Pitfalls to Avoid When Leasing or Purchasing Property

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By Adaora Nwachukwu

This article is a response to the recent demolition of a few small businesses in Nigeria, indeed, it is quite unfortunate. My aim is to reiterate the need for property owners or tenants, to ensure that proper due diligence is carried out before parting with hard- earned cash.

For persons intending to purchase property, please ensure that you take the following steps:

  1. Make Requisitions: Take a trip to the site location to make some inquiries, and also look out for markings on the property. This is helpful to prospective buyers as you may find out useful information which may influence your decision to purchase that property.
  2. Conduct a Search: In the event the intended property has a registered title, a search at the Land Registry Office will reveal further details about the property including the name of registered title holder, size of the land, if there are any hurdles, caveat and so on. The cost of the search is minimal. Unfortunately, the search results will not be revealed if the property is subject to litigation. However, in the event that the prospective buyer has the suit number, he or she can conduct a search at the court of law.
  3. Obtain a Charting Report: The services of a surveyor is required in this instance and it doesn’t cost a fortune. The essence of a charting report is to identify the true position of the property, check the co-ordinates and ensure that it does not fall within the road alignment, government acquisition or committed lands.
  4. Retrieve All Property Documentation: After the parties have progressed from the pre-contract stage, the buyer should ensure that all documentation are collected before parting with cash. It may be quite difficult getting the seller to furnish you with certain documents after making financial commitments. There is also the need to verify the authenticity of the title document which will pass from the buyer to the seller. There have been numerous instances where people fall into the hands of fraudsters only to discover that the title document was cloned or fake. The services of a lawyer is critical at this stage.

For the purpose of renting a property, please note the following:

  1. Make requisitions as stated above. You tend to find out a lot more than what you see on the surface.
  2. Meet with the owner of the property. In the event the owner is not available, please ensure that the party representing him/her has the Power of Attorney to act on his/her behalf or express written consent. This is to guard against a situation where money has entered into the hands of who never had the right to rent the property in the first place.
  3. Ensure that a Lawyer vets the Tenancy Agreement. This is to ensure that your interests are duly protected. There are many devious landlords prowling the streets, seeking tenants to devour.
  4. Ensure all outstanding payments are made. I strongly suggest that before taking possession of the property, ensure that there are no outstanding payments by the previous occupants including light bills, water bills, Land Use Charge, etc. except there is a prior written agreement with the Landlord to net off these bills from the rent payable. It is your right to request and be furnished with evidence of these receipts.

If there are any subsequent developments to be made on the property, the property owner must first obtain the planning approval of the Government Agency saddled with this power. In Lagos for example, the Ministry of Physical Planning and Urban Development (MPP & UD) is responsible for issuing the permit. Failure to obtain the requisite permit may lead to the demolition of the building or structure in the future. As a prospective buyer or tenant, if the development mentioned here will affect your right to the property, please request to see a permit from the regulatory body.

The need to engage the services of a skilled lawyer and property surveyor in a real estate transaction cannot be downplayed. This is because prospective buyers and tenants tend to fall prey to the fraudulent people. Like the saying goes, “penny wise, pound foolish”.

Also, watch out for red flags or anything that may cast a doubt within you from the beginning of any transaction. Never rush to purchase or rent any property. There are always better options if you are patient enough, which will eventually save you from issues and regrets in the long run.

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Author: 234Finance

234Finance.com is an online platform that promotes African entrepreneurship. We achieve this by bridging the gap between investors and early stage startups in Africa’s emerging market.
234Finance.com is strategic for promoting entrepreneurship through the power and effective use of information.

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234Finance
234Finance.com is an online platform that promotes African entrepreneurship. We achieve this by bridging the gap between investors and early stage startups in Africa’s emerging market. 234Finance.com is strategic for promoting entrepreneurship through the power and effective use of information.

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