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Certificate Of Occupancy Is It An Indefeasible Proof Of Title?

Since the advent of the Land Use Act in 1978, Certificate of Occupancy has become the thrust and the main title document that most land owners in Nigeria hold or seek to hold. Prior to the enactment of the Land Use Act, title documents like Land Certificate, Purchase Receipt and Registered Conveyance were   in use. While all these conferred on its holders freehold interest in the landed properties in question, Certificate of Occupancy only confers leasehold of a specific term on its holder. Thus while holders of a Registered Conveyance, for example, own the land absolutely, holder of a Certificate of Occupancy only holds the land for a period of time (99 years in this case)

Many a writer had advocated the point that holders of Registered Conveyances have a superior title over a piece of land than someone with a Certificate of Occupancy but that is not an argument within the scope of this article.

In fact, the drift since the passage of the Land Use Act is that holder of Registered Conveyance applies for a Certificate of Occupancy and where this happens, it means in principle that he has converted his freehold interest into leasehold interest, even though the law does not mandate a holder of Registered Conveyance to apply for Certificate of Occupancy.

However, Certificate of Occupancy has become the most popular piece of evidence of title. Reason for its prominence is not far-fetched. It is statutorily provided for as evidence of title, since the Land Use Act now vests all land in a given state in Nigeria in the governor of such state. It then follows that whoever lays claim to any land must do so with the consent of its owner – the governor. For this reason financial institutions which still regard landed property as the most reliable form of collateral for its facilities, do have preference for Certificate of Occupancy over other land documents.

 

“The settled law in grant of C of O is that once a person is granted a C of O over a parcel of land, he is entitled to hold that parcel of land to the exclusion of any other person unless the C of O is for good reasons, revoked by the same authority that granted it…

 

IS IT AN INDEFEASIBLE PROOF OF TITLE?

Sequel to this growing importance of the Certificate of Occupancy as mentioned in the preceding paragraphs, the question now begging for answer is whether a holder of a Certificate of Occupancy has an indefeasible proof of title against an adverse claimant?

In this regard, it is important to mention that section 9(1) & (2) of the Land Use Act provides as follows:

“It shall be lawful for the Governor;

 

(a) When granting a statutory right of occupancy to any person;

 

(b) When any person is in occupation of land under a customary right of occupancy and applies in the prescribed manner; or

 

(c) When any person is entitled to a statutory right of occupancy, to issue a certificate under his hand in evidence of such right of occupancy. Such certificate shall be termed a certificate of occupancy and there shall be paid thereof, by the person in whose name it is used, such fee (if any) as may be prescribed”

 

Thus the law recognizes the right of persons in occupation of a given piece of land whether they have applied for Certificate of Occupancy or not. It is not then unusual to hear of cases of a customary occupier of a piece of land challenging a holder of Certificate of Occupancy over the same property.

Of more interest is the scenario where there are two adverse claimants each armed with a C of O over the same landed property. Can this mean the two C of O are valid and indefeasible against the same piece of land?

 

It is thus trite that where a C of O is irregularly issued to a holder, the court has the power to declare the C of O a nullity and same can be set aside.

Consequently, any person without title to a parcel of land in respect of which a Certificate of Occupancy was issued acquires no right or interest, which he did not have before because “ex Nihilo Nihil Fit” that is, we cannot build something on nothing.

LAND BANKING IS THE BEST GUARANTEE!

CONCLUSION

 

It is thus safe to conclude that a prospective land buyer, mortgagee and financial institutions should go beyond mere sighting of the C of O and embarks on a comprehensive due diligence to deduce pre-Land Use Act title, which will prove the veracity or otherwise of the issued C of O

UNDERSTANDING DOCUMENTS IN REAL ESTATE

In this present time, where land are appreciably expensive, it would be unwise for any proposed purchaser to proceed into any land transaction, without consulting a real property Law Firm with founded expertise to provide him with adequate pre-transaction, transaction and post-transaction advisory services.

For the benefit of emphasis, we reiterate that a C of O may be a good title, where there exists a valid right of occupancy by the holder before the advent of the Land Use Act. However, where a C of O is issued to a holder without due regard to the rights and interest of an occupier or holder of a right of occupancy, such a C of O evidences nothing and does not confer any right or interests in the affected land.

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