Despite the benefits of ease of doing business in the real estate sector, more than 60% of Nigeria’s 923,000 square kilometers of land and owners are without titles due to the Certificate of Occupancy (C-of-O) process and other cumbersome documentation.
The Guardian Newspaper reported that inefficient procedures for registration and grant of land use rights have negatively impacted development progress and discourage investment in this area. For example, it takes about six years for some Lagos landowners to receive their documents.
The real estate industry is flooded with uncertainty of acquisition and finalization of title, issues of consent, revocation and re-certification. In addition, land costs are too high and exacerbated by transfer and completion costs. The Nigerian Constitution has vested responsibility for issuing titles to state governments as all land is given to governors under the Land Use Act (LUA) of 1978. Industry stakeholders over time have called for an amendment to Section 1 of the Act, which assigns immense power to governors, often leading to abuse and uncertainty over titles for those who need it.
According to the 2018-2019 Nigeria Living Standards Survey (NLSS) report from the National Bureau of Statistics (NBS), 71.4% of homeowners sampled in 36 states and the Federal Capital Territory (FCT) do not have a title. The report released by NBS shows that 13.2% of landowners nationwide have a title deeds, while only 8.1% have a C-of-O.
Among the serious obstacles observed by the stakeholders are the rigorous process, the corruption of officials, the long lead times and high cost of paperwork, along with the inertia of the authorities in distorting the government land policy, contributing to the increase in property values and land-buying capacity of the urban poor and the growing formation of informal settlements in cities.
Findings in some states show that individuals are required to pay a capital gain of 10 percent, others three percent or one percent, and in other cases, prices relative to land prices. However, only about 48% of states require an appraisal to determine land value and ancillary fees payable for land registration, while the rest are based on a rule of thumb or any decision of the governor which may not be favourable to owners or registrants of title.
Statistics reveal that between 2018 and 2023, the Federal Government approved 7,985 titles. It has approved and issued 1,300 certificates to landowners verified by the Federal Government as of October 25, 2018. Speaking recently, the Minister of Works and Housing, Babatunde Fashola, who inaugurated the e-C-of-O said the government has signed about 6,685 during the eight-year term of President Muhammadu Buhari. Across all states, it was found that a significant number of landowners often dropped out of the process, leaving government agencies struggling with a large number of unfinished applications along with failure to send important information and other documents. It is understood that this is not without regard to the bureaucratic bottlenecks and costs of applications.
With states like Lagos and others introducing electronic applications for land documents, the move has yet to have far-reaching results as those providing e-certificates remain the bottleneck in the process.
In Ogun state, the government only issued 4,000 title certificates to landowners by 2022, while in Lagos, the Akinwunmi Ambode government signed a total of 5,172 certificates over three years and from May 2019 to May In May 2022, 727 electronic C-of-Os were signed by the Babajide Sanwo-Olu administration, excluding those for regularizations.
In addition, in Borno, Governor Babagana Zulum issued 775 C-of-Os during his first term. Over the years, people’s attitude towards this process has been very indifferent due to the backlogs in the process. Lack of titles makes transactions difficult, leads to inability to convert real estate into equity, and numerous frauds, creating a veil of low integrity for real estate and real estate transactions.
Speaking about this development, President, International Real Estate Federation, (FIABCI), Mr. Gladstone Opara, said that obstacles in obtaining title certificates are a major hindrance to the development of real estate, “it has been proven worldwide that in addition to promoting real estate, titles help in identifying the natives of a country and where they live.
“If you have a correct title, using the online documentation process, it helps in the fight against crime. You can’t use an allocation letter to borrow money and can’t put the property on the list of what you have because some institutions won’t accept it instead prefer C-o-O and others. As long as these applications move from one table to another and are done manually, the system cannot prevent corruption.
He said that the current problems related to the lack of documentation appear to be man-made, pointing out that in advanced countries, requests are captured electronically and promptly sent within days.
“The Lagos State Government has not been magnanimous enough to guarantee title ownership because they keep increasing costs sometimes up to the value you bought a property and most of the time, people are discouraged to do their paperwork, said Opara.
He said that as the problems were known, the solutions were also known, but the government had to update solutions such as improving the online documentation suggested over the years.
Former president of the Lagos branch, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Adedotun Bamigbola said that facilitating access to property titles is one of the key considerations for ease of doing business and ensuring the accessibility of title deeds for individuals or organizations.
