Property Legislations Every Estate Agents Should Know – Bolaji Ramos

Mr. Ramos making during his lecture.

A Seminar Paper and Lecture Note presented by Bolaji Ramos at the Seminar of the Association of Estate Agents in Nigeria (AEAN) Lagos Chapter


The practice of estate agency in Nigeria has become very well established in the modern times, more than it used to be some years back. From acting as facilitators of property transactions to serving as property managers and trustees of real properties, estate agents have continued to stamp their feet in the real property sector in Nigeria. An estate agent is a person (natural or juristic) authorized to act as an agent in respect of transaction(s) involving properties owned by another person. Because estate agents are professionals or they are deemed to be so, the law imposes certain obligations on them in their dealings with the properties of their principals or clients. While such obligations are many (the categories of which are not close), one major obligation an estate agent owes to his principal or client is the duty to be conversant with laws that have a bearing on estate agency in Nigeria.

The principle of law is that ignorantia juris non excusat: that is, the ignorance of the law is not an excuse. This principle applies to estate agents in their dealings with properties of their principals or clients. An estate agent who fails to have an appreciable amount of knowledge of laws regulating or relating to estate agency in Nigeria may easily, apart from being deficient, incur liabilities in respect of his dealings with his principal or clients’ properties. This singular point suggests why it is important for estate agents to know the laws regulating real property transactions in Nigeria and the different types of transactions relating to estates in Nigeria. For the purpose of this paper, the salient points in fourteen (14) of the most important laws in Lagos State and Nigeria generally, governing real estate practice and estate agency in Nigeria will be highlighted and succinctly explained. 

Property Transactions & Documents That May Involve Estate Agency:

The following are transactions and documents that estate agents need to be familiar with. Some of these transactions and documents are what empower estate agents to act and also determine the extent of their powers and engagement:

  1. Pledge
  2. Trust/ Trust Deed
  3. Gift of Land/ Deed of Gift
  4. Gift of Landed property/ Deed of Gift
  5. Lease/ Deed of Lease
  6. Tenancy/ Tenancy Agreement
  7. Property Management
  8. Power of Attorney
  9. Sale of Land/ Land Purchase Agreement
  10. Sale of Land/ Deed of Assignment
  11. Power of Attorney
  12. Mortgage/ Mortgage Deed
  13. Will
  14. Assent
  15. Release/ Deed of Release
  16. License/ License Agreement
  17. Gazette
  18. Royal Grants
  19. Registered Court Judgment
  20. Letter of Administration/ Probate Grant.

Laws (Legislation) That Have A Bearing on Estate Agency:

One of the incidents of federalism that is practised as a system of government in Nigeria today is that, in addition to the powers of the National Assembly to make laws for the whole federation, the thirty-six (36) component States in Nigeria are also empowered (within the ambits of the Constitution) to make laws to regulate the affairs of their States. This has led to a situation where the overall body of laws governing estate agency in Nigeria comprises both Federal and State Laws. For this reason, I shall be referring to the laws in Lagos State (which most States have transplanted) and some Federal Laws as well.

These laws may be classified into two categories: (a.) the ones that do not purely relate to property taxation and the ones that relate to property taxation.

(A) Non Property Taxation Laws

  1. Land Use Act 1978

a) This is about the most popular law governing real estate practice in Nigeria. It was first enacted by the Federal Government in 1978, but Lagos State has since domesticated it and enacted its own Land Use Act (Cap L60, Laws of Lagos State 2003).

b) The most significant thing about the law is that it vests all the land in each state in Nigeria in the Governor of the State to hold in trust. As a trustee to all the land, the Governor becomes the overlord while the original exclusive owners technically become tenants.

c) The Supreme Court in Nkwocha v. The Governor of Anambra (1984) 6 S.C. 362 has said that “the tenor of the Act as a single piece of legislation, is the nationalization of land in the country by the vesting of its ownership in the State, leaving the private individual with an interest in land which is a mere right of occupancy…”

d) The law converted and reduced the fee simple (exclusive ownership of land) of the original exclusive owners to right of occupancy (often for a period of 99 years) which is often evidenced by the Certificate of Occupancy.

e) Since the commencement of the law, no land-owner can sell, lease, assign or transfer his/her land without first seeking and getting the consent of the Governor. Any land transaction in this regard without the consent of the Governor will be null and void.

2. Urban and Regional Planning and Development Law of Lagos 2010

a. This law provides for the administration of physical planning, urban development, urban regeneration and building control in Lagos state and for all connected purposes.

b. The law assigns the overall administration and responsibilities of planning and development in Lagos State in the hands of Lagos State Ministry of Urban and Regional Planning. These administration and responsibilities are to be carried out through three agencies in the Ministry: (i) Lagos State Planning Permit Authority (PPA); (ii) Lagos State Building Control Agency (BCA); and (iii) Lagos State Urban Renewal Agency (URA).

c. The PPA is responsible for giving permits for any form of physical development on land in Lagos State. Developers and builders are mandated to obtain permits first before commencing any construction on land in any Lagos State. The BCA is responsible for ensuring compliance with building control regulations. It has powers to remove illegal and non-conforming buildings. The URA monitors and identifies areas in Lagos State qualified for upgrading, and it advises the State on redevelopment or renewal programmes accordingly.

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d. Failure to obtain requisite permit before development or failure to comply with approved standard may lead to issuance of (i) Contravention Notice; (ii) Stop Work Order; (iii) Quit Notice; (iv) Seal-up Notice; (v) Regularization Notice; and (vi) Demolition Notice

e. The law also have criminal sanctions which may be payment of fines of up to N500,000 or one month community services, or both.

3. Lagos State Property Protection Law 2016

a. This law is a statutory response to the menace of the omo-onile (land grabbers) in Lagos State. It majorly prohibits four conducts in relation to land in Lagos State: (i) forceful entry to landed properties; (ii) illegal occupation of landed properties; (iii) violent in relation to landed properties; and (iv) fraudulent conducts in relation to landed properties.

b. Some parts of the law have retrospective effects. For example, people that have forcefully obtained the land of other people had only three (3) months grace from the commencement of the law to vacate the land, otherwise they will be deemed to have committed an offence punishable by ten (10) years imprisonment.

c. Then law also punishes trespassers and encroachers who, having been asked to vacate the land, remain in possession. Selling land or landed properties without authority of the owner is also a punishment offence under the law. Acts (by the omo-onile or touts) such as demanding money from the owner or purchaser of the land before allowing them to carry out construction on the land are now punishable with imprisonment.

d. For real estate practitioners (such as lawyers and estate agents) who facilitate land transactions between parties, knowing that such transaction contravene the law or any other law(s), they will be criminally liable for aiding and abetting commission of offence.

4. Tenancy Law of Lagos State 2011

a. This law focuses mainly on three things: (i) to regulate the rights and obligations under tenancy agreements; (ii) to regulate the relationship between landlords and tenants; and (iii) to make provisions for recovery of premises.

b. The law applies to the whole of Lagos, except (i) Apapa; (ii) Ikeja GRA; (iii) Ikoyi; and (iv) Victoria Island. What this means is that property negotiations and transactions in relation to properties in these four areas can be done without compliance with and outside the provisions of the law.

c. Whether or not tenancy agreements are drafted by parties, the law already deems that once a land owner gives premises to a person for consideration, a tenancy exists between them even if it is not in writing.

d. The law respects the freedom of contract between the parties and allows them to specifically decide and agree on the terms of their tenancy agreement. If, however, they fail to agree on those terms, the provisions of the law in relation to those terms will prevail on them and they will apply. A good example is the length of the tenancy.

e. Lease agreements will arguably come under the regulation of the law. This is because a lease practically has the facsimile of a tenancy, and the law recognizes a fixed tenancy which is on all fours with a lease. This is also in line with the provisions of the Registered Land Law of Lagos State CAP R1 that recognizes periodic tenancies as leases.

5. Land Registration Law 2015

a. This law is now the most comprehensive law in Lagos State because it came as a consolidated enactment that replaced some of the existing land related laws, that is: (i) the Registered Land Law (discussed above); (ii) the Registration of Titles Law (discussed above); (iii) the Land Instrument Registration Law; and (iv) Electronic Documents Management Systems Law.

b. The law retains sub substantially all the points discussed above under the Registered Land Law and the Registration of Titles Law.

c. The law establishes the Land Information Management System (LIMS) for archival of documents, online searches, online payments, certification of documents and licence for users. The LIMS can only be used by licensed users. Registration of all land documents through the LIMS has been made mandatory. Searches can be conducted through the LIMS and letter of accreditation may be issued through the LIMS.

d. The makes it mandatory for every document that has interest in or title to land to be registered. For documents that require Governor’s consent, the consent must be secure first before registration, and it has to be registered within 60 days after the consent of the Governor is secured.

e. The following documents are mandatorily registrable under the law: (i) sub-lease for a term of 5 years and above (requires Governor’s consent); (ii) mortgage transactions; (iii) long possession of land through uninterrupted adverse possession (12 years against individuals & 20 years against the state); (iv) power of attorney dealing with land; and (v) judgment of court.

f. However, any person has power to assign or is entitled in law or equity to any land MAY apply to be registered.

g. Deed of assent or Vesting Deed from an executor(s) does not need Governor’s consent. Generally, succession to land under a will or through intestacy does not require registration neither does it need Governor’s consent under the law.

6. Legal Practitioners Act LFN 2004

a. This is the law that regulates the legal profession in Nigeria, including the relationship between lawyers and their clients.

b. According to this law, only lawyers are legally allowed prepare documents for all transactions relating to land and landed properties. As such, tenancy agreements, deed of lease, mortgage deed, property development agreement and other documents relating to immovable properties, grant of probate and letters of administration.

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c. What this means is that estate agents, realtors, property owners and other persons who prepare documents relating to land or landed properties have committed an offence. Under the law, the penalty is imprisonment for a term of two years.

7. Illiterates Protection Law

a. This law protects illiterate persons for the purpose of entering into transactions who may not fully understand, either because the language used are not understood by them or the nitty-gritty of the transactions are not known to them.

b. The law provides that any person who writes a letter or any document on behalf of an illiterate person must do the following:

i) Write his name and address, acknowledging himself as the writer;
ii) Confirm that he was instructed by the illiterate person to write the document on his behalf;
iii) Confirm that what he wrote in the document correctly represents the instruction given to him by the illiterate person;
iv) Confirm that he read and explained the contents to the illiterate person and he understands the contents;
v) Confirm that the signature or mark of the illiterate person was appended on the document;
vi) Confirm whether or not he charged the illiterate person a fee or asked for a reward.
vii) State the nature of the reward or the amount charged; and
viii) State the number of copies of the document made, including the original.

c. Apart from the civil liability that may be incurred by any estate agent or other person who writes a letter or prepares a document for an illiterate person without complying with the requirements above, the law also provides a penalty of 6 months imprisonment for such agent for omission or false statement.

8. Wills Law of Lagos State

a. This law focuses on the way and manner a will should be executed and the procedure for distributing the estate of the testator among the beneficiaries.

b. The will is one of the documents that may be used to confer authority on an estate agent to act for the agent, executor or trustee of the testator.

c. When an estate agent is to act based on a will, one major thing to look out for is whether probate has been granted in respect of the will. Grant of probate is what gives the dispositions in a will the validity. It is grant of probate that empowers the agent, trustee or executor of a will to distribute the estate of the testator in line with the will.

d. Grant of probate is the order of court that empowers an estate agent, a trustee or an executor to distribute the testator’s properties, and the grant is often made after reading of the will at the Probate Registry of Court.

9. Administration of Estate Law

a. This law is the twin brother of the Wills Law. Like the Wills Law, Administration of Estate Law also focuses on the way and manner the properties of a deceased person should be managed and distributed.

b. One major difference between the Wills Law and the Administration of Estate Law is that while the former substantially applies in situations where the owner of the properties made a will on how his properties should be distributed and/or managed, the latter concentrates majorly on how the properties of the owner should be distributed and/or managed in instances where the owner of the properties did not make a will.

c. Under the law, what empowers an estate agent, a trustee or an executor to act for the deceased owner or his beneficiaries is called Letters of Administration.

d. Letters of Administration are made by the order or directives of Court, and without the Letters granted by the Court, any estate agent or other persons that act in respect of the properties of the deceased may be criminally liable and civilly liable as an executor de son tort.

(B.) Property Taxation Laws—

10. Land Use Charge Law 2018

a. This law is said to consolidate all property and land based charges in Lagos State and makes provisions for levying and collecting land use charge in respect of properties in Lagos state. The law came to force on 8th February 2018, and it repealed the 2001 version.

b. The land use charge is a form of property tax and all the properties or owners of properties in Lagos are expected to pay it, apart from the properties or owners that are exempted. The properties that are exempted are: (i) properties belonging to religious organization and used exclusively as a place of worship or religious education; (ii) properties used as public cemeteries and burial grounds; (iii) properties used as registered educational institutions; (iv) properties used public or private libraries; (v) properties used as palaces of recognized Obas and Chiefs; and (vi) properties specifically exempted by the Governor of Lagos State.

c. Under the old Land Use Charge Law 2001, the person liable to pay Land Use Charge was the owner of the property. This means that occupiers of the property such as lessors, sub-lessors, lessees, tenants, licensees and trespassers were not liable to pay. This position has changed under the Land Use Charge 2018 where liability to pay may exclusively or jointly fall on the owner on the one hand and occupiers such as lessees, tenants or trespassers on the other hand, depending on a given situation.

d. The law comes with different classifications of properties with different rates attached to the classification.

1. Residential property exclusively occupied by the owner 0.076% of the market value of the property
2. Residential property occupied jointly by the owner and third parties; 0.256% of the market value of the property
3. Residential property without owner in occupation (i.e occupied only by third parties) 0.76% of the market value of the property
4. Residential property occupied by a pensioner Exempted
5. Commercial property (used by occupier for business purposes) 0.76% of the market value of the property
6. Industrial property of manufacturing concerns 0.256% of the market value of the property
7. Vacant property and open empty land 0.076% of the market value of the property
8. Lagos State Government properties.


      e. The law gives 40% general relief to all the liable people under the law which is automatically deducted from what is assessed as payable. It also recognizes specific reliefs as follows:


1. Pensioner (owner occupied) 100% 60 years and above
2. Aged persons (owner occupied) 10% 70 years  and above
3. Age of property 10% 25 years and above
4. Person with disability (owner occupied) 10% ……
5. Long possession by owner 5% 12 years and above
6 Federal and other States Government 20% Non-revenue generating
7. Partial relief for organizations 20% Non-profit making
8. Payment within 15 days of demand 15% …….


f. Due the outcries by the general public on the aggravation of chargeable rates in the law, the Lagos State House of Assembly is presently reviewing the law.

11. Capital Gains Tax Act

a. This Act was first enacted by the Federal Government in 1967, but Lagos State has since domesticated it and enacted its own Capital Gains Tax Act (Cap C1, Laws of Lagos State 2003). The law creates a type of tax known as capital gains tax. The tax is charged on gains accruing to any person (company inclusive) on disposal or sale of assets.

b. Under the law, what is defined as ‘assets’ is wide. Assets include real property, incorporeal properties (such as shares, stocks and debentures), currency (other than Nigerian currency) and all other forms of property. This applies to both gains made from the properties sold in Nigeria and properties sold outside Nigeria whose proceeds are brought into Nigeria.

c. Gains made from disposal of sale, lease, transfer, an assignment, a compulsory acquisition or any disposition any form of property are chargeable under the law at the rate of 10%.

d. A chargeable gain is reached by deducting the allowable deductions from the consideration received for the disposal of the assets. Allowable deductions consist of money or money’s worth given by a person (or on the person’s behalf) wholly, exclusively and necessarily to acquire the asset, together with the incidental costs of disposing the asset.

12. Stamp Duty Law of Lagos

a. The law provides for levying of a tax known as stamp duty on instruments. Instrument is defined as including every written document. Examples of instruments include agreements, deeds of lease, power of attorney, mortgage deeds, trust deed, deed of release, sub-leases, deeds of assignment and others.

b. An instrument may be stamped with an adhesive stamp (i.e postage stamp) or an impressed stamped. Generally, stamp duty in respect of instruments comes in form of impressed stamps. For an instrument to be stamped with an adhesive stamp, it must be expressly stated in law.

c. Methods of charging: Stamp Duty on an instrument may be charged as a fixed amount or as ad valorem. It is often charged as fixed amount where there is no value or monetary consideration mentioned in the instrument. It is often charged as ad valorem where there is value or consideration mentioned. Ad valorem simply means based on the value.

d. Time for stamping: Instruments requiring adhesive stamps are expected to be stamped on or before execution of such instruments. Instruments requiring impressed stamps are expected to be stamped with forty days from its execution.

e. Where an instrument that is required to be stamped is not stamped, it will not be recognized by court and it may be difficult to enforce the rights and obligations accruing pursuant to the instrument. For the purpose, it is necessary for an estate agent to confirm whether the instrument pursuant to which he is acting is stamped.

13. Value Added Tax Act

a. This law applies to service providers and traders in goods. VAT is a form of tax that is levied on a person buying goods or being rendered services.

b. Estate agents/companies rendering services to their clients or property owners are expected to levy VAT on the amount due for the services rendered or goods supplied. The chargeable rate is 5%.

c. Estate agents/companies are expected to register with the FIRS for collection and remittance of VAT annually.

d. Under the law, the person (e.g an estate agent) who has the responsible to levy VAT is the taxable person. However, the one that bears the burden of paying the tax is the consumer of the goods or services (i.e the clients or property owners).

14. Personal Income Tax Act

a. This law imposes tax on gains made by individuals, communities, families, executors and trustees.

b. The law treats an estate as a taxable entity. Therefore, an estate agent or trustees of an estate may be charged personal income tax in the name of the estate in respect of income arising to the trust or estate. The chargable rate is 10%.

c. Trustees and estate managers are expected to, in compliance with the law, file annual tax returns in the name of the estate or trust. Failure to do this may amount to criminal prosecution and civil liability.

Copyright 2018


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