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Certificate of Occupancy — All You Need To Know

Posted on 02/07/2020 10:54 AM | by NaijaHouses

A Certificate of Occupancy (C of O) is a fundamental land title document in Nigeria — along with other documents like the survey plan and the deed of assignment. Getting a C of O is one of the steps you need to take when purchasing land or property in Nigeria. As a government-issued document, the Certificate of Occupancy proves ownership of land. This article will expand on this in detail.

What is a Certificate of Occupancy?

A Certificate of Occupancy is a land title document that is issued by the government to landowners, as legal proof of land ownership in Nigeria. A plot of land or property without a C of O can be confiscated at any time without any compensation paid.

The Land Use Act 1978 — standardized land administration in Nigeria by vesting all urban land within a state, in the state governor (rural land is administrated by the local governments in which they are found). The land use act gave state governors the power to grant “statutory rights of occupancy” as they deemed appropriate. Also, this act introduced the concept of land use (residential, commercial, mixed-use etc.).

With this act came the abolishment of all existing freehold systems, in favour of a leasehold system. These leases are usually granted for a maximum period of 99 years – after which one must apply for renewal.

Common things found on a C of O include:

  • Certificate of Occupancy no.
  • File no.
  • Plot no.
  • Location (district details and cadastral zone)
  • Plot size
  • Survey plan or graphic (plot shape)
  • Date of issue
  • Lease term
  • Initial annual ground rent fees
  • Land use purpose
  • Terms and conditions

Difference between Right of Occupancy and Certificate of Occupancy

Right of Occupancy (R of O) is simply an offer to a said plot of land, while a Certificate of Occupancy (C of O) is the official or certified right of ownership over that parcel of land.

The R of O is a weaker title when compared to the C of O — as with the former the title can be revoked without compensation. Accordingly, the C of O is the superior title, with compensation paid for any compulsory government acquisitions. This is also why lands with C of O have a higher market value than those without.

For such reasons, Right of Occupancy holders must perfect the title on their land — to Certificate of Occupancy as soon as possible.

When do you need a Certificate of Occupancy?

There are several reasons for needing a Certificate of Occupancy including:

Property development

To get building approval for new construction projects, a Certificate of Occupancy is one of the title documents needed.

Converting a property

When you want to change the use of a property, a C of O is usually required. For example, a commercial warehouse being converted to residential units.

A change in ownership

Regardless of the type of property — as long as there is a change of ownership, a new certificate of occupancy may sometimes be required.

Having said this, some cities such as Abuja do not readily give out new certificates. As an alternative, raising and registering something like a power of attorney — in favour of the new land or property buyer also serves the same purpose.

Where to get a Certificate of Occupancy?

You can get a Certificate of Occupancy through the appropriate state government — specifically the department in charge of land matters. In Abuja, this department is known as Abuja Geographic Information Systems (AGIS).

How do you obtain a Certificate of Occupancy?

Along with managing existing Certificates of Occupancy, land administration departments also deal with fresh government land applications — ultimately leading to the issuance of new Certificates of Occupancy. Government land applications involve several administrative fees that need to be paid, before being issued a C of O.

The other way to obtain a Certificate of Occupancy is purchasing genuine property/land from someone who has such (on the secondary market). You can then proceed to change the ownership title at the land registry.

How much does it cost to get a C of O?

The cost of getting a C of O varies from state to state — generally, the cost is related to actual Fair Market Value (FMV) of the land in question. Accordingly, getting a Certificate of Occupancy in Lagos or Abuja is relatively more expensive — as compared to other states.

In Abuja, the Certificate of Occupancy fee is calculated per square meter of land and this fee is dependent on what phase of the city the plot is sited in i.e. phase 1, 2, 3 etc.

Benefits of having a Certificate of Occupancy

  • Identifies you as the specific owner of a plot of land — preventing situations where multiple people claim ownership to the same property
  • Prevents the government from repossessing or revoking your rights to land without compensation
  • Certificates of Occupancy are accepted as collateral for loans from financial institutions such as banks (mortgage, retail and commercial.)
  • Increases the value of your land, particularly in Abuja, where the process for obtaining a C of O can be both long and expensive

Other important title documents besides a Certificate of Occupancy

Although an important title document — the Certificate of Occupancy is not the only land document you should be aware of. A Certificate of Occupancy only signifies ownership of land. To legitimize property transactions — other documents such as the deeds of assignment/conveyance, deed of transfer, deed of gift, vesting orders and assents need to be looked into. This is particularly true for built or developed properties — that may have changed ownership multiple times.

In essence, don’t just look at the C of O, but also pay attention to the ownership of the property and how the vendor came by the property. Hiring an experienced lawyer is recommended before proceeding with any land or property transactions.

Final thoughts

For any building structure be it a bungalow, mansion, office, hospital or skyscraper etc. the Certificate of Occupancy — is what proves that you legally have an interest on the land upon which a property stands on.

Despite this, there are other title documents that you should verify (where appropriate) such as the deed of assignment — when undertaking land or property transactions in Nigeria.

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