January - March 2016 •
The Lion King
• 37
INVESTING IN REAL ESTATE?
WHATYOUNEEDTOKNOWBEFORE
BUYING THAT HOUSE OR LAND
BY DANIEL WAJUIHIAN
as “signing fee.”
He was forced to pay them for sign-
ing. Can you imagine paying a signing
fee to the same family who you ear-
lier paid the land purchase price? He
could have avoided paying the extra
money if he had taken some precau-
tion before paying for the land. Here is
what to do before you buy that land
or property.
First, as a buyer, you need to instruct
a lawyer to conduct a diligent search
on the title to the land or building
and wait to receive the search report
before you part with payment. One of
the very valuable facts that a search
report usually reveals is the name of
the current registered owner of the
land. It will also reveal if the title is
encumbered or not.
Why should anyone pay for a land
or building without first getting his or
her lawyer to conduct a search on
the title to it? Even where you are
buying from a trusted source, it is still
important to conduct a search before
paying for the land or house.
What if there has been a defect or
encumbrance on the title to the land
that has not been obvious to that
friend or trusted person? If it is because
you are avoiding the fee to the lawyer
for the search, then that is “penny
wise pound foolish”. Here is what the
courts have said regarding the need
to investigate the title to any land or
building before buying: "A PURCHASER
WHO DID NOT TAKE THE TROUBLE TO
INVESTIGATE THE TITLE OF THE VENDOR,
WOULD HAVE HIMSELF TO BLAME FOR
NOT DOING SO”.
You also need to see the original title
document (s) before you buy and
take it in exchange for payment. Even
then beware that merely sighting the
title documents is not adequate pre-
caution. There are Issues of cloning
and fake title documents. Therefore,
the document needs to be confirmed
or verified as genuine. I also consider
the land information or charting useful.
It has to be ascertained that the land
is not under government acquisition
or restricted to particular use (may be
strictly industrial) which may be differ-
ent from your investment motive.
It is not sufficient to accept merely
the survey, or receipt from the seller.
You need to ensure that the deed of
assignment (or any of the appropriate
conveyances) prepared by a law-
yer is duly signed by all the parties in
exchange for payment.
Buying a land or house is a lifetime
investment, so exercise due caution.
A
friend came to me recently
to assist him prepare a “Deed
of Assignment” of the land he
bought few months ago. He had
earlier found a plot of land to buy
somewhere at the Ajah-Lekki axis, in
Lagos, Nigeria. He got a Surveyor to
draw up the survey, and obtained a
payment receipt from the family who
sold it to him.
He came to me much later, at the
stage he needed to perfect his title
to the land, since I advised him that
Lagos State Government would not
accept any documents for perfection
of assignment of land, except there
is a properly drafted Deed. When he
took the Deed to the family he bought
the land from, for them to sign the
Deed, they insisted that they would
only sign if he paid them some money
