The Importance of Conducting Due Diligence in Land Procurement

Like every other country, buying land in Nigeria is a significant investment, hence, careful consideration and a meticulous approach should be employed.

One of the major steps you must not overlook is due diligence. Investing in land can cost a fortune. For many people, it can be a significant outlay that they hope will generate wealth in the future.

If taken with levity, you risk losing all your investment and fortune. By understanding the importance of due diligence in land procurement you can avoid any unforeseen troubles, potential disputes, legal issues, and financial loss.

Follow along to learn more about how to do your due diligence when buying land in Nigeria.

What is Due diligence in Land procurement?

Due diligence in land procurement can be relative, but it is based on the same concept. In a nutshell, due diligence involves adopting a robust and comprehensive process of verifying every detail about a land or property, before committing to buy it.
It can also involve scrutinizing every detail and leaving no stone unturned. To do this, check the legal status of the land, review the ownership history, and evaluate any potential hurdle that might come up along the way.
Due diligence is more than just another step in the land purchase process, it is the foundation of land purchase and it guarantees a problem-free property with long-term security.
Let’s go over the main reasons why you need to be vigilant when investing in real estate and buying land in Nigeria.

Why is due diligence crucial in land procurement?

There are many reasons why you need to perform due diligence when you want to procure land. The obvious is the continuous rise of con men who try to sell the same piece of land or property to multiple buyers. Here are a few more reasons:

Avoid Legal Dispute:

The main reason why you need to conduct due diligence in land procurement is to avoid potential legal issues. Land disputes are commonplace now mainly due to real estate frauds.
Here is one of our favorite Nigerian land purchase tips, “make a surveyor your best friend.” In Nigeria, undefined land boundaries and encroachment make land ownership contentious, for this reason, you need your surveyor.
When you carry out due diligence on land, you can uncover hidden legal issues related to the land and keep yourself away from ownership disputes or unnecessary lawsuits.

Confirm Ownership Authenticity:

When purchasing land in Nigeria, you can never be too cautious. Land scams are no stranger in the real estate industry, and many have fallen victim to this.
When you conduct due diligence, you are afforded the luxury of verifying the authenticity of the land seller. That way you know if the land you are looking to buy is legit and the seller has the legal right to sell.
You can do this by meticulously analyzing all associating land documents (C of O, survey plans, and deed of assignment) with the help of your lawyer to confirm they are legit and valid.

Validate Land use:

Part of due diligence is taking time out to validate the proper useability of a land. Ensure that the land you want to purchase suits your intended purpose.
For example, due to location and soil topography, some lands are fit only for agriculture. Also, some lands are more residential than commercial. Do not make any assumptions, ensure that you conduct due diligence, and be sure the land is tailored to meet your intended purpose.
Due diligence helps you understand the zoning regulations and makes you aware of the necessary permits you need, this is another great Nigerian land purchase tip.

Avoid Encumbrances and overpaying:

Encumbrances are claims or liens on a landed property by an outsider other than the seller. This can significantly impact the use and transfer of a property.
The most prevalent encumbrance is unpaid taxes and bills by previous owners. With due diligence, you get to uncover all of these and avoid them. You also get a fair value for the land, which helps you to pay the land’s worth and avoid excesses, saving you a lot of money.

Who should be involved in The Due Diligence process?

When it comes to purchasing land, you can’t do it alone. To avoid major financial loss there are certain people you should involve in the process.
Majorly, yourself, your lawyer, a surveyor, and a land valuer in some cases.
Lawyer: A lawyer will help you with all the legal aspects of the land purchasing process. They’ll also oversee document verification and identify legal encumbrance to eliminate any complexity with the land purchasing process.
Valuer: You cannot tell the true value of any land on your own. You need the help of experts so that you can pay the right price and avoid overspending.
Surveyor: The surveyor helps with the integrity aspect of the land. They also help confirm the actual size of the land with all boundaries accounted for. A surveyor ensures that the land is not trespassing on any government property, designated spots for roads, public amenities, or waterways.
Yourself: Besides hiring the right people to help in the due diligence process, you also have a role to play. Going for a physical inspection is a key part of due diligence. You get to see some things for yourself before making any final decisions. You can also do the property verification yourself, by visiting the land registry amongst other things.

Conclusion

In summary, if you want to protect your investment, you must take due diligence seriously. Aside being a legal requirement, it is a must-do if you want to buy a dispute-free land in Nigeria.
With the few Nigerian land purchase tips provided in this post, you will be able to navigate your way through the Nigerian real estate market and avoid common pitfalls most land buyers encounter.
It is worth noting that the cost of due diligence is insignificant compared to the cost of purchasing land with disputes and legal issues hovering over it.
Make the right choice and protect your investment.