Registering Properties In Nigeria: A Case For Streamlining The Process

Leasehold Interest in Land and the Right of Occupancy

Generally, in Nigeria, the Land Use Act (Cap. L5, Laws of the Federation of Nigeria 2004) (“the LUA”) governs the ownership and use of, as well as the general administration of land, in Nigeria.

Whilst Section 1 of the LUA vests all land within the urban territory of each State (with the exception of land vested in the Federal Government or any Agency of the Federal Government) solely in the Governor of the relevant State, Section 2 of the LUA vests land within the rural territory of a State in the Local Governments. For clarity, the vesting of the land in the Governor of a State does not in any way confer actual ownership of the land on the Governor.

Specifically, the responsibility of the Governor in this regard is to hold land in trust for the common use and benefit of all Nigerians and to this end, administer same for their benefit. Such administration of land are, in the main limited to the allocation of these plots of land to individuals and organisations for residential, agricultural, commercial and other purposes as well as collecting rents in relation thereto.

With the enactment of the LUA, individuals or companies are entitled to only leasehold interests (as Freeholds were abolished by the LUA coming into force), and these leasehold interests are embodied by “Rights of Occupancy”, which may be customary rights of occupancy or statutory rights of occupancy. Individual rights to land are indeed preserved in the nature of rights of occupancy.

The interest created by a right of occupancy is devoid of absolute ownership or radical title. The Supreme Court of Nigeria, in 1991, in the case of Osho Vs. Foreign Finance Corporation, described the nature of the interest created by a right of occupancy in the following terms: “The interest of a lessee in land is not exactly the same as that of a holder of a right of occupancy. A holder of a right of occupancy enjoys a larger interest than a holder of lease although the two interests enjoy a common denominator which is a term of years”. A right of occupancy under the Act can therefore be said to be a right to use and occupy land subject to conditions and restrictions prescribed by law.

The Governor of a State is empowered to grant statutory rights of occupancy to any person in respect of land, whether or not in an urban area and these rights are evidenced by the issuance of certificates of occupancy (“C of O”). The LUA also empowers Local Governments to grant customary rights of occupancy over land in non-urban areas only.

Notably, persons who were vested with title to land before the commencement of the LUA are regarded under sections 34 – 36 as ‘deemed grantees’ of Rights of Occupancy with respect to the relevant land and were therefore, entitled to be issued the “C of O” upon application to the relevant government ministry or agency. Any subsequent transactions in respect of the land (which is the subject of the Right of Occupancy), must be with the consent of the Governor of the State where the land is situate.