Pitfall to Avoid When Buying a Land
Land is the basis of real estate investment and buying, keeping and selling vacant land is one of the most profitable investments that you can make. If your location is right and you buy at the right price getting a hundred per cent return on your investment within five to seven years is not unusual. However, there are pitfalls to avoid and challenges that you may face in your bid to make profit through this investment medium.
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Few days ago, I had a chat with a friend on the challenges he is currently faced with on a parcel of land he bought some years ago in one of the outskirts of Lagos. He recently visited the area to check up on this investment only to discover that a quarter of the plot had been sold and one of the access roads no longer exists because the traditional land owners popularly referred to as ‘Omo Onile’ in South West Nigeria had sold it and a building had been erected on it.
This is not an isolated incident as WE are sure either you or someone known to you might have had a bitter experience in this regards. It is the by-product of some lawlessness, shenanigans in our society which a better land regulatory regime should correct.
One of the most painful aspects of investing in real estate is to discover that you have used your hard earned money to buy litigation or crisis and landUnderDispute. The possibility of resolving land dispute in record time is generally remote. Some land matters involving serious conflicts have lasted between 2 to 10 years or more before they are finally resolved.
By that time some of the beneficiaries might have died and the benefit of the victory not as exciting as it should be. These are some of the reasons why it is good to avoid these pitfalls or be better prepared to handle them when and if they do occur.
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One of the key points to keep in mind is that although an agreement could be made verbally or in writing, when it involves real estate ensure that the agreements are in writing. Oral land transactions cannot be enforced by our law courts
The most basic of the document that you need is a purchase receipt. You should ensure that you read any fine print on the receipt and take note of the words used. For instance, if you fully paid for the purchase of the land and you find written on the receipt that you leased it no explanation from the seller should suffice until he or she changes the words to reflect that the land had been sold to you.
Land can be purchased from an individual, a community, a private or a public corporation. When the land is purchased from a community rather than an individual, the precautions you need to take during and after payment are slightly different. In this instance, a sale of community land must be with the consent of the head of the family. The receipts and agreements that you will have must be signed by the head of the family and any other recognized signatory or signatories of the family.
There is also the need to take precautions against fraud in various shades and shadows. One area to note is to ensure that the seller is properly identified and actually signed the documents. Several years ago a real estate investor bought some acres of land from a family and thereafter travelled outside the country. He then sent his brother who did not know the authorized signatories to go to the sellers and collect the signed agreement from them. They gave him the agreement but some years after they encroached on his land and claimed that he did not buy through the authorized family representatives. The matter went to the court and one of the key discoveries that cost this investor his investment was that they proved that one of the names on the agreement was that of a member of the family that had died several years prior to the transaction.
The need for due diligence and reading or understanding the fine prints is not limited to land transactions with individuals or private companies alone. In fact, you need to be more careful when dealing with the government because they possess the machineries of the state with which they could enforce their will. Always ensure that the land you want to buy is not under government acquisition and find out what is the approve use.
If you have a Certificate of Occupancy on the land it is important to understand that there are several clauses written on it specifying your responsibilities. If you fail to carry out any of these obligation you may provide the government with the basis that they need to revoke your Certificate of Occupancy. You need to be extremely careful in this regards if your land is located in a prime area.
Someone share with US bought a piece a land and a few years down the line he doesn’t even know where it is anymore. Development came and the landscape totally changed. I blame him for not visiting the place frequently HERE WE COME IN AS YOUR WATCH DOG
The real problem is that people don’t even know, what and what document they should collect when they buy a land, land purchase is not something anyone should jump into without due consultations.
Here in LAGOS the trick & dribbling is to start building immediately you buy the land, the worst case scenario is that you will be asked to pay more money if anything foes wrong,
Someone share with US brother- inlaw bought 2 plot of land in BOJUBOJU some 6 years ago, the man that owns the land resides in the US (everywhere is US to the SCAMERS even if the owner is in his room hiding) so the transaction was between my inlaw and the land agent. He(my inlaw) fenced the lands. January two year ago when he started moulding blocks for his house, he was confronted by a man who claims to be the true owner of the land. It turned out that the agent thou he was authorized to sell the land, only paid half of the money my inlaw gave him to the owner ( claiming he had family issues at that time and had to use part of the money, that he was planning to balance the rest when sorts him self out) . Then he was given time to bring out the rest of the money which he failed to do, it got to a point the owner of the land said that even if the man brings out the money, that he is no longer willing to sell at the old price, at this time lands at the said area was now selling like hot cake. The owner was demanding for another 2 million naira, my inlaw out of desperation was willing to pay but the deal breaker was that my inlaw was also asked to pay the money the dubious agent ate. So at the end he lost the land, 6 years of investment, and part of his money (the owner of the land was kind enough to refund the money the agent gave him)
