CHALLENGES OF TITLE DOCUMENTATION IN RESIDENTIAL REAL ESTATE INVESTMENT IN LAGOS

Abstract

The main objective of this study is to ascertain the challenges of title documentation in residential real estate investment in Lagos state, the researcher intends to achieve the following sub objectives; to ascertain the challenges of title documentation in real estate investment; to investigate the impact of documentation in the development and availability of affordable residential housing; to investigate the role of the government in easing the challenges of documentation; to investigate the effect of government policy in the development of the sector. In lieu of this adequate research hypotheses were formulated by the researcher, and the instrument of data collection was the questionnaire which was adequately structured for easy understanding. The statistical tool used in analyzing the data collected is the simple percentage and the chi square statistical tool.

 

 

 

 

 

 

CHAPTER ONE

INTRODUCTION

• Background of the study

The ease with which title to real properties is perfected enhances the property rights enjoyed by private persons as well as corporates in any country. Land acquisition and security of title and interest in land (as guaranteed by perfection of title), is fundamental to the harnessing of investments, expansion of businesses and the growth of economies. In recognition of the importance of security of interest and title to land to foreign direct investments, the World Bank, last year, included “registering property” as one of the new indices used in its annual Doing Business report. Hitherto, these indices were limited to: starting a business; dealing with construction permits;  getting credit;  protecting minority investors;  paying taxes;  getting electricity; trading across borders; enforcing contracts; and resolving insolvency. In the 2016 Doing Business Report, published by the World Bank and tagged “Measuring Regulatory Quality and Efficiency”; Nigeria is ranked 185th out of 189 countries rated globally with respect to the “Ease of Registering Properties”. Although Nigeria ranks 169th in the overall Ease of Doing Business Index, it is clearly a disincentive, to prospective investors interested in land acquisition deals (and/or investors who are willing to provide debt capital) when faced with the seemingly daunting regulatory issues as well as the high cost of registration connected with registering title to property or creating security over landed property; more so in the light of the World Bank ranking.

Real Estate is the expression most widely used in the USA and in the English Language generally to describe a form of ownership in land. Both words ‘real’ and ‘estate’ have their origins in English law developed in the Middle Ages. English law has no room for outright individual ownership. This was a privilege reserve to the crown (originally to William the conqueror, who acquires title to the nation in 1066 by Conquest- So often the method of acquisition in human history). The conquest was an instance for centralization, of control over lands that was by no means unique. Nor is it antiquated. The most populous country in the world, the people’s republic of China is just one present- day example of a state in which outright ownership of urban land by individual Or corporation is not recognize. State ownership of urban land was made constitutional in 1982 as part of a process of economic reform, although private ownership had virtually ceased in 1953. Real estate is not therefore ownership, in the sense that goods and personal effects, money, shares and other things (known as personal property in English law) are owned. Land is inherently different from all other classes of property in that it is given not made, fixed, and Immovable. On the other hand, real property is a term which distinguishes land from personal property; it is land and- all that is permanently attached to it. English law it includes trees and natural growing things attached, everything under and above it, and improvements in the forms buildings and other construction. Land -registration generally describes systems by which matters concerning ownership, possession or other rights in land can be recorded (usually with a government agency or department) to provide evidence of title, facilitate transactions and to prevent unlawful disposal. The information recorded and the protection will vary by jurisdiction. The Lagos real estate market continues to benefit from the gains derived from a stable and progressive state government committed to improving the state infrastructure, rule of law, governance and security. Lagos continues to remain an attractive destination for real estate investment in Nigeria and Africa based both on land and property appreciation and also in terms of achievable rental returns. Real Estate investment continues to flow into the retail, residential and office sectors with ongoing development in up-market residential estates, development of modern shopping malls and numerous new office developments in the pipeline. Lagos and Abuja have been listed among the top four cities in Africa with the highest cost of living, according to an index released by the Economist Intelligence Unit. The survey places Abuja as the second most expensive city in Africa second only to Luanda, Angola while Lagos comes fourth. The survey backs a recent report by Knight Frank which identifies Luanda as having the most expensive commercial office space in Africa beating Lagos to second place.

• STATEMENT OF THE PROBLEM

Real Estate is the expression most widely used in the USA and in the English Language generally to describe a form of ownership in land. Both words ‘real’ and ‘estate’ have their origins in English law developed in the Middle Ages. English law has no room for outright individual ownership. This was a privilege reserve to the crown (originally to William the conqueror, who acquires title to the nation in 1066 by Conquest- So often the method of acquisition in human history). The conquest was an instance for centralization, of control over lands that was by no means unique.

Lagos Real Estate Market, arguably one of the most vibrant real estate markets in Africa with huge opportunities for investment and development. With the aim of providing investment professionals, developers, professional service providers and other stakeholders with an interest in the Nigerian real estate space an overview of activity in the market. Amidst the fact that Lagos real estate market is one of the most vibrant in Africa, there are enormous challenges facing the industry. It is on this note that the researcher intends to investigate the challenges of title documentation in residential real estate investment in Lagos state.

• OBJECTIVE OF THE STUDY

The main objective of this study is to ascertain the challenges of title documentation in residential real estate investment in Lagos; but for the purpose of the study, the researcher intends to achieve the following objectives;

1. to ascertain the challenges of title documentation in real estate investment;
2. to investigate the impact of documentation in the development and availability of affordable residential housing;

• to investigate the role of the government in easing the challenges of documentation;

1. to investigate the effect of government policy in the development of the sector.
   • RESEARCH HYPOTHESES

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H₀: there are no significant challenges of title documentation in real estate investment in Lagos state.

H₁: there are significant challenges in title documentation in real estate investment in Lagos state

H₀²: title documentation does not have any impact on the development, affordability and availability of residential estate in Lagos state.

H₂: title documentation does have a significant impact on the development, affordability and availability of residential estate in Lagos state.

 

• SIGNIFICANCE OF THE STUDY

It is believed that at the completion of the study, the findings will be of great importance to investor in real estate sector as the study will guide them on the choice of investment location and the documentation requirement and processes. The study will also be of great importance to potential investors in the real estate sector who may not have adequate information regarding the needs and importance of documentation of the asset they intend to acquire. The study will also be beneficial to researchers who intend to embark on study in similar topic as the study will serve as a guide to their study. Finally the study will be beneficial to academia’s students and the general public.

• SCOPE AND LIMITATION OF THE STUDY

The scope of the study covers the challenges of title documentation in residential real estate investment in Lagos state. But in the cause of the study, the researcher encounters some constrain which limited the scope of the study;

(a)Availability of research material: The research material available to the researcher is insufficient, thereby limiting the study.

(b)Time: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

(c)Finance: The finance available for the research work does not allow for wider coverage as resources are very limited as the researcher has other academic bills to cover.

1.7 DEFINITION TERMS

Documentation

Documentation is a set of documents provided on paper, or online, or on digital or analog media, such as audio tape or CDs. Examples are user guides, white papers, on-line help, quick-reference guides. It is becoming less common to see paper (hard-copy) documentation. Documentation is distributed via websites, software products, and other on-line applications.

Real estate

Real estate is “property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more generally) buildings or housing in general. Also: the business of real estate; the profession of buying, selling, or renting land, buildings or housing

Investment

An investment is an asset or item that is purchased with the hope that it will generate income or will appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth.

1.8 Organization of the study

This research work is organized in five chapters, for easy understanding, as follows Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study. Chapter two highlight the theoretical framework on which the study its based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion and also recommendations made of the study.

 

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