What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
A combination of land charges, such as ground rents, tenement rates, Neighbourhood Improvement Charges, Business Premises permits apply to properties at different rates across Nigeria. The responsibility for these payments is on the owner and occupier of the premises and ought to be paid to Government before a transfer of the interests to the purchaser otherwise, it becomes the responsibility of the purchaser or assignee to make the payment on any outstanding charges after transfer.
The Land Use Act provides that the Governor of a State where a property is located shall give consent for a transfer of the interests in the property to be valid. The transactions in which Governor’s consent is needed include sale of land, mortgage, leaseetc. Payment of a consent fee may be made conditional on the granting of the consent or made antecedent of the grant. The rate chargeable as consent fee depends on the scale adopted in a particular state but is mostly between 3–5% of the consideration paid on the property transaction. Failure to pay consent fee will make the alienation of interest voidable.
The Registration Fee is required to be paid under the various land instrument registration laws of the States before documents are registered. The property sought to be registered may be valued or revaluated by the director of lands or other valuers to determine the amount payable, and not necessarily the amount stated by the parties in the document sought to be registered.
The purchaser is responsible for ensuring that all required costs and taxes for consent and registration of the transferred interests are paid.
The fees for the Solicitors and other professional consultants including estate surveyors and agents also arise in transfer of property transactions.
The purchaser is usually responsible for the payment of the transaction costs and the taxes except where expressly agreed by the parties that the costs and taxes are to be shared by the parties.