In Nigeria, the Certificate of Occupancy (C of O) is one of the most vital documents in land ownership and real estate transactions.
Serving as the legal proof of a person’s right to occupy and use a parcel of land under the Land Use Act of 1978, it ensures that land dealings are secure, valid, and compliant with state regulations.
For investors, developers, and property owners, understanding the importance of a Certificate of Occupancy in Nigeria is essential for avoiding costly disputes and protecting your real estate investments. Let’s proceed to examine the importance of a certificate of occupancy in Nigeria in land transactions.
7 Importances Of Certificate Of Occupancy In Land Transactions
1. Legal Proof of Ownership
A Certificate of Occupancy is the most recognized evidence of ownership for land under a Statutory Right of Occupancy.
Issued by the State Governor (or the Minister for Lands in the Federal Capital Territory), it confirms the holder’s legal right to occupy and use the land for a specific purpose and duration – typically 99 years.
The courts have consistently upheld their authority. In Adole v. Gwar, the court emphasized that a C of O serves as prima facie evidence of ownership, meaning it stands as valid proof until proven otherwise. However, it does not automatically override existing valid rights unless such rights have been lawfully revoked.
2. Protection Against Land Disputes
A valid C of O offers protection by:
- Establishing legal ownership that can be defended in court against third-party claims.
- Clearly defining land boundaries helps prevent encroachment.
However, possession of a C of O does not make ownership absolute. Courts have held that its issuance does not extinguish prior valid interests. For instance, in Ilona v. Idakwo (2023), the court ruled that a C of O issued to one party cannot invalidate another’s valid C of O without proper legal process.
3. Facilitating Secure Land Transactions
The Certificate of Occupancy is indispensable in real estate dealings, including sales, leases, and mortgages. It:
- Confirms the owner’s right to transfer or lease the land.
- Assures buyers, tenants, and financial institutions that the property is free from encumbrances (subject to verification at the Land Registry).
In El-Asbab Hotel & Investment Industries Ltd v. Eco Bank Nigeria Plc, the court recognized a C of O as a valid title deed for securing a loan, underscoring its significance in financial transactions and real estate financing.
4. Requirement for Governor’s Consent
Under Section 22 of the Land Use Act, any sale, transfer, or mortgage involving land with a C of O requires the Governor’s Consent.
This provision ensures that every land transaction is legally valid and transparent.
Failure to obtain this consent renders the transaction void, as courts have nullified many transfers executed without compliance. For investors, this step is non-negotiable to ensure that ownership rights are enforceable.
5. Evidence of Compliance with the Land Use Act
The issuance of a C of O demonstrates compliance with the provisions of the Land Use Act, including:
- Payment of ground rent and statutory fees.
- Use of land strictly for its allocated purpose (e.g., residential, commercial, or agricultural).
This compliance not only validates ownership but also reinforces accountability and responsible land use.
6. Enhancing Land Value and Marketability
Properties with a valid Certificate of Occupancy in Nigeria are generally more valuable and marketable.
Buyers, investors, and lenders prefer properties backed by a C of O because:
- It reduces the risk of ownership disputes.
- It simplifies due diligence and increases investor confidence.
In practical terms, a plot of land with a C of O can command a higher resale value or serve as collateral for financing, compared to an unregistered property.
7. Limitations of a Certificate of Occupancy
Despite its importance, a C of O has limitations:
- It does not guarantee absolute ownership if there are unresolved customary or pre-existing claims.
- It can be revoked by the Governor for overriding public interest, provided due process is followed and adequate compensation is paid.
Therefore, property owners and investors must conduct thorough title verification and maintain compliance to safeguard their interests.
Conclusion
The Certificate of Occupancy in Nigeria remains the cornerstone of legitimate land ownership and real estate investment. It establishes proof of title, enhances property value, and facilitates secure transactions.
However, investors must go beyond possession, ensuring due diligence, authenticity verification, and compliance with legal requirements before purchase or transfer.
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Navigating property laws in Nigeria can be complex, but the right legal guidance makes all the difference.
At Scotts Legal, we provide expert support in property acquisition, title investigation, registration, and property management, helping real estate investors make confident, compliant, and secure decisions.
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