Governor's Consent: why a Lagos sale is not finished when the money moves

Every few months someone brings us a file that looks complete. Purchase price paid in full, a signed deed of assignment, photographs of the handover, keys in a drawer. Then a bank declines it as collateral, or a buyer's solicitor asks one question, and the whole thing stops. The missing piece is almost always the same.

What you actually bought

The Land Use Act of 1978 vests all land in each state in the Governor, who holds it in trust for the people. That single sentence changed Nigerian property law permanently. You cannot own land in Lagos in the sense that word carries in England or the United States. What you acquire is a right of occupancy, in practice a 99-year lease from the state, and what you trade is that right, not the soil.

Section 22 of the same Act says a holder of a statutory right of occupancy shall not alienate it by assignment, mortgage, transfer of possession, sublease or otherwise without the consent of the Governor first had and obtained. Section 26 says any transaction that purports to do so is null and void.

People assume this applies only to land the state formally granted. It does not. In Savannah Bank of Nigeria Ltd v Ajilo, the Supreme Court confirmed that the consent requirement reaches holders of deemed rights of occupancy too: land held before the Act came into force, family land, land your grandfather farmed. The consent regime covers effectively everything.

A sale without consent is not a sale that failed. It is a sale that has not finished.

The courts have softened the harshest reading of section 26. A transaction entered into while consent is being sought is treated as inchoate rather than void from the outset; the parties remain bound to each other, and the transaction only collapses if consent is finally refused. That is a real protection. It is not a reason to stop at the deed.

What consent costs

Lagos publishes its charges. The Lands Bureau schedule puts the consent fee at 1.5 per cent of the assessed value of the property, with capital gains tax at 0.5 per cent, stamp duty at 0.5 per cent and the registration fee at 0.5 per cent. Three per cent in aggregate, before your lawyer's fee and the incidentals.

The number that catches people out is not the percentage. It is the word assessed. The Bureau's valuers set the figure, and they are valuing the property, not reading your contract. If you negotiated a distressed price from a seller who needed to move quickly, the assessment can land well above what you paid, and your three per cent is calculated on their figure rather than yours. Budget against a realistic market valuation, not against your receipt.

What the application takes

The file the Bureau expects is not complicated, but it is unforgiving about gaps:

• The completed consent application form and the deed of assignment in multiple executed copies
• A certified true copy of the seller's root of title: the Certificate of Occupancy, or the earlier deed with its own consent endorsement
• A survey plan drawn by a registered surveyor and lodged with the Surveyor-General
• Tax clearance certificates for both parties, covering three years
• Evidence that Land Use Charge on the property is up to date
• Current photographs of the property, and evidence of payment against the Bureau's demand notice

Applications stall on the dull items far more often than the difficult ones. A seller who has not filed tax returns. A survey that does not agree with the Bureau's records. An unresolved charge registered against the property by a bank the seller forgot about. None of these are dramatic; all of them stop the file.

How long it takes

Assume six months for a clean file and treat anything faster as luck. That is not the official service standard and it is not what anyone will tell you at the counter, but it is what we plan around, and planning around it is cheaper than being surprised by it.

The delay matters commercially. Between paying and perfecting you hold an asset you cannot mortgage, cannot easily sell on, and cannot defend as cleanly as you would like if the state ever moves to revoke for overriding public interest under section 28.

The question to ask before you commit

Ask for the seller's root of title before you discuss price seriously. Then trace it backwards.

If they hold a Certificate of Occupancy in their own name, consent is the single step in front of you. If they hold a deed of assignment from a previous owner, check that that transaction was itself perfected. A gap anywhere in the chain does not stay with the person who created it. It becomes yours, and you will discover it at the worst possible moment, when you have found a buyer of your own.

We check this before a property is listed with us, and we would rather lose a listing than place one we cannot explain. If a title cannot be perfected, that is something to know now, not after your money has moved.