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By Sandra Adeniran, Principal Partner

A properly conducted real estate due diligence process is the investigative procedure a buyer undertakes to verify all material facts about a property before completing the transaction. This comprehensive check confirms the seller’s title, uncovers any liabilities or restrictions, and ensures the property is physically and legally sound for purchase. In Nigeria, where land fraud is a significant risk, this process is not merely a formality; it is the fundamental safeguard for any property investment, protecting buyers from defective titles, government acquisition claims, and costly future disputes.

Executing a thorough due diligence check involves several critical stages. While the complexity may vary, these steps form the backbone of a secure property acquisition in Nigeria, particularly in a dynamic market like Lagos.

First, you must verify the seller’s identity and their legal capacity to sell the property. For an individual, this involves checking government-issued identification. For a company, it requires a search at the Corporate Affairs Commission (CAC) to confirm the company’s status and the directors’ authority. The Companies and Allied Matters Act 2020 clarifies that a company has the powers of a natural person, but verifying its standing remains a crucial first step.

Next is conducting a search at the relevant Lands Registry. In Lagos, this is the Lagos State Lands Registry. This search is vital to confirm the registered owner of the title and to uncover any encumbrances such as mortgages, liens, or court judgments against the property. This step formally reveals the ‘root of title’ and traces the history of ownership to ensure it is clean and transferable.

A Certificate of Occupancy is not a magical shield against all property issues; it is one piece of a much larger puzzle that due diligence must solve.

A property survey and charting follow the registry search. A registered surveyor must conduct a physical inspection to confirm the property’s boundaries match the survey plan. The survey coordinates are then ‘charted’ at the Surveyor-General’s office. This is a critical check to determine if the land falls under any government acquisition or is zoned for a different use, a common pitfall for unwary buyers. A recent presentation of certificates by the Lagos State government highlights the role of agencies like the Lagos State Building Control Agency (LASBCA) in certifying that buildings are fit for habitation, another layer of physical verification.

Finally, a legal professional must inspect the original title documents. These may include a Certificate of Occupancy (C of O), a Deed of Assignment, Governor’s Consent, or a Deed of Conveyance. Each document tells part of the property’s story, and only a physical inspection can detect forgeries or irregularities that a registry search might miss. This step often occurs alongside a physical site inspection to check for undisclosed tenants, boundary disputes, or access issues.

What Due Diligence Is Not

It is crucial to understand that due diligence is more than running a title search. A title search confirms ownership but reveals little about the physical state of the property, zoning restrictions, or potential tax liabilities. Likewise, it is not simply relying on an estate agent’s assurances. While agents facilitate transactions, their primary duty is to the seller. Independent verification is non-negotiable. The process is an investigation, not a simple confirmation. As our experience in real estate dispute resolution shows, skipping any step to save time or money is the most common path to litigation.

A clean report from the Lands Registry means nothing if the actual land is located in a government acquisition area or an erosion-prone zone.

This process also differs for various property types. Due diligence for undeveloped land focuses heavily on survey charting and zoning. For a commercial building, it expands to include tenant agreements, service charge accounts, and compliance with business regulations. A residential purchase may require investigating the history of the building’s structural integrity. Our advisory on investment planning for clients always tailors the due diligence checklist to the specific asset class and its associated risks.

Frequently Asked Questions

How long does real estate due diligence take in Lagos?

The timeline for due diligence in Lagos can range from 7 working days to over a month. A straightforward search on a registered title at the Lands Registry might take a few days, but charting at the Surveyor-General’s office and obtaining official reports can extend the process. Delays are common, especially if the records are not fully digitised or if there are queries on the title.

What are the typical costs associated with due diligence?

Costs are not fixed and depend on the property’s value, location, and the complexity of the search. Fees typically include professional legal fees and official fees paid to government agencies like the Lands Registry. It is wise to budget a percentage of the property price for legal services, which includes comprehensive due diligence as a foundational part of all our work on property transactions.

Can I conduct the due diligence process myself?

While technically possible, it is highly inadvisable. Navigating Nigerian land registries and legal frameworks requires specialised knowledge. A legal professional can interpret search results, identify red flags in title documents, and understand the implications of zoning laws or encumbrances. According to a legal guide on property acquisition, professional guidance is key to protecting your investment.

What happens after a successful due diligence check?

Once due diligence is complete and the reports are satisfactory, the next step is to finalise the transaction. This involves preparing and executing the Deed of Assignment (or other transfer instrument), paying the purchase price, and taking possession of the property. Following this, the process to ‘perfect’ your title begins, which involves obtaining Governor’s Consent and registering the deed at the Lands Registry.

Protecting Your Investment

A thorough real estate due diligence process is the only reliable way to secure a property investment in Nigeria. It moves the transaction from a basis of trust to one of verification, providing a clear and legally sound foundation for ownership. An incomplete check exposes you to risks that can lead to a total loss of investment. To ensure every detail is meticulously examined and your interests are protected, it is essential to engage a competent legal firm. If you are considering a property purchase, contact our team.

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