Have you ever come across the term “Freehold” or “Freehold property title” when discussing estate with real estate agents or real estate companies? Recently I found myself clarifying the concept of title to a few potential buyers. It struck me that many individuals perceive a Certificate of Occupancy (CofO) as the most authentic ownership document. While it is indeed true that a CofO holds importance as the form of title document for a property it does not negate the validity or authenticity of other types of title deeds.
In this piece, I will explain what constitutes a Freehold title and why investing in land with ownership status could be advantageous. A Freehold land title signifies that the landowner has ownership rights over the land without any government claims or restrictions. This form of ownership is perpetually making it highly sought after among buyers.
Freehold properties are particularly favored in areas like Epe in Lagos State, where there are no government plans to take over the land. Buyers must undergo a registered survey process and eventually secure a title deed such as a CofO post-purchase, to ensure recognition of their ownership rights.
Knowing types of land titles can empower you to make informed decisions when venturing into real estate investments.
Let’s dig in and explore more about Freehold titles and what advantages they offer.
What Does Freehold Property Title Mean?
A Freehold land title signifies a form of land ownership where the owner possesses control over the land and any structures on it. This implies that the owner can utilize the land for any purpose and has the freedom to sell, lease, or transfer it to their descendants without requiring approval.
Perpetual Ownership of Land in Nigeria
Perpetual ownership of land indicates that ownership endures indefinitely. With a Freehold title, there is no restriction on how you can possess the land. You have ownership and your rights are not contingent upon any terms or expiration dates. This sets it apart from types of land titles where ownership might be limited to a duration or subject to renewal.
Differences Between Freehold and Other Types of Land Titles
The primary contrast between Freehold titles and other forms of land ownership lies in the degree of control and duration of possession. For instance:
Leasehold Title: Under this title, you hold the right to utilize the land for a designated period, of 99 years following which ownership reverts, to the landlord or government.
Having Freehold land ownership means you have everlasting ownership of the land without any time constraints or government restrictions making it a secure and valuable form of land ownership.
Comparisons Between Freehold and Certificate of Occupancy (CofO)
Certificate of Occupancy (CofO) is a document, in Nigeria that confirms the government’s approval for using a piece of land for a period usually 99 years. It plays a role in it:
- Legally acknowledges land ownership
- Guards against conflicts or claims
- Enhances the property’s worth and marketability
While both Freehold and CofO are important in land ownership, they differ in several key ways:
Freehold: Gives you ownership, for a time without any restrictions.
CofO: Offers a lease for around 99 years. Can be renewed after that period.
Government Roles:
Freehold: Indicates no government interference in giving control to the owner.
CofO: Involves government approval and oversight.
Easy Property Title Transfer Process:
Freehold: Easier to sell or transfer without time constraints.
CofO: Requires government approval and adherence to lease terms.
Property Value Growth:
Freehold: Has potential for value appreciation due to ownership.
CofO: Appreciates but may be affected by the lease period.
Land Use Flexibility:
Freehold: Offers flexibility in land use within regulations.
CofO: May have government-imposed restrictions, on land use.
How Valid and Legitimate are Both Titles?
Both Freehold and Certificate of Occupancy (CofO) represent legitimate forms of land ownership, in Nigeria.
Freehold: While it may be less formal compared to a CofO, freehold ownership is acknowledged and accepted in regions where the government has no intentions of acquiring the land. Property owners should ensure they possess documentation, such as a registered survey and a Deed of Assignment to confirm their ownership rights.
CofO: Issued by the government, a Certificate of Occupancy carries legal weight and offers robust legal protection. It is often viewed as the best form of land title due to its governmental endorsement and the rigorous process involved in its acquisition.
In summary, both Freehold and CofO titles come with their advantages and considerations. Understanding these distinctions enables buyers to make informed decisions while effectively securing their land ownership rights.
What are the Benefits of Freehold Property Title?
1. Freedom from government acquisition or encumbrances:
Freehold land titles are exempt from government takeover or any restrictions. This ensures that the land remains unaffected by any plans or interests making it a reliable long-term investment opportunity.
2. No time limit on freehold land ownership:
With a Freehold title, there is no restriction on how long one can own the property.
The land ownership is permanent, allowing you to pass it down to generations without the hassle of renewing leases or losing control.
3. Ease of transfer:
Freehold land can be easily transferred to owners, making it an attractive choice, for investors and individuals in the property market.
4. Access to bank loans:
With Freehold land providing an ownership structure, it can be used as collateral for obtaining bank loans. This offers benefits for landowners, opening up more avenues for investment and growth.
Why is Freehold Land Title Popular in Epe, Lagos State?
Epe, a growing area in Lagos State, has become a location for real estate investments. The prevalence of Freehold land is a draw for buyers due to the area’s development stage compared to other parts of Lagos. This abundance of land not yet earmarked by the government attracts investors.
Government Disinterest in Some Land in Epe
Governments typically acquire land for use in infrastructure projects or future development initiatives.
In Epe, many plots of land are not closely monitored by the government due to the area being less crowded and less developed than the city center. Consequently, these lands are designated as Freehold, indicating that the government has no plans or interest in them making them options for private buyers.
Advantages of Investing in Freehold Land in Epe
There are benefits to purchasing Freehold land in Epe, here are a few:
1. Ownership Security: Freehold land grants you ownership, ensuring that you own the land indefinitely without concerns about government repossession.
2. Value Appreciation: With the rate of development in Epe, the value of Freehold land is likely to increase, offering returns on investment over time.
3. Ease of Sale and Ownership Transfer: Compared to other types of land titles, freehold properties are typically easier to sell and transfer ownership, making them liquid assets.
4. Eligibility for Bank Loans: Due to its indefinite ownership structure, freehold land is often accepted as collateral for bank loans, enabling individuals to leverage their resources for further investments.
5. Future Prospects: With the rate of infrastructural development in Epe, having ownership of freehold land opens up opportunities to benefit from the area’s growth potential whether it be for commercial or industrial use.
The abundance of Freehold land in Epe along with the government’s non-involvement in these properties presents a choice for investors looking for secure and lucrative real estate prospects.
Read: 8 Benefits of Investing in Epe
Guidelines for Validating a Freehold Land Purchase
1. Process a Certified Survey
Securing a certified survey is crucial when acquiring freehold land. It offers measurements and descriptions of the property, ensuring clarity on your purchase. This step aids in preventing conflicts. It also plays a vital role in obtaining legal documentation for your land.
Steps to Acquiring a Certificate of Occupancy (CofO) Post-Purchase
1. Conduct a Title Search: Before finalizing your purchase, conduct a title search to confirm there are no existing issues or disputes related to the land.
2. Secure a Registered Survey: Engage the services of a surveyor to create a survey plan for the property. Ensure that this survey is duly registered with the land and title registry.
3. Apply for a Deed of Assignment: This legal document facilitates the transfer of ownership, from the seller to yourself. It must be properly stamped and registered at the designated land registry.
To obtain a Certificate of Occupancy (CofO) you need to follow these steps:
1. Submit an application to the state government including filling out forms and providing documents like your survey plan and deed of assignment.
2. Pay the fees for the CofO application such as survey fees, charting fees, and other administrative costs.
3. The government will inspect the land to verify its status and the information in your application.
4. Upon inspection and approval of your application, the government will issue you a CofO, formally recognizing your ownership rights.
When applying for a CofO, ensure you have the following procedures and documentation in order:
1. Title Search Report: This verifies that the land is free from any disputes or government claims.
2. Registered Survey Plan: This shows detailed measurements and descriptions of the land.
3. Deed of Assignment: This legal document transfers property ownership from the seller to you.
4. Application Forms: Obtain these forms from the land registry for your CofO application process.
5. Payment Receipts: This shows evidence of payment for all payable fees.
6. Government Inspection Report: This validates the information provided in your application and survey plan.
7. Certificate of Occupancy: This is the document that acknowledges you as the owner of the property.
Factors to Think About When Purchasing Freehold Land
Higher Cost in Comparison to Leasehold Land
Freehold land typically comes at a higher price than land. This is because you own the land outright and indefinitely, without the need for renewal after a period. The increased cost reflects the enduring value and advantages that accompany ownership. When considering buying land, it’s essential to plan your budget and be ready for this huge initial investment.
Initial Down Payment
When purchasing land, providing a down payment or an advance payment is often vital. This initial payment demonstrates your commitment to the seller, which indicates your seriousness about acquiring the property. It can also help you secure the plot quickly, thereby preventing potential buyers from intervening. Ensure you have your finances in order, to facilitate this payment and secure your desired piece of land as you are typically required to finalize payment within a timeframe.
Considerations and Safety Measures When Acquiring Freehold Property
Although investing in property comes with numerous advantages, there are risks to be aware of. It’s crucial to conduct research before committing to a purchase. Here are some steps to consider:
- Validate the Property Title: Ensure that the freehold title is valid and that the seller has the authority to transfer ownership. You can verify this information at the land registry. Seek assistance from a professional to authenticate the title.
- Check for Encumbrances: Confirm that there are no unresolved legal issues, outstanding debts, or competing claims on the property. This step can prevent entanglements in the future.
- Conduct a Land Survey: Have a qualified surveyor inspect the property boundaries and identify any concerns that could impact its usability. A professional survey will provide insights into the land’s condition.
- Seek Expert Advice: Get a real estate agent, lawyer, and surveyor to navigate you through the transaction process and safeguard your investment. This proactive approach can shield you from property scams in the real estate market.
In conclusion, freehold land title is legitimate in Nigeria, and about the best land title you can have. However, land with a freehold title tends to be more expensive when compared to other titles because having a property with freehold means that you own the property for as long as you want, unlike other titles that could only allow you to own the land for 99 years.
There are numerous benefits to owning a piece of property with a freehold title. There are also potential risks. Make sure to consult with your agent, lawyer, and surveyor.
Also read: 15 property titles in Nigeria you must know
Want to buy a property in Epe with freehold title? Get in touch with us today.