‘ How absence of land titles impedes real estate growth’
DESPITE the gains of ease of doing business in the real estate sector, over 60 per cent of Nigeria’s 923,000 square kilometres land areas and property owners are without titles due to the cumbersome process of obtaining Certificate of Occupancy ( Cof- O) and other documents.
The Guardian learnt that inefficient land registration and titling procedures have negatively impacted the development timelines and discouraged investment in the sector. For instance, it took some property owners in Lagos about six years before getting their documents.
The real estate sector is inundated by uncertainty of title acquisition and perfection of title, consent, revocation and re- certification issues. Besides, land costs are unduly high and exacerbated by transfer and perfection costs.
The Nigerian constitution vested the responsibility of issuing titles on state governments, as all lands are vested in the governors according to the Land Use Act ( LUA) of 1978. Industry stakeholders have over time called for the review of Section 1 of the Act, which allocates enormous power to the governors, many times leading to abuse and uncertainty of title for those who need it.
According to the 2018- 2019 Nigeria Living Standards Survey ( NLSS) report by the National Bureau of Statistics ( NBS), 71.4 per cent of landlords sampled across the 36 states and the Federal Capital Territory ( FCT) are without titles. The report published by NBS shows that 13.2 per cent of the country’s property owners have title deeds, while only 8.1 per cent have the C- of- O.
Among critical setbacks observed by stakeholders are rigorous processes, official corruption, long duration and high cost of documentation coupled with the inertia by authorities to distort land policies contributes to increased property values and unaffordability of land for urban poor and increasing formation of informal settlements in cities.
Findings in some states show that individuals are required to pay 10 per cent capital gains, others three per cent or one per cent and in other cases the price is relative to the cost of land.
However, only about 48 per cent of the states require valuation to determine value of land and incidental cost to pay for land title registration, while the rest is based on the rule of thumb or whatever the governor decides, which may not be fair to property owners or the person registering the title.
Statistics revealed that between 2018 and 2023, the Federal Government approved 7,985 titles. It approved and issued 1,300 certificates to owners of verified Federal Government land as of October 25, 2018. Speaking recently, the Minister of Works and Housing, Babatunde Fashola, who inaugurated eC- of- O said the government signed about 6,685 in the eight- year tenure of President Muhammadu Buhari.
Across the states, The Guardian gathered that a substantial number of property owners often abandon the processing mid- way, thus, leaving the government agency to grapple with a huge number of uncompleted applications associated with non- submission of vital information and other documents. This, it was gathered, is not unconnected with the bureaucratic bottlenecks and cost of applications.
With states like Lagos and others introducing e- application for land documentations, the move has yet to bring a far- reaching result as people who provide the ecertificate still constitute bottlenecks in the process.
In Ogun State, the government issued only 4,000 certificates of occupancy to landowners as of 2022, while in Lagos, Akinwunmi Ambode administration signed a total of 5,172 certificates in three years and from May 2019 to May 2022, 727 electronic C- of- O were
signed by the Babajide Sanwo- Olu administration, asides those for regularisation.
Also, in Borno, Governor Babagana Zulum issued 775 C- of- O in his first term in office. Over the years, residents’ attitude to the process has been lukewarm as a result of the observed encumbrances in the procedures. Without titles, it is difficult to transact and this leads to inability to convert real estate to capital and high incidents of fraud, which casts a pall of low integrity on real estate and real estate transactions.
Speaking on the development, President, International Real Estate Federation, ( FIABCI), Mr. Gladstone Opara, said the hiccups in obtaining titles to properties is a major
impediment to real estate development, “it has been proven all over the world that besides boosting real estate, titles help in the issue of identification indigenes of a nation and where they live.
“If you have a proper title, using an online documentation process, it will help in combating crimes. You can’t use a letter of allocation to get a loan and can’t put the property on the list of what you have because some organisations will not accept it rather prefer C- o- O and others. As long as such applications move from table to table and are done manually, the system can’t stop corruption.”
He said the current issues about lack of documentation seem to be man- made, stressing that in advanced nations; the request is captured electronically and with speed delivered in a few days.
“The Lagos State government has not been magnanimous enough to ensure title ownership because they keep increasing the cost, sometimes up to the value at which you bought a property and most times, people are discouraged from doing their documentation", Opara said.
He said since the problems are known, the solutions are also known but the government needs to actualise solutions like improved online documentation proffered over the years.
Former chairman, Lagos branch, Nigerian Institution of Estate Surveyors and Valuers ( NIESV), Adedotun
Bamigbola, said easing access to property titles is one of the basic considerations for ease of doing business and ensuring property title is accessible to individuals or organisations.
"The key thing is that land is a critical asset for any development, unfortunately, the LUA has not fulfilled its potential, although we have used it for about 44 years. The law put the governors in charge of land titles and in the process used it as a political tool in most cases.
“Some of them like Lagos have used it as a developmental tool, but the state has also used it for political purposes. There have been cases of people that have land and the purpose of taking the land from them was not justifiable.