PROPERTY OWNERS AND DEVELOPERS: WHAT HAPPENS AFTER THE 99 YEARS OF THE GRANT OF CERTIFICATE OF OCCUPANCY

I sincerely and passionately invite legal minds to contribute to this subject matter. ‘God forbid that I alone know it all’

I am aware that property owners within Eti-Osa and Ibeju Lekki local government of Lagos State, even other parts of Lagos are in serious dispute with developers of the estate where their properties are situated. Some others have approached the court of law to interpret the terms of the Deed of Assignment which was executed at the time of the purchase of their properties. I am also aware that what happens after the 99years and the one-day reversionary interest is a major worry to property owners. This is why I have taken time to write and share my opinion(which is not conclusive) on this issue bothering what happens after 99 years.

As we all know, an issuance of a certificate of occupancy by the state Government expires after 99 years and will be due for renewal. Have you ever taken a moment to reflect on what is likely to happen to properties covered by Certificates of Occupancy after the expiry of the 99 years tenure granted by the Government? As an owner of a Certificate of Occupancy (C of O) covering landed property in Nigeria, or you aim to own one or you possess a Deed of Assignment as a purchaser from a C of O owner, this thought raises very interesting questions, like: Does the Certificate of Occupancy or the Land Use Act provide for any renewal? Will the Government renew after the 99 years? If the Government refuses to renew what would happen to the improvements on the land? Now let us assume that the Government shall at the expiry of 99 years renew the C of O, then some other issues arise as to who is entitled to the renewal; Is it the original holder of the C of O or the holder of a Deed of Assignment at the time of expiration?

First, we must establish and remind ourselves that section (1) of the Land Use Act 1978 vests all land in the territory of each state in the federation to the governor of that state to be held in trust and administered for the use and common benefit of all Nigerians. The true import of this is that the Government owns the Land, and grants a Certificate of Occupancy which entitles the holder to certain rights and privileges over that land, such as use and possession of the land. These rights are subject to keeping the covenants of paying the ground rents contained in section (16) of the Act. The Government also has the right to reserves, the right to revoke the Certificate of Occupancy under the unquestionable power of overriding public purpose; this has been provided for in section (28) of the Act. The owner must also obtain the consent of Government to assign or sublet the land, section (21) of the Act. Undoubtedly the way of the Land Use Act is that the Government is in control and the holder is under control as far as the landed property is concerned. Under the Act therefore when parties exchange documents of sale (A Deed of Assignment) what is being sold is the amount of time unexpired from the 99 years right of occupancy – this is called “the unexpired residue of the term”.

 After 99 years, does the Land Use Act or the C of O provide for a renewal? For transparency, let us look at the Certificate of Occupancy and the clause granting this term which would usually read thus: “This is to certify that Mr. XYZ is entitled to a right of occupancy in and over the land described in the schedule and more particularly delineated in the plan annexed hereto, for a term of 99(Ninety-nine) years commencing from the ——–(date) according to the true intent and meaning of the Land Use Decree and subject to the provisions thereof and to the following special terms and conditions“. This does not give an incline as to the possibilities for renewal. Other clauses in the C of O do not provide for renewal. Looking past the C of O to the Land Use Act, an inquisitive look at the Land Use Act shows that no clause provides for a renewal after 99 years. On this ground, could it be right to say that the C of O automatically expires immediately after 99 years?

 Now, what happens to improvements on the land if the Government refuses to renew after 99 years? By virtue of section (15a) of the Land Use Act 1978, it provides that during the term of a statutory right of occupancy the holder shall have the sole right to and absolute possession of all the improvements on the land. This section (15a) which has gotten its backings from a Latin maxim “quicquid plantatur solo, solo cedit” that interprets “whatever is on the land is part of the land”, allows the holder of the C of O the sole right to an absolute possession of all improvements on the land but this is specifically for the length of the term only and by the 99^th year, if the Government neglects, omits or refuses to renew the C of O, the improvements by virtue of section 15 revert to Government.

If alienation of a land has occurred within these 99 years, then who is entitled to the renewal on the assumption that the Government is willing to renew? Will it be the former owner of the Certificate of Occupancy or the Assignee? Are their respective heirs, assigns, and successors in title entitled to the renewal? Some legal minds may be of the opinion that the owner of the Certificate of Occupancy has sold out and the heirs have absolutely no right over the land because their rights have been extinguished by the Deed of Assignment. This argument will be stretched by saying that the Governor’s consent to the Deed of Assignment formally introduced the new holder and passed all the rights of the original holder including the right of renewal to the Assignee.

Other legal minds are of the opinion that what the owner sold was the unexpired residue and the unexpired residue expires at the end of the 99 years term. They did not sell any other right apart from the “right of occupancy” for the unexpired residue of the term. This argument will further on that the renewal not being a stated right in the Certificate of Occupancy could not have been sold at the time because they cannot sell what they do not possess.

Below are my recommendations and thoughts.

One idea is to start a fresh count of 99 years of expiration with the right to renewal after an alienation of land to another has occurred with the consent of the Governor.

Another suggestion to the original holder is to assign the property “for the unexpired residue of the term less one day”. That way the property reverts to the original holder a day before the 99 years expires to make it better and easier to claim the renewal.

Another is to explicitly assign any right to renewals alongside the unexpired residue by stating that the assignment is “for the unexpired residue of the term including all renewals”.

 Another opinion is to include in the recitals to the Deed of Assignment a statement that the holder hereby assigns the unexpired residue and any rights of renewals.

It should be noted that these recommendations and thoughts are not free from debate and contrary opinions. These thoughts are opened to suggestions.

I, therefore, call on my learned brothers to make their input on this very controversial topic.

Please leave your suggestions in the comment box below.