In the first part of the series, we talked about Marketing in Real estate and the importance of knowing the right marketing technique to employ for your real estate company for the company and business to do well in the market. Marketing is the sole sustenance of every business, be it small or large business.

However, there is a popular saying that when you are in Rome, you behave like a Roman and when you are in Italy, you behave like an Italian. Having the capital, and marketing knowledge of the real estate sector is not as important as having an idea of the needed laws governing that sector. Not being aware of the laws governing Real estate in your country and venturing into it is like a blind man walking on a busy road with no walking stick or anybody holding his hand, he will surely meet his misfortune. Lord Denning in Benjamin Leonard MacFoy v. United Africa Company Ltd.  3 All ER 1169 at 1172 (1961) said putting something on nothing will surely fail.

This part of Running a Profitable Real Estate Business examines some of the vital laws that are required for most real estate transactions. This part will also discuss the different legal documents needed for a perfect real estate transaction. While discussing the laws, the focus shall mainly be on Nigerian laws because the writer is domiciled in Nigeria. However, readers outside the jurisdiction can pick laws similar to the ones that will be discussed here for their perusal. It should however be noted that knowing these laws is not adequate than engaging the services of someone good in them. You can do that either by retaining the service of a Lawyer or employing a Lawyer to work in your Legal Department.



Signed into law in the year 1978. The law governs the ownership, purchase, administration, management, and management of land in Nigeria’s states and Federal Capital Territory, including land allotment, title registration, etc. Section 1 of the law states that every land is vested upon the Governor and he has the power to grant ownership of any portion of the land to anybody and he also has the liberty to withdraw such grant.

All lands comprised in the territory of each state in the Federation are vested in the Governor of that State and such land shall be held in trust and administered for the use and common benefit of all Nigerian in accordance with the provisions of the Act.

Such land granted to an individual by the Governor is only for 99 years, after which the said land reverts to the Governor.


After determining to go into Real Estate, the next thing an individual needs to consider is the Incorporation of a company or registration of a business name, both of which are guided and provided for under the Companies and Allied Matters Act 2020. This aspect requires the service of an accredited Corporate Affairs Commission Agent. Registration of a business name is good if you have an ideal name you want to use for business and you want to secure the name before deciding to start a company using the name. You can also use it to run a business.

However, the mere registration of a business name has its limitation compared to the incorporation of a company. When you incorporate a company, you have more advantage as most loan, grant organizations, and business angels tend to deal with incorporated companies than business names. The CAMA amongst other things states that a single person can be the sole shareholder of a private company, so you do not have to bring too many hands into the leadership of your organization.


It should however be noted here that presently in Nigeria, there are different mortgage laws governing the administration of mortgages in the different parts of the country. There are two types of mortgages in Nigeria, namely legal mortgages and equitable mortgages. The mode of creating a legal mortgage in Nigeria is determined by the law applicable in the State where the property is situated. Given that it grants the mortgagee legal title to an item, a legal mortgage is the most secure and complete type of security interest. In contrast, an equitable mortgage entails the transfer of the mortgagor’s beneficial interest in a property to the mortgagee as collateral for the fulfillment of debts.

Legal Mortgage

The most secure and complete type of security interest is a legal mortgage, which gives the mortgagee legal title to the collateral and forbids the mortgagor from dealing with the mortgaged property while it is still secured by the mortgage.

Equitable mortgage

The transfer of the borrower’s beneficial interest in a property to the lender as security for the fulfillment of specific obligations constitutes an equitable mortgage. This transfer is made with the express or implied understanding that the beneficial interest will be returned to the borrower once the secured obligations have been satisfied.

It should however be noted that there are three (3) laws governing the administration of mortgages in Nigeria.

The Conveyance Act, of 1881 (CA)

Under the Conveyancing Act, there are two methods of creating a legal mortgage:

  1. By assignment of the entire and unexpired residue of the mortgagor’s leasehold interest to the mortgagee (under the Land Use Act) with a proviso for cesser upon redemption.
  2. Sub-demise (sub-lease) of the unexpired residue less few days with a proviso for cesser upon redemption (could even be less one day)

Property & Conveyancing Law (PCL) is applicable in States in the old Western and Midwestern regions namely Ondo, Osun, Oyo, Ogun, Edo, Ekiti, and Delta except for Lagos.

Under the PCL, there are two methods of creating a legal mortgage:

  1. The demise of a freehold for a term of years absolute subject to cesser on redemption.
  2. Sub demise (sublease) for a term of years absolute, less at least one day than the term vested in the mortgagor and subject to provision for cesser on redemption.
  3. A legal charge by Deed expressed to be by way of a legal mortgage

Creation of Legal Mortgage in Lagos State

The law regulating all mortgage transactions in Lagos State is the Mortgage and Property Law (M&PL) of Lagos State, 2010 which abolished the Property and Conveyancing Law. Under the M&PL, a mortgage can only be created in the following ways

  1. A demise (the conveyance or transfer of property) of a term of years absolute, subject to a cesser on redemption.
  2. A charge by deed is expressed to be by way of a legal mortgage.
  3. A charge by deed is expressed to be by way of statutory mortgages in the forms provided under this law.



Whether you are starting big or small, not all the places you use for professional and residential transactions will be yours, you will either rent or lease some. Each State of Nigeria has its tenancy law which governs the service of notices, rights of a landlord, rights of tenants, increment of rent, peaceful possession of the property, etc.


Also known as PITA and CITA. It is a general knowledge that citizens are expected to pay tax which in return helps the government in the dispensation of their duties to the general citizenry. Also, up-to-date payment of tax as a business owner and a business entity is part of the things you will be expected to submit while applying for loans and/or grants from both local and international financial organizations and government financial institutions like the Bank of Industry. The latest Tax Regulation 2018 also states that your Special Purpose Vehicles may be taxed.

  1. FINANCE ACT 2023

This was signed into law by the former president, Mohammed Buhari while he was about to leave office. The Act makes some amendments to Capital Gains Tax Act, Companies Income Tax Act, Personal Income Tax Act, Petroleum Profit Tax Act, Value Added Tax Act, Tertiary Education Trust Fund Act, Customs, Excise, Tariff Act, Stamp Duties Act, Public Procurement Act, Corrupt Practices and other Related Offences Act and Ministry of Finance (Incorporated) Act.




After the declaration of interest to purchase a plot of land or landed property, due diligence is carried out, and the Sales Agreement is put in place between the Vendor and the Purchaser stipulating the amount the property will be sold and any other conditions that would be fulfilled before total alienation takes place.


This is the document that perfects the alienation of the property. It is the final document that exchanges the hands of the parties to the transaction.


It should be noted that this document in particular is not only used in the alienation of a property or property transactions. It is a document bestowing power and responsibilities from the Donor to the Donee.

However, when it is used in property transactions, it is bestowing the rights, duties, and obligations expected of the Donor to Donee either for a period certain or forever which must be explicitly stated in the Power of Attorney.


This is an Agreement that spells out the terms of a Partnership. The Partnership might be Sponsoring Partnership, i.e. A wants to purchase a property worth N4,000,000,000.0 (Four Billion Naira Only) but A does not have up to that amount at the present but he knows in a couple of months he would get the amount. If A decides to wait till then before purchasing the property, he would miss purchasing it. On the other hand, B has more than N4,000,000,000.0 that he is not using presently. A and B can enter into a Partnership whereby B will give A the amount of money he needs with an agreement to pay back N4,500,000,000.0 after some months. After the payment, A takes full possession of the property.

All other terms and conditions of this Partnership would be expressly stated in the Agreement.


Special Purpose Vehicles or Entity is a type of Project Finance under Corporate Finance. Whenever Companies or entities want to embark on a new project in which they do not want the mother company to be involved or hide some finances or raise capital for a project, Special Purpose Vehicles or Entities are created. They are created to carry out a particular function, they have Directors and Shareholders just like a normal company. For example, HH Holdings, a Special Purpose Vehicle created by Tony Elumelu’s Heirs Holding purchased about 9 Billion Transcorp shares. So also, Sowami of Ardova Plc’s Special Purpose Vehicle, Ignite Investment and Commercial Limited (IICL). So as a Real Estate company carrying out different projects and desires to isolate the risk of that project from your company, you need a Special Purpose Vehicle.


The coming together of a person and an estate company or two estate companies to jointly execute a particular project. The Agreement amongst other things must spell out the input of each party to the project and also state the profit-sharing formula. It is pertinent to be agreed before signing if the Joint Venture Agreement will include any reversionary clause.


Funny enough this is the Agreement I was told to draft when I went for the Interview at my present place of work. The Agreement must disclose the amount sought, the duration, repayment plan and also state if it is a security-based loan or not.


For those that are basically into Property Management, virtually all their transaction revolves around these 2 documents. It must spell out the duties and rights of both parties, the duration of the rent or lease, the rent review clause, and the rate.


At the preliminary stage of every land and landed property transaction, it is advised that after the exchange of details about the property, the party intending to purchase the said property should carry out searches to verify the authenticity of what the intending Vendor has and is saying about the property. Searches about a property should be carried out at the Land Registry of that particular jurisdiction and also the court registry to know if there is an existing court case on the said property before purchasing the property.

In a nutshell, we have discussed some of the vital laws and documents needed for a perfect real estate transaction. It is advised that you engage the services of a Lawyer for this aspect of your real estate business.

Adebola Valentine Adeleye Esq. is a Real Estate Lawyer and has keen passion and interest in Corporate and Commercial practice. He is based in Abuja and can be reached through or 08108173996