When buying land or property in Nigeria, two documents that frequently appear in property transactions are the Deed of Assignment and the Certificate of Occupancy (C of O). Because both documents are associated with land ownership and title, buyers sometimes assume that they serve the same purpose. They do not. A Certificate of Occupancy and a Deed of Assignment perform different legal functions. A Certificate of Occupancy is evidence of a right of occupancy granted or recognised under the applicable land law, while a Deed of Assignment is an instrument used to transfer an existing interest in land from one person to another. Understanding the difference is important because having one document does not automatically eliminate the need for the other. What Is a Certificate of Occupancy? A Certificate of Occupancy is a formal document evidencing a right of occupancy over land. Under the Land Use Act, the Governor has powers relating to the grant of statutory rights of occupancy, while the holder of a statutory right of occupancy is subject to the conditions applicable to that right. A Certificate of Occupancy can therefore serve as important evidence of the holder’s interest in the property. However, a Certificate of Occupancy should not be treated as an automatic and conclusive guarantee of ownership in every circumstance. The Court has held that a Certificate of Occupancy issued under the Land Use Act is not conclusive evidence of a valid title. It is prima facie evidence of the interest or title stated in it and can be challenged where another person establishes a better title or where the grant itself is defective. See Adole v. Gwar (2008) 11 NWLR (Pt. 1099) 562. This is why a buyer should investigate the root of title even where the seller presents a Certificate of Occupancy. For more information, see “How to Verify a Certificate of Occupancy in Nigeria.” What Is a Deed of Assignment? A Deed of Assignment is a legal instrument by which a person transfers an existing interest in land to another person. The person transferring the interest is the Assignor, while the person receiving the interest is the Assignee. For example, where a person holding an interest in a property sells that interest to a buyer, the transaction can be documented through a Deed of Assignment. The deed normally identifies the parties, describes the property, states the consideration and contains the operative provisions by which the relevant interest is assigned. For a detailed explanation, see “Deed of Assignment in Nigeria: What Buyers Need to Know.” The Main Difference Between a Deed of Assignment and a Certificate of Occupancy The simplest way to understand the difference is this: A Certificate of Occupancy evidences a right of occupancy, while a Deed of Assignment documents the transfer of an existing interest from one person to another. They therefore answer different questions. A Certificate of Occupancy primarily addresses: What right of occupancy has been granted or recognised in respect of the property? A Deed of Assignment addresses: What interest is being transferred from the existing holder to the new holder? The documents can therefore appear together in the same property transaction. Deed of Assignment vs Certificate of Occupancy: Key Differences Issue Deed of Assignment Certificate of Occupancy Primary function Transfers an existing interest Evidences a right of occupancy Typical parties Assignor and Assignee Government and holder/grantee Usually arises from Sale or other transfer Grant or recognition of right of occupancy Identifies transaction between parties Yes Not primarily Shows purchase transaction Yes No Shows right of occupancy Through the interest being assigned Yes Requires investigation of root of title Yes Yes May involve Governor’s Consent Yes, where required It is itself connected to the grant of a statutory right of occupancy Requires registration/perfection Yes, as applicable It is itself a title document Automatically proves indefeasible ownership No No Does a Certificate of Occupancy Replace a Deed of Assignment? No. A Certificate of Occupancy and a Deed of Assignment are not interchangeable documents. Suppose Mr A holds a property evidenced by a Certificate of Occupancy and later sells his interest to Mr B. The Certificate of Occupancy does not itself document the sale from Mr A to Mr B. The transaction transferring Mr A’s interest to Mr B must be properly documented. Depending on the circumstances, this includes a Deed of Assignment and the applicable consent, stamping and registration processes. The buyer should therefore not assume that receiving the seller’s original Certificate of Occupancy means that the buyer has completed the transfer of the property. Does a Deed of Assignment Replace a Certificate of Occupancy? Not necessarily. A Deed of Assignment does not automatically become a Certificate of Occupancy merely because it has been executed. The deed documents the transfer of the Assignor’s interest. The buyer’s title must then be considered in light of the nature of the interest transferred, the root of title, applicable land law and the required perfection process. The documents forming the chain of title can therefore remain important after the transaction. Can You Buy Property With Only a Certificate of Occupancy? A Certificate of Occupancy is an important title document, but the existence of a C of O does not mean that the buyer should dispense with due diligence. The buyer should investigate: The identity of the registered or recognised holder; The root of title; The property’s location and boundaries; Existing mortgages or charges; Pending litigation; Government acquisition; Restrictions affecting the property; Whether the document is genuine; Whether the seller has authority to sell. The Court has repeatedly recognised that a Certificate of Occupancy is not conclusive proof of title where a better title or defect in the grant is established. See “How to Verify Land Title Before Buying Property” before committing to a purchase. Can You Buy Property With Only a Deed of Assignment? A Deed of Assignment should also not be treated in isolation. The buyer must determine what interest the Assignor actually had and whether that interest was capable of
How to Check Whether a Property Is Genuine in Nigeria
Buying property in Nigeria is a major financial decision. Unfortunately, a property can appear genuine on the surface and still be affected by defective title, competing ownership claims, government acquisition, forged documents, undisclosed encumbrances or an unauthorised seller. A seller may show you a Certificate of Occupancy, Deed of Assignment, survey plan or other title document. The existence of a document, however, does not by itself establish that the seller has a valid and transferable interest in the property. The Court has emphasised that merely producing a document of title does not automatically establish ownership of land. The circumstances surrounding the title and the root of the interest being claimed remain important. This is why a buyer should investigate the property, the title, the seller and the transaction before paying the purchase price. What Does It Mean for a Property to Be Genuine? A property is not “genuine” merely because there is a building on it or because the seller possesses a document bearing an official-looking stamp. For a property transaction to be reasonably safe, the buyer should be able to establish that: the property actually exists as described; the person offering it for sale has a legitimate interest in it; the seller has authority to transfer that interest; the title documents are authentic; the documents correspond with the actual property; the property’s ownership history is capable of being established; there is no undisclosed competing claim that prevents the sale; the property is not affected by an undisclosed encumbrance; the property is not being sold by someone without authority; the transaction is not affected by fraud or forgery; and the buyer can properly acquire and perfect the interest being purchased. A proper investigation therefore goes beyond checking one document. How to Check Whether a Property Is Genuine Before Buying 1. Confirm the Identity of the Seller The first question should be: Who exactly is selling this property? Ask the seller to provide satisfactory identification and documents establishing their interest in the property. Where the seller claims to be the owner, compare their identity with the name appearing on the title documents. Where the seller’s name differs from the registered proprietor, do not assume that the difference is harmless. The seller should explain and establish the legal basis for the sale. For example, the seller could be: a subsequent purchaser; an administrator or executor of an estate; an attorney acting under a Power of Attorney; a company authorised to dispose of the property; a representative of a family or community; or another person deriving an interest from the registered owner. Each situation requires its own investigation. Why Seller Verification Matters One of the common forms of property fraud is a person presenting himself as the owner when he has no authority to sell the property. Even where the property exists and the documents look authentic, the transaction can still be unsafe if the person receiving your money is not legally entitled to sell. 2. Ask for the Complete Title Documents Do not rely on a single document supplied by the seller. Ask for the documents upon which the seller’s ownership or interest is based. Depending on the property, these may include: Certificate of Occupancy; Deed of Assignment; Deed of Lease; Governor’s Consent; registered survey plan; Gazette; allocation letter; previous title documents; purchase receipts; probate or letters of administration; court judgments or orders; and other documents forming part of the chain of title. The precise documents required will depend on the history and nature of the property. The important point is to understand how the seller acquired the property, not merely what document the seller currently possesses. 3. Verify the Title Documents Documents presented by a seller should be independently verified. Do not assume that a document is genuine simply because: it carries a government logo; it has a registration number; it contains official-looking stamps; the seller’s lawyer produced it; the seller says it was issued by the government; or another buyer previously relied on it. The relevant government records should be investigated where applicable. For example, Lagos State provides property-related services through its e-GIS platform, including property search and applications for Certified True Copies. Where a document is alleged to be registered, the buyer should investigate the relevant registry records and compare the information in those records with the document presented. 4. Conduct a Search at the Relevant Land Registry A property search is one of the most important stages of property due diligence. The purpose is to investigate the official records relating to the property and determine matters such as: the registered proprietor; the nature of the registered interest; previous transactions; registered encumbrances; mortgages or charges; assignments; restrictions; and other interests affecting the property. In Lagos, the relevant land records are maintained through the State’s land administration system, with online property-search services available through the Lagos e-GIS platform. However, a registry search should not be treated as the entire due-diligence exercise. A search result must be properly interpreted and compared with the seller’s documents and the physical property. 5. Trace the Root and Chain of Title One of the most important questions in a property transaction is: How did the seller acquire the property? If the seller acquired the property from another person, your lawyer should investigate that previous transaction. If the previous owner acquired it from another person, the investigation may need to go further. This is known as investigating the root and chain of title. The objective is to determine whether the seller’s interest can properly be traced to a person or entity with a legitimate interest capable of being transferred. A buyer should not assume that a recent Deed of Assignment automatically cures problems in an earlier title. The Court of Appeal has recognised that registration does not create an interest in land where no valid interest existed in the first place. This is an important principle when investigating property transactions. 6. Confirm That the Property Described in the Documents Is the Actual Property The documents