By Akhigbe Dominic M.
The Land Use Decree (now Land Use Act) was promulgated on 29th Day of March in the year1978. This follows the recommendations of the report of a minority group of the panel appointed by the then Federal Military Government to advice on future land policy. It immediately vested all land in each state of the Federation on the governors of that states.
Except land vested in the Federal Government for its agencies, all lands were solely in the hands of the governors of the state who would hold such land in trust for the people
To posses in clear times for use by individuals or body Corporate, A Certificate of Occupancy is given by the Governor on Application pursuant to sections 5, 9 and 10 of the Land Use Act No. 6 of 1978.(Lagos State cited). A certificate of occupancy, therefore, is a document that acknowledges the right to possession of a certain property. This document shows that the governor of the state has given his consent and is aware that the property is in your possession. The document shows that a certain property has been allocated to you for a certain period of time of up to ninety-nine years. It confers exclusive right of possession on the purchaser of the property for which a Certificate of Occupancy has been issued.
In furtherance to this, the issue of ownership of a portion thereof of such a property already covered by a Certificate of Occupancy would become contentious if unresolved; this is where the Deed of Sublease suffices. Since the holder of a C of O is already a tenant to the state government, he can only sublet part of or all of such property covered with the Certificate of Occupancy. A deed of sublease could refer to a document by which a tenant or lessee sublets a part or all of leased premises to another person. The right of a tenant or lessee to sublet largely depends upon the terms of the original lease
Most guilty in the deliberate abuse of these processes that confer home ownership on deserving and capable owners are the Real Estate Developers. House ownership elsewhere in the world is not a rocket science. The system has so mitigated its complexity that you can even access a Mortgage facility online without the immutable logic of the necessity of a ‘housing magician’. In the United Kingdom, all you require is to have a minimum credit rating and passing the minimum affordability assessment, you are good to go. The possibility of being scammed due to accessibility complexities mostly created by operators to create the leeway for sharp practices. The system is organized, systematized and transparent. Back here at home, the same can not be said. The system is not isolated from the systemic corruption bug. Everything is almost embellished in uncertainties. Unsuspecting Nigerians get their fingers burnt in sophisticated scammers’ web in the guise of Developers. It is worse that the average Nigerian is antithetical to soughing expect opinion before delving into such complex endeavors by Nigerian definition. He sees expert’s opinion as an unnecessary additional cost that must be eliminated. In the end, like the proverbial prodigal son; he scampers for experts’ opinion or services in wriggling out of the imbroglio created by his ‘ingenuity’ or I ‘know-it-myself’ theory.
A client picked interest in some Housing Units from a Developer’s facility. He called to put me on notice of his intention. I swiftly advised him to see me in the office to enable us distill his intention and also evaluate the veracity of the claims of then Chief Executive of the Developer’s company. When he showed up, I told him there was need for him to mobilize us to enable us conduct due diliigence for him and vet the process all through to ensure a safe landing for him. As soon as I mentioned mobilization; he became uncomfortable and started to back-pedal in getting us involved. He then cleverly withdrew the flyer from the Developer he had given me to evaluate and opted to do it all by himself. After several calls to him to know his state of readiness, I left him to it when it was clear that he was keeping something away. He actually told me that he had dropped the idea as he had resolved to develop the plot of land he earlier bought somewhere as against going on with the idea of accessing from the developer company.
About nine months latter, he called me. He wanted to know the difference between a Certificate of Occupancy and a Deed of Sublease. I gave him a surface explanation and went further to ask him if something came up. He really could not answer confidently. Instead, he opted to see me with a document in the office the next day. By 12 mid day, he came to my office with a bonded document titled ‘Deed of Sublease’. From the back page; I noticed he was the Sub Lessee. He first of all apologized that he got me out of the way while assessing the facility. According to him; he wanted to save cost. In any case, a friend of his who had assessed the facility from the Estate of the developer had told him there was no need to get a lawyer involved as he went through it all by himself seamlessly. According to his friend, even the Developer’s internal Counsel was ever available to give all necessary legal support in the event a client was in doubt. All the same, I went ahead to study the six-page document in greater details not minding his initial foolery. After all, what are friends for?
At closer examination, I noticed a few clauses that arouse my curiosity as a property lawyer. First; a clause was inserted that he could not improve on the structural integrity of the houses without the written permission of the vendor. He was also prohibited by a section of the document from sinking personal boreholes, buying his personal electricity meter, he would pay a hundred thousand naira as ‘fence permit’ should he desire to fence his facility and much more. As if these were not punitive enough. A section of the document prohibits him from Assigning, subletting or letting the purchased property. Most devastating of it all; the Renewal of the Sublease is subject to the payment of a fee to be fixed by the Sublessor at its expiration. I was dazed by these prohibitive conditions in a supposed Sublease. After helplessly gazing at him for minutes; I told him the bitter truth; he is a glorified tenant and not a landlord!
There are pertinent questions that arise from this very curious document that call for very tactical evaluation: since this man bought his house from the Developer; are the terms contained in the Deed of Sublease supposed to be different so significantly from then terms contained in his Certificate of Occupancy? Is anything wrong with automatic renewal clause? Must the right to upgrade, reposition or cause some suitable changes to his houses be reposed? I will take a detailed look at these and many more puzzling questions arising from the sharp practices of Developers in the issuance of Deed of Sublease in my next edition.
Akhigbe is a consultant in Real Estate & an investment portfolio manager and a seasoned Nigerian Micro, Small & Medium Scale Business Coach. Contact:08034846284
