compensation to the owner and right of access of such an owner to a court of law to assert his right to the property and claim adequate compensation.



In Nigeria, one’s right to one’s property was an entrenched constitutional right under the 1963 and 1979 constitutions as indeed it is under the 1999 constitution. The right is inviolate. Indeed, in the imprisium verba of the constitution itself, such a property or any right attendant thereto can only be taken possession of or compulsorily acquired by or under the provisions of a law. Furthermore, such a law must provide for the payment of adequate compensation. It follows therefore that any purported acquisition which is not according to a law containing the above provisions or conditions is no acquisition at all in the eyes of the constitution/law.



COMMUNITY/FAMILY LAND

The family can be described as the smallest social unit in the body polity. As a general rule, the management of family property is put in charge of the family head. It is the family head who makes allocation of portions to members of the family for their use. The family head has indeed been popularly described as a trustee of the family property in a special sense. His trusteeship signifies that he is to exercise his powers not for his own private advantage but for the benefit of the family. The family head does not enjoy absolute power in the management of family property per se. He is required to consult the other members of the family and in the case of important decisions such as sale of family land; he must obtain the consent of principal members of the family. A. valid allocation of family land requires the grant or transfer to be made by the head of the family with the principal members concurring therein. Where however the transfer is made by the head of the family acting for and on behalf of the family without carrying a long the principal members of the family, such transfer is only prima face voidable and not void and the family may set aside such a disposition of their land only if the non consenting members act timeously. A transfer of family land other than by the head thereof or the head and principal members of the family is absolutely void ab initio. So too, as the head of a family cannot transfer family land as his own exclusive personal property, any transfer of the family property by him without carrying along the principal members is void ab initio. Furthermore an ordinary member has no voice in the management of family property but can only be heard through the head of his own branch of the family.



The Family Head

Generally, the family head is the eldest surviving male member of the family. However, in the modern day, the claim of women to the headship of the family is being gradually recognized. Furthermore, the members of the family may sometimes have cause to appoint one of their members as family head in preference to the eldest member if they are dissatisfied with the person who is the biological head. This method of election is invariably the case in Lagos State in respect of Chieftaincy families. Except in the case of these chieftaincy families, the appointment and deposition of the family head remain the internal affairs of the family. There are no formal requirements and regulations to be followed in such appointments and publicity is not always necessary although it may be prudent to sometimes do so.



It is important in transactions relating to disposition of interests in land to distinguish between stool land and family land. Stool land is land appertaining to a chieftaincy and is vested absolutely in the current/present occupier of the chieftaincy stool. The chief has the absolute and unqualified use of the stool land as he pleases. Family land on the other hand belongs to the family and is vested in the family head only as a sort of trustee



Functions of the Family Head

It is the duty of the family head to manage the family property and allocate same to members of the family for their use and occupation. The head of the family manages the funds of the family for the good of the family. Where the family property is to be conveyed to a third party, such conveyance must be signed by the family head.





MEMBERS’ RIGHTS IN FAMILY LAND

A member of the family only has the right to use the portion of land allotted to him and not to alienate same since the land does not belong to him absolutely. The legal position has been succinctly stated thus:

“The Individual right of user is ………purely and simply a life interest. On the death of the individual, that interest reverts to the family though by reason of the occupational rights enjoyed by the deceased individual during his lifetime, the family will generally permit his children to have among them the same user as their parent”

This restriction however remains only until partition.



PARTITION OF FAMILY LAND

By partitioning of the family land among the several members of the family, the family land is split/divided into several individual lands, such portions vesting absolutely in the member to whom it has been apportioned. It is important that partition be distinguished from mere allotment for occupational use by the family head.



Partition must be consciously done implying that the division of the land must be clearly and properly understood as a partition by the family. In view of modern developments and disputations which usually follow this exercise, it is important and desirable, in order to avoid future rancour for the partition to be properly documented.



However, recent developments have made it important for written evidence that the family property was being partitioned and that member of the family agreed that the family property was being partitioned as distinct from mere allotment that does not confer ownership on any member of the family. The extent of the area of the land that is being partitioned should be clear to every member of the family.



LAND ACQUISITION THROUGH SUCCESSSION

An individual may acquire interest in land by way of succession either testate or intestate.



WILLS

An owner of land or a holder of any interest in land has always had the freedom, subject to certain qualifications to dispose his property by will. Two of these qualifications may be briefly mentioned here:-



i. A testator cannot by will confer any interest in family land on his beneficiary. This is because the interest in the family land does not belong to the testator



ii. A land that is encumbered i.e. by way of a mortgage can only devolve on a beneficiary subject to the encumbrance.



Written Wills

By the Wills Law, a will must be in writing. While no special words are required, it must be signed by the testator or by some other person in his presence and at his discretion and must be attested by two disinterested persons as witnesses.



THE LAND USE ACT 1978 AND LAND OWNERSHIP

The Land Use Act 1978, it must be said, has not destroyed or fundamentally altered the concept of land ownership in Nigeria that was in existence before its promulgation in 1978. Even though in theory by section 1 of the Act, the land that is comprised in the territory of each state is vested in the governor of the state, the concept of communal, family and individual ownership of land has not been destroyed and the governor cannot take the land of any individual unless the land is required for public purpose. If the acquisition is not for public purpose, it would be declared invalid.



The Land Use Act, is a nebulous legislation in the sense that in theory the radical title to the land is in the governor but in practice, the radical title in the community, family and individual has been maintained and preserved only with the requirement that alienation of these interests must be with the consent of the Governor



LAND ACQUISITION BY THE GOVERNMENT

By virtue of the Public Lands Acquisition Law, the state government may acquire land compulsorily for public purpose from individual land owners subject to the payment of compensation to such landowners.



The notice of acquisition by the government must be served on the land owner as the courts have consistently held that non service of the Notice of Acquisition would render the acquisition invalid.



It must be noted that the acquisition of private individuals’ interest in land can only be done by the government for public purpose as any acquisition not done for public purpose will be declared invalid by the courts on being challenged.

The courts have in the past declared as invalid.

1. The acquisition of some plots of land later leased by the government to a private company for the development of a hotel.



2. The acquisition of some plots of land by the government for the further development of a church. In Belo vs. Diocesan Synod of Lagos (1973) 3SC 103 a notice of acquisition was declared null and void because the land was acquired by the Lagos State Development and Property Corporation for the development and expansion of a church.



Furthermore, as the Notice of Acquisition represents a constructive notice to the whole world, there is need for members of the public desirous of purchasing land to confirm through a solicitor, whether the land/property they are purchasing is under government acquisition.



While it is true that government may decide to excise some area from the already acquired land area, prospective land purchasers must ensure that such excision and the precise areas properly gazetted.



REGISTRATION OF TITLE DOCUMENT

It is important that the document being presented by the seller to the prospective buyer must have been registered at the Lands Registry. This is because any document that creates or purports to create any interest in land must be registered at the Lands Registry. The registration makes it a public document under the Evidence Act and if the original copy is lost or destroyed, the certified true copy can be used in appropriate cases.



When a document is registered, the registration constitutes a notice to the whole world of the interest in the land to which the land/document relates. However, if there is any defect in the title of the person in whose name the document has been registered, the defect in the title cannot be cured by the registration.



Where it comes to the issue of priority, determination would depend on the time of registration. If A and B had purchased the same parcel of land from C and A registers his own document before B, the document of A shall have priority over that of B unless B can establish that he purchased the land from C before A and had entered into possession of the land immediately after the purchase of the land from C and A has knowledge of his interest, he may lose the land to A who has registered his own interest.



PROOF OF TITLE TO LAND

To establish his title to a prospective buyer of land in Lagos State, a seller may present before the buyer any of the following piece of evidence;



1. That he is the traditional owner of the land by way of customary inheritance i.e. on partition of family property or that his ancestor and predecessor-in-title owned the land from time immemorial and had been in uninterrupted possession before the Land Use Act and that he is therefore the person entitled to the right of occupancy in respect of the land. He is, in the eyes of the law, a deemed holder of the right of occupancy.



2. That he has been in occupation and possession of the land prior to the Land Use Act by virtue of a Deed of Conveyance which must have been duly registered at the Lands Registry.



3. That he is the beneficiary under a Will or Letters of Administration covering the land or property in which case he is the person entitled to the grant of the statutory right of occupancy. It must however, be observed that due care must be exercised by the prospective purchaser and his solicitor in confirming whether the Will has been genuinely admitted to Probate or whether the Letters of Administration was properly issued by the appropriate Probate Registry and there is no objection to the appointment of the Administrator is defective or invalidated as a result of objections being raised in respect thereto, the purchaser would have bought nothing as the sale would be void ab initio.



4. That he has applied to the Governor of the state and been validly granted a Certificate of Occupancy. Undoubtedly, this represents the most popular and preferred mode of proving title to a piece of land in Lagos State. Although the Certificate of Occupancy is, in itself, not entirely unimpeachable, it still represents the most reliable method of establishing ownership.



5. That he possesses a Deed of Assignment in respect of the land granted to him by an Assignor who was the holder of a Certificate of Occupancy. The Deed of Assignment must have been duly stamped at the Stamp Duties Office and registered at the Lands Registry after the consent of the State Governor must have been obtained. Failure to obtain Governor’s consent to the Deed of Assignment renders the Deed void.



PURCHASE OF A PROPERTY SUBJECT TO A MORTGAGE

In Lagos State virtually on a daily basis, advertisements appear in the press by mortgagees usually banks in respect of properties mortgaged to them by their customers (mortgagors) in respect of credit facilities extended to them by the banks.



A mortgagee can sell the mortgaged property if the mortgagor defaults in the payment of the outstanding balance in his account with the mortgagee bank. The mortgagee must serve on the mortgagor a letter of demand for the payment of the amount of money that is due from the mortgagor to the mortgagee and the mortgagor must be given specific time within which to liquidate the debit balance in the account. If the mortgagor does not liquidate the outstanding balance in his account within the stipulated period, the mortgagee can foreclose the mortgage and dispose off the mortgaged property.



Where the mortgagee has employed an auctioneer to sell the property of the mortgagor by public auction and there is a clause in the auction notice that the sale is subject to the approval of the mortgagee, at his or its absolute discretion, title in the property will not pass to the buyer/purchaser until the approval of the mortgagee is received and the buyer cannot sue the mortgagee for the specific performance of the contract notwithstanding the fact that he had paid money to the auctioneer for the purchase of the property. The principle that the contract is concluded on the fall of the auctioneer’s hammer does not apply where there is a clause in the auction notice that the contract is subject to the approval of the mortgagee at the absolute discretion of the mortgagee.



SALE OF LANDED PROPERTY BY THE MORTGAGOR

The legal estate in a mortgaged property is vested in the mortgagee and until the property is redeemed by the mortgagor, the mortgagor cannot transfer a valid title in a mortgaged property to a third party.



Under the Land instrument Registration Law of Lagos State, a legal mortgage is a registratrable instrument and being a public document, it’s registration represents a notice to the whole world and members of the public on the interest of the mortgagee in the mortgaged property. Members of the public, including a prospective purchaser of the property, are therefore fixed with constructive notice of the existence of the Deed of Legal Mortgage and the interest of the mortgagee in the mortgaged property Section 22 of the Land Use Act requires the mortgagor to obtain the consent of the governor before there can be a valid transfer of his interest to the mortgagee.



The provision however does not apply to the deed of legal mortgage where a prior equitable mortgage on which the subsequent legal mortgage is based has been created with the consent of the governor. It does not also apply to a deed of release by which the mortgagee is conveying the property back to the mortgagor on the liquidation of the debt secured by the Deed of legal mortgagee.

Although consent of the governor must be obtained to the deed of legal mortgage/transaction, the parties are not forbidden from entering into the agreement, but the agreement is not binding until the consent of the governor has been obtained to the transaction.



From the judicial decisions so far it can safely be asserted that if the mortgagee has advanced money to the mortgagor and the deed of legal mortgage is executed and registered without the consent of the governor, the mortgagor can only defeat the right of the mortgagee to sell the property only on the legal mortgage.



Any member of the public who buys a mortgaged property from the mortgagor when the deed of legal mortgage is still subsisting buys the property subject to the right of the mortgage. He may only be able to retain the property if he is prepared to settle the debt that the mortgagor is owing the mortgagee, otherwise the sale to him by the mortgagor is null and void and can be set aside by the court.



DEFECT IN THE MORTGAGOR’S TITLE – WHAT EFFECT?

It is imperative for the mortgagee to conduct a search at the Lands Registry on the mortgagors title. This is because if the title of the mortgagor is defective, any deed of legal mortgage that is based on the defective title may be declared null and void at the suit of the person that has title to the land. If the property of the mortgage is subject to any encumbrance, the mortgagee shall take subject to the encumbrance.



MORTGAGE TRANSACTION AND GOVERNOR’S CONSENT

The Land Use Act has brought a great deal of revolution to mortgage transaction by the requirement that consent of the governor must be obtained to the mortgage transaction before the mortgagor can transfer his interest to the mortgagee



THE ROLE OF SOLICITORS IN LAND ACQUISITION

A prospective buyer desirous of acquiring any interests in land and doing so without the professional assistance of a Solicitor can be likened to a farmer proceeding to his farm without his hoe and cutlasses.

The Solicitor’s role begin from investigation of the seller’s title and extends to the documentation and perfection of the buyer’s title.

i. Investigation covers

a. Physical investigation of title and

b. Documentary investigation of title to confirm proper and due

execution which must be in accordance with the relevant laws and registration at the Lands Registry.

ii. Documentation and Perfection

On the conclusion of investigation of title, the Solicitor proceeds to the preparation of the transfer document and the perfection of same.



The transfer document could be either a Deed of Assignment, in the case of an absolute transfer or a Deed of Legal Mortgage.



PRESENTATION FOR GOVERNOR’S CONSENT

Any discussion of acquisition of interests in landed property in Nigeria today would be incomplete without an examination of the consent provisions of the Land Use Act. By the provisions of the Act, no transfer of interest in land is valid without the consent of the Governor not having been obtained. It must however be observed that it is a misconception of the law to contend that consent of the Governor must be obtained before consummation of the sale transaction by the parties. It is however worrisome that bureaucratic bottleneck which has been created in the process of obtaining Governor’s consent has created serious problems for members of the public desirous of obtaining the consent of the Governor. The present efforts of the Lagos State Government geared towards simplifying the process must however be commended.



CONCLUSION

Notwithstanding the various programmes of the present government geared at combating corruption, the continuous rise in the activities of land speculators and refusal of most dealers in land transaction not to exhibit utmost good faith in their dealings, the need for members of the public to be extra vigilant in the acquisition of interests in land would continue to generate serious interest for a long time to come.