Buying property in Nigeria could be a huge headache and risk as a little missteps can lead to loss of investment or one’s life savings. It is an intricate exercise which property lawyers and advisors say should be approached with utmost caution.
This is why the advisors offer guides on how not to buy property, especially when one is buying from companies or corporate sellers. This is because, according to them, one could be dealing with the rightful seller of a property, but a simple deviation from laid-down terms and procedures could still nullify one’s so-purchases.
Writing on his X (formerly Twitter) handle recently, Akinyemi Ayinoluwa, partner at Hightower Solicitors & Advocates, disclosed that a significant number of property disputes, especially in Lagos courts, involve companies, saying that a visit to a court to observe proceedings will confirm this.
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He cited an instance of a purported purchase of all property where, despite making payment into an account held by the seller, the purchase was declared invalid and the court ruled in favour of someone else. The reason for this, he explained, was because the buyer failed to follow the seller’s clearly stated process.
“What happened in the case was both an eye-opener and a reminder that every transaction, real estate or otherwise, is still governed by the foundational principles of contract law,” Ayinoluwa said.
In that case, he explained, Mr A, the liquidator of a company, placed a newspaper advert inviting bids from staff members to purchase certain units of the company’s property, adding that the liquidator also set out clear steps to be followed by anyone interested in purchasing.
“Mr. B, a current occupant of one of the units, showed interest. He paid the non-refundable form fee and even sent funds, through an agent, to an account of the company. But Mr. B didn’t fully comply with the terms. He failed to submit a proper bid. Worse still, the agent paid into another account of the company, not the one designated by Mr. A for this transaction,” he explained.
Ayinoluwa added that, several months later, Mr C entered the picture and followed the process to the letter – obtained and submitted the necessary forms, paid all fees to the designated account, received an official offer letter with specific property details, and finalised the deal with an executed Deed of Assignment.
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Mr. B, however, refused to vacate the property, claiming he had bought it earlier and was the rightful owner. But Mr. C took the matter to court, suing both Mr. A and Mr. B, seeking a declaration that he was the rightful owner based on a valid transaction.
Mr. C’s counsel argued that a valid contract was formed. The liquidator made an offer. Mr C accepted. Consideration was paid into the correct account. A deed was executed.
Mr. B’s counsel argued that B paid earlier and had an offer letter, but no deed was executed. He claimed an equitable interest because he had been in possession and the property was visible to C at the time of C’s purchase.
A major twist came when Mr. A testified, and it was undisputed that Mr. B paid into the wrong account. Not only that, Mr. B did not comply with the formal procedures outlined by Mr. A. As such, no valid consideration was furnished.
As for the ‘offer letter,’ which Mr. B relied on, Ayinoluwa said the letter didn’t bear his name, nor did it refer to any specific property. “At best, what existed between A and B was merely an invitation to treat, not a valid offer. No offer, no acceptance and no consideration. These equal to no contract,” he explained.
