Spike in charges, manual processes slow property registration in states

• 70% of states plagued by manual documentation processes
Uncertainties have continued to plague land registration processes in states due to delays, high costs of documentation, official corruption, long duration and administrative hiccups.

The development complicates processes and hinders local, and foreign direct investment and the potential of the real estate sector to create jobs, as well as engender economic development. It is also increasing fraud risks, limiting the transfer of property, and access to finance, and under-developing the market.

The Guardian gathered that despite cost reductions by some state governments, many still could not afford to register their property; while lack of registration has led to uncertainty in transactions, loss of income, and litigation.

According to PwC, about 60 per cent of Nigeria’s land mass measuring 923,000 square kilometres are without formal titles. Untitled lands are regarded as dead assets, neither tradeable nor bankable, and owners of property cannot use their property to get loans from the banks.

Findings revealed that in most states it takes a time frame of 12 months – two years to perfect titles to property, which requires numerous documents and fees. The least time frame is between three to six months.

Essentially, property registration at both the federal and state levels has been sluggish, the Federal Government approved 7,985 titles as of October 25, 2018, and issued 1,300 certificates to verified buyers of federal government land.

At least seven out of every 10 land remains unregistered in the country, as property owners and investors avoid existing difficult processes and long duration. Nigeria Living Standards Survey (NLSS) report shows that 71.4 per cent of landlords sampled across the 36 states and the Federal Capital Territory (FCT) are without titles.

The report further shows that while 13.2 per cent of the country’s property owners have title deeds, only 8.1 per cent have a Certificate of Occupancy (C-of-O) issued by both federal and state governments.

In the Southwest, the estimated time for completion of the process for land registration varies. In Ekiti State, it takes six months, in Lagos three months, in Ogun about three years, in Ondo two-three months, while in Osun, it takes one to three years and in Oyo, three months.

For instance, in Lagos, property investors are required to pass through about 17 different steps to complete the build permit processes. The agencies to get certification include; the State’s Physical Planning Permit Authority (LASPPPA) where developers process development permits; the State Safety Commission (LSSC) certify for safety compliance; the Ministry of Physical Planning and Urban Development (MPPUD) for vetting and approval of building plans.

Others are the State’s Materials Testing Laboratory (LSMTL) to certify that materials are of standard and required quality, and Environmental Protection Agency (LASEPA), to ensure that buildings comply with environmental laws and the Internal Revenue Service (LIRS) for tax clearance and others.

The statutory fees include survey fees, 5 per cent of the fair market value of the property, a stamp duty of 0.05 per cent of the fair market value, a 0.5 per cent registration fee of the fair market value, and also consent fee of 1.5 per cent also of the fair market. One of the fees amounts to about 10 per cent of land value. For instance, if the cost of land is N85m, this means about N8.5m is paid as a fee.

The application fees are determined by the percentage of the assessed value of land or a flat rate of between N5,000 to N50,000, and the registration fee, which is the percentage of assessed value hovers around N20,000 to N30,000. The stamp duty accounts for the percentage of the assessed value of 3-6 per cent, the consent fee is 1.5 per cent to 6 per cent, and developed land is 5 per cent, while undeveloped land is 7.50 per cent.

The capital gains tax, which is the percentage of assessed value, ranges from 10 per cent to 20 per cent. Also, processing fees could be as high as N10,000 to N20,000.

There are also requirements such as an approved building plan, locational sketch, and land information certificate. The cost of C-of-O is N50,000/1,000m², an advert fee of N10,000, land use clearance fee of N2,000 depending on the state.

Findings by The Guardian show that in Lagos, where land registration procedure is digitalised, it takes from three to six months to register a land title and the stages include submission of an application for the governor’s consent at the Lands Bureau of the state, charting the survey plan by the Surveyor-General to confirm if the land is free from government acquisition.

According to the Nigerian real estate market report of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), in the South-South, the estimated time of completion of processing land registration could take forever in Akwa-Ibom State. In Bayelsa, it takes about six months, Cross River, one month and Delta, six months

In Edo State, it takes three months and in Rivers State, about 12 months. Application fee ranges between N20,000 to N30,000, registration fee is between N5,000 to 25,000; stamp duty is 30 per cent of assessed land value, consent fee is 3 per cent to 30 per cent, capital gains tax is between N10,000 to over N20,000.

In the eastern part of the country, the cost of title is also astronomically high due to the cities’ proximity to ports, infrastructure and commercial centres. The estimated time for completion of land registration ranges between one to four years in states like Abia, Enugu and Imo states.

In Anambra and Ebonyi, it can be completed between one month and six months respectively. In this zone, the application fee is based on the percentage of the assessed value of land or flat rate N10,000 to N50,000 and also depends on the type of development purposes of the property.

For the Northwest geopolitical zone, the estimated time for the completion process for land registration in the states is between two weeks to four years. Specifically, in Sokoto, it is two weeks, Kano one to three months, Kaduna three months, Kebbi one to four years, Zamfara three months and Katsina three months.

Experts told The Guardian that addressing challenges associated with obtaining titles is crucial to unlocking the potential of the real estate industry and attracting more investments to the property market.

President of the Association of Town Planning Consultants of Nigeria (ATOPCON), Mr Adebisi Adedire, confirmed that many property owners and investors spend one to three years in obtaining CofO, governor consent, recertification, adding that the time spent is becoming worrisome to investors.

“The process is becoming too cumbersome. In Lagos State, though, the process has been digitised, it has not been possible to apply from the comfort of our homes and so, it is like public deceit. I got the approval in Kano, Jos and Maiduguri within two months for a project, but it took us over a year in Lagos,” he said.

The ATOPCON president observed that the issue of tax constitutes another issue delaying approvals, saying, “This is why there are illegal developments.”

Former Chairman of NIESV Lagos branch, Mr Dotun Bamigbola, said the difficulty in obtaining land title registration in various states is a disincentive to investment in the sector.

He noted attempts in various states to make the land bureaus or state Ministries of Land and Housing focused on making the land title registration process a source of Internally Generated Revenue (IGR).

Bamigbola who doubles as the Chairman of NIESV’s Research and Development Committee, said such service delivery will make land registration easier, adding that the implementation of the Abuja Geographical Information System (AGIS) in Abuja and introduction of the Lagos State land administration portal will boost the land title registration processes.

Past president of the Nigerian Institute of Town Planners (NITP), Mr Nathaniel Atebije, said the bureaucracy in the registration of titles could be cut short if the government invests in equipment, as most of the processes are analogous, physical and manual.

He said title registration is a task that could be done in a matter of minutes or hours. “The challenges to getting titles to property are because of lack of planning. The government has been paying lip service to planning and it is difficult to get a title. If there is no planning, there will be recourse to arbitrariness,” he said.

Atebije said Nigerians are not patient in going through the hurdles of getting titles to their property, and forgetting that the land is an asset, which they will hold for 99 years.

His words: “People want to apply today and get the documents tomorrow but there must be some level of thoroughness in processing to avert contention over a document gotten from the government. To get a good value for land, professionals must be involved.”

Former NIESV Chairman, Faculty of Real Estate Consulting, Mr Niyi Fadoju, traced the issue to transparency and clarity of the process. According to him, the cost of getting titles is high because states are using the process to generate revenue rather than offering support services to citizens and investors in the property sector.

Fadoju further urged the government to de-emphasise the focus on revenue generation in land administration.