Nigeria’s property title problems persist as 71% of landlords are without occupancy certificate

The difficulties in obtaining property title in Nigeria are not abating as over 71 percent of landlords did not have any document/Certificate of Occupancy (C of O) as of 2019.

According to the 2018-2019 Nigeria Living Standards Survey (NLSS) report by the National Bureau of Statistics (NBS), 71.4 percent of landlords sampled across the 36 states and the Federal Capital Territory (FCT) are without titles.

Collected between September of 2018 and October of 2019, the NLSS data published Wednesday by NBS shows 13.2 percent of the country’s property owners have title deed while only 8.1 percent have the certificate.

Issues around the rigorous processes, long duration and the high cost of obtaining land and property documentations are among key setbacks identified and highlighted by industry stakeholders.

Jide Ogunleye, CEO of Denaro Properties Limited, a business and investment strategies firm with an emphasis on real estate, said bureaucracy combined with corruption in the titling process will not allow things to get done.

“Whatever has been done has still not solved the problem of titling, forget the e-certificate. The people that will provide the e-certificate can be bottlenecks in the process,” he said.

He explained that this is because “people won’t move your file, except they are paid or something, and as such it is likely that in some cases you can be on your land title for a very long period of time.”

Certificate of Occupancy is the document issued by State governments in Nigeria to landowners and property buyers as a legitimate proof of ownership after requirements have been met.

Apart from the obvious fact that C of O shows ownership of a property, the certificate can also be used to obtain loans, secure mortgage and also makes it easy for a property owner to re-sell.

Analysis of the housing and living conditions segment of the NLSS NBS report revealed that the “highest prevalence of ownership certificate is in Lagos – 22.9 percent.”

According to the Lagos State Business Made Easy (BME) document driven by the Presidential Enabling Business Environment Council (PEBEC), there has been a reform in the method of operations by the Lagos State Land Bureau as it has introduced the use of technology in its day-to-day transactions.

The BME document, however, explains that prior to the implementation of the reforms, “applicants seeking to register a property in Lagos were required to pay fees at different stages and carry out visits to the land registry before registration could be completed.”

But, checks by BusinessDay revealed that Nigerian property owners, estate developers, legal practitioners and other stakeholders in Lagos state have had a mixed bag of experiences, in getting their land documents in a country where 90 percent of houses are built with own savings.

The provision by Nigeria’s Land Use Act of 1978 that the Governor has to grant a statutory right of occupancy before a person can use their landed property for; mortgaging, transfer or subleasing is one of the reasons cited by industry players as the major barrier to affordable housing.

“It shall not be lawful for any customary right of occupancy or any part thereof to be alienated by assignment, mortgage, transfer of possession, sublease or otherwise howsoever – without the consent of the Governor in cases where the property is to be sold by or under the order of any court under the provisions of the applicable Sheriffs and Civil Process Law,” the Land Use Act read.

Nasir El Rufai, Kaduna State governor explained that “the major issues that continue to affect housing delivery in Nigeria, which also account for the wide demand-supply gap, include constraints related to the high cost of securing and registering secure land title.”

While the Land Use Act was established to curb land speculation, the key driver for the astronomical rise in land values, the lack of modification of the Act which was passed some 42 years ago is now described by industry experts as a setback for many property owners.

Difficulties in obtaining land title, for example, would mean that real estate developers will have challenges having access to lands and this would also mean that there would be less inventory in the market or the available products will come at a higher cost.

The latter is the case for Nigeria, a country which requires an estimated N170trillon to N200trillion to bridge its housing deficit of more than 20 million units.

“The cost of building a house is the same, whether you are building in VI or Ikoyi, but it is the land value that drives the cost of properties high,” Adekunle Abdul, Managing Director, Metro & Castles Homes, a real estate development company said.

Individual efforts at increasing Nigeria’s real estate properties by way of developing more houses shows offering insights into possible solutions, have not helped to reduce the demand-supply gap or increase the ownership level estimated at more than 20 million units.

Despite its large-size population and self-acclaimed biggest economy in Africa, Nigeria is crawling behind its peers in terms of homeownership level in the country.

Whereas homeownership level is 25 percent in Nigeria, the most populous country in Africa is a laggard when compared to the 84 percent in Indonesia, 75 percent in Kenya and 56 percent in South Africa.

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