Real estate is a significant sector of the Nigerian economy, and understanding the terminology used in the industry is critical if you want to buy, sell, or invest in property. In this blog post, we will go over 25 important real estate terms in Nigeria that you should be familiar with.
Top List of Nigeria Real Estate Terms
1. 𝐋𝐚𝐧𝐝 𝐔𝐬𝐞 𝐀𝐜𝐭: This is a Nigerian law that vests all land within a state in the governor of that state, and requires that any individual or entity seeking to acquire or use land must obtain a certificate of occupancy (C of O) from the government.
You can read more about the land use act here
𝟐. 𝐂𝐞𝐫𝐭𝐢𝐟𝐢𝐜𝐚𝐭𝐞 𝐨𝐟 𝐎𝐜𝐜𝐮𝐩𝐚𝐧𝐜𝐲 (𝐂 𝐨𝐟 𝐎): This is a document issued by the government to signify ownership and right to use a piece of land. It is obtained through a process that involves paying certain fees to the government, and complying with certain conditions.
A piece of land or property purchased without a Certificate of Occupancy is equivalent to owning a vehicle without a logbook. This is clearly not the situation you want to be in as a landowner or property owner in Nigeria.
According to Section 9 of the Land Use Act 1978 stipulates that the certificate of occupancy for a piece of land located in Nigeria can only be issued by the State Governor of the state where the land is situated. The Section further states that the Governor must issue the certificate under his own hand to any individual who is entitled to a statutory right of occupancy, as evidence of such right. This act also established the concept of land use, which distinguishes between various types of land usage such as residential, commercial, mixed-use, etc.
I wrote a comprehensive article on Land Measurement and Documentation Here
3. 𝐃𝐞𝐞𝐝 𝐨𝐟 𝐀𝐬𝐬𝐢𝐠𝐧𝐦𝐞𝐧𝐭: This is a legal document that transfers ownership of a property from one person or entity to another.
A Deed of Assignment in Nigeria can only be prepared by a lawyer. The buyer’s legal counsel drafts this document, known as a deed of assignment, to represent his client’s interests. Following that, the seller’s legal counsel scrutinizes and executes this document in order to project mutual agreement between the two parties.
At the conclusion of a property transaction, any reputable real estate company in Nigeria would provide you with this document. It must also contain certain information in order to be binding on the parties to the transaction. They believe that transferring land ownership requires a deed of assignment.
4. 𝐃𝐞𝐞𝐝 𝐨𝐟 𝐂𝐨𝐧𝐯𝐞𝐲𝐚𝐧𝐜𝐞: This is a legal document used to transfer ownership of a property from one person or entity to another.
The purpose of the deed is to ensure a clear transfer of ownership, free of any encumbrances such as liens, mortgages, or other claims that may affect the property’s title.
Conveyance deeds are commonly used in real estate transactions, such as when buying or selling a home, but they can also be used for other assets such as vehicles, boats, or intellectual property. The deed contains information about the property, such as its legal description, the names and addresses of the parties involved, and the price or consideration paid for the property.
5. 𝐌𝐨𝐫𝐭𝐠𝐚𝐠𝐞: This is a loan obtained from a bank or other financial institution to purchase a property. The property is used as collateral for the loan.
6. 𝐏𝐨𝐰𝐞𝐫 𝐨𝐟 𝐀𝐭𝐭𝐨𝐫𝐧𝐞𝐲: This is a legal document that gives one person (the attorney) the authority to act on behalf of another person (the principal) in legal matters.
7. 𝐑𝐢𝐠𝐡𝐭 𝐨𝐟 𝐎𝐜𝐜𝐮𝐩𝐚𝐧𝐜𝐲: This is a document issued by the government to allow an individual or entity to occupy and use a piece of land for a specified period of time. This is one of the most important real estate terms on the list.
8. 𝐒𝐮𝐫𝐯𝐞𝐲 𝐏𝐥𝐚𝐧: This is a map or diagram of a piece of land that shows its exact boundaries, dimensions, and other features.
9. 𝐓𝐞𝐧𝐚𝐧𝐜𝐲 𝐀𝐠𝐫𝐞𝐞𝐦𝐞𝐧𝐭: This is a legal document that outlines the terms and conditions of a rental agreement between a landlord and a tenant.
10. 𝐓𝐢𝐭𝐥𝐞 𝐃𝐨𝐜𝐮𝐦𝐞𝐧𝐭: This is a legal document that shows ownership of a property, and may include a deed of assignment, certificate of occupancy, or other relevant documents.
11. 𝐒𝐭𝐚𝐦𝐩 𝐃𝐮𝐭𝐲: This is a tax levied on documents, such as land transactions, that are stamped and registered at the Lands Registry or the Corporate Affairs Commission (CAC).
12. 𝐏𝐫𝐨𝐩𝐞𝐫𝐭𝐲 𝐕𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧: Property valuation is the process of estimating the monetary value of a real estate property while taking into account a variety of factors such as the property’s location, size, condition, and features. The valuation may be performed for a variety of reasons, including the sale, purchase, mortgage, insurance, taxation, or resolution of legal disputes.
13. 𝐏𝐫𝐨𝐩𝐞𝐫𝐭𝐲 𝐃𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭: This refers to the process of building or renovating a property, such as a house, apartment complex, or commercial building. Property developers often work with architects, contractors, and other professionals to plan and execute their projects.
14. 𝐏𝐫𝐨𝐩𝐞𝐫𝐭𝐲 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭: is a real estate term that refers to the management of properties on behalf of owners, including tasks such as maintenance, rent collection, and tenant screening.
15. Appreciation: The increase in the value of a property over time is referred to as appreciation.
16. 𝐋𝐚𝐧𝐝𝐥𝐨𝐫𝐝: A landlord is an individual or entity who owns a property and rents it out to tenants.
17. Depreciation: A decrease in a property’s value over time is referred to as depreciation.
18. 𝐓𝐞𝐧𝐚𝐧𝐭: A tenant is an individual or entity who rents a property from a landlord.
19. 𝐑𝐞𝐚𝐥 𝐄𝐬𝐭𝐚𝐭𝐞 𝐀𝐠𝐞𝐧𝐭/𝐁𝐫𝐨𝐤𝐞𝐫: A real estate agent or broker is a licensed professional who helps individuals buy, sell, or rent properties. They typically earn a commission based on the value of the transaction.
20. 𝐏𝐫𝐨𝐩𝐞𝐫𝐭𝐲 𝐎𝐰𝐧𝐞𝐫𝐬𝐡𝐢𝐩: In Nigeria, property ownership can be held by individuals, corporations, or the government. It is important to ensure that the ownership of a property is clear and legally valid to avoid disputes and legal issues in the future.
21. Rent-to-Own: Rent-to-own is a type of financing arrangement in which a tenant rents a property for a set period of time with the option to purchase the property at a later date. During the rental period, the tenant typically pays a higher monthly rent than they would if they were simply renting the property, with a portion of the extra money going toward a down payment on the property if they choose to exercise their option to purchase. The option to purchase the property is typically outlined in the rental agreement, with the price and terms of the purchase negotiated in advance.
22. Due Diligence: Due diligence refers to the process of conducting a thorough investigation into a property before making a purchase.
Due diligence in real estate includes reviewing documents, performing financial calculations, and evaluating risks. It is essentially the “homework” component of real estate. When real estate agents mention due diligence, they usually mean the buyer’s research prior to making an offer or the contingency period before the final closing.
23. 𝐑𝐞𝐚𝐥 𝐄𝐬𝐭𝐚𝐭𝐞 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐓𝐫𝐮𝐬𝐭𝐬 (𝐑𝐄𝐈𝐓𝐬): REITs are investment vehicles that allow individuals and organizations to invest in real estate without actually owning physical property. In Nigeria, 𝐑𝐄𝐈𝐓𝐬 are regulated by the Securities and Exchange Commission (𝐒𝐄𝐂).
24. 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐆𝐚𝐢𝐧𝐬 𝐓𝐚𝐱: This is a tax on the profit made from selling a property. In Nigeria, capital gains tax is typically 10% of the gain.
25. Closing Cost: Closing costs are the fees and expenses associated with the purchase of a property that must be paid by the buyer at the time of closing. These fees and expenses may differ depending on the location, the price of the property, and the type of mortgage being used.
It’s important to note that closing costs can add up to a significant amount, often ranging from 2% to 5% of the purchase price of the property, so buyers should be prepared to budget for these expenses.Show Us Love and Give Us a Follow on Socials