When we discussed Real Estate Investing in Nigeria, we explained that real estate is a low-risk investment. The most dreadful risk in real estate investing in Nigeria is land scams. So, knowing the rules needed to avoid land scams is very essential.
A land scam is when a buyer parted with money and either got nothing in return or got a substandard property. It is a fraudulent sale of land or house.
This can be exemplified by a land deal a relative had some years ago which went sour:
This brings us to a rule to observe when buying real estate in Nigeria. It is one of the most important rules to avoid land scams in Nigeria.
Rule 1: Ensure You Document Everything
Duly signed Deed of Assignment and Receipt of Payment are documents that every land buyer must have. All other existing documents, in the possession of the seller, must also be relinquished to the buyer. Without these dual documents, the land still belongs to the seller.
Video the documentation with your phone if you have any form of doubts.
Rule 2: Choose Bank Payment Over Cash
Please note that bank transactions are traceable and can serve as evidence if the deal goes sour. If you intend to buy land from omoniles, ensure documentation and payment are tied together as a single event that occurred the same day. After you make the payment, you should collect duly signed documents.
That brings us to a new rule:
Rule 3: Don’t Make Payment If They Are Not Available For Allocation
You are at the mercy of the seller once you have made the payment, but he is yet to allocate the land to you. Omoniles can be very trickish. They can show you an attractive location in the community but later allocate land to you elsewhere.
That brings us to a fresh rule:
Rule 4: Take Possession Immediately
Ensure you take possession of the land immediately by fully fencing and gating it irrespective of your intention to sell it off in the future.
At this point, the deal has become a full-fledged land scam.
That brings us to the rule below:
Rule 5: Investigate The Authenticity Of The Land And The Character Of The Seller
You will need your legal practitioner here. S/he needs to check:
This brings us to rules 6 and 7:
Rule 6: Never Pay Into An Agent’s Account
Request for the account detail of the owner and let it align with the names on the deed of assignment. The agent and seller should not use your transaction as a medium for settling their previous deals, especially when they had some disagreement.
Rule 7: Always Ask For The History Of The Land Before You Buy
A land history reveals what makes the seller of a piece of land the owner of the land e.g. inheritance, purchase, contract, etc. The land history will let you know if there might be complications or land disputes in the future. That way, you know whether you should avoid the piece of land or not.
Rule 8: Buy From Trusted Real Estate Companies
It is safer to buy land from a reputable real estate company or through a reputable real estate agent than to buy from omoniles. The world is presently a global village. You can always get information about a company’s fraudulent behavior online (if any) by searching Google. The easiest way to conduct such a search, for example, is to type site:websiteURL (fraud) or site:websiteURL (scam). Using De Donnies Homes as an example, you should type site:dedonnieshomes.com (fraud) as shown in the image below. You should follow up the links that appear to know if the organization involves in shady deals.
Thus, making sure the realtor is legit is not much of an issue.
Rule 9: Perfect Your Title With The Government
A two-story building erected on the land of a Nigeria-born American was demolished at Badagry two years ago. She bought the piece of land twenty years earlier, perfected the documents, and went back to the United States only to return to find a building on her land. She went to court, won the case, and requested the demolition of the house.
In summary, avoiding land scams bores down to caution, utmost caution! Be cautious all through and ask questions where necessary. Pause if you don’t get a convincing answer.
Don’t take a pre-shot video for it if you can’t make it for the property inspection due to the time or distance barrier because videos can be edited/doctored. You should choose a live video call on Messenger, Whatsapp, Zoom, Imo, etc.