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Legal Alert Tourism & Hospitality Regulations in Nigeria
 
In this Issue:
1. Legal Alert for October, 2009 – Tourism and Hospitality Regulations in Nigeria
2. Subscribe & Unsubscribe to Legal Alerts.
3. Disclaimer Notice.
Legal Alert for October, 2009 – Tourism & Hospitality Regulations in Nigeria.
The objective of tourism and hospitality development and promotion in Nigeria continues to meet with minimal success due to lack of basic infrastructure and enlightenment on the economic, social, political and health benefits of tourism and the hospitality industries. Nigerians prefer to travel overseas for their vacation and health care needs to the disadvantage of the very large tourism potential in Nigeria. To address this problem, the Nigerian government enacted another Tourism Law to promote, develop and regulate tourism and hospitality businesses in Nigeria.
Nigerian Tourism Development Act, 1992
The Nigerian Tourism Development Corporation Act established the Nigerian Tourism Development Corporation (NTDC) as the statutory authority empowered to promote, develop and regulate tourism and hospitality businesses in Nigeria. NTDC is also required by statute to among other things encourage people living within and outside Nigeria to take their holidays in Nigeria, in addition to encouraging the provision and improvement of tourism amenities and facilities in Nigeria. The latter responsibility includes the encouragement of the development of Hotels and their ancillary facilities necessary to promote tourism.
It is also the statutory responsibility of NTDC to register, classify and grade tourism, hospitality, travel agencies and tour operators' establishments in Nigeria. The Hotel Inspectorate Division of NTDC is charged with this responsibility of registering, classifying, grading and monitoring Hotels and other Hospitality businesses in Nigeria. Annexed to the NTDC Act is the Hospitality and Tourism Establishments (Registration, Grading and Classification) Regulations. NTDC has the power to suspend or revoke a certificate of registration. The exercise of this power can however be appealed against, administratively and judicially.
States & Local Governments Tourism
All the thirty-six (36) States in the Federal Republic of Nigeria are required to have a State Tourism Board. Each State Tourism Board has the responsibility of assisting NTDC in the implementation of the promotion and development of tourism, in its entirety in that State, to the benefit of the entire Federation of Nigeria.
Each Local Government Area in each of the thirty-six (36) States of the Federal Republic of Nigeria also has established for them, statutorily, a Local Government Tourism Committee (LGT Committee) which has the responsibility of recommending to the NTDC Tourism Board, tourism projects in that local government area for the enhancement of tourist attractions, the preservation and maintenance of monuments and museums, among other functions.
NTDC Inspectors & Cooperation of Hospitality Establishments
All proprietors and managers of hospitality and tourism establishments are required by the NTDC Act to provide full cooperation to NTDC Inspectors in the discharge of their statutory duties. Where any person, whether a proprietor, proprietress, owner, manager, agent, employee or howsoever described delays or obstructs an inspector or fails to provide the required information or cooperation in the execution of the Inspectors statutory duties under the NTDC Act, such a person commits an offence which on conviction carries a fine of N1,000 or a term of imprisonment of one month, or to both the term of imprisonment and the fine.
Hospitality & Tourism Establishments (Registration, Grading & Classification) Regulations, 1995
No person is authorised, under any circumstances, to operate a hospitality or tourism establishment unless he or she has applied for and obtained and remains in possession of a current NTDC certificate of registration specifying the owner of the establishment where the hospitality or tourism business is carried on, the premises, etc. The only exception to this NTDC registration rule are premises used exclusively for boarding persons in religious, educational or charitable institutions, charitable places for the handicapped persons and children, private houses, furnished apartments used for residential periods not exceeding one month, government guest houses and lodges, etc.
The owner of a hospitality and tourism establishment must within sixty (60) days from the date of its commencing business operations apply to NTDC for an annual renewable registration, classification or re-classification of its hospitality or tourism establishment. The application for registration, classification or re-classification must be accompanied by the prescribed NTDC fees and such other documents as may be reasonably required by NTDC.
Every NTDC certificate of registration expires on the 31st day of December of the year in which the NTDC certificate was issued.
The Owner of every hospitality or tourism establishment is mandatorily required to display its NTDC certificate of registration in a prominent place at its reception desk. The owner of such an establishment is also required to display outside its premises, the sign provided by NTDC indicating the name of the establishment, its classification and grading status. Any owner or manager who uses a star or crown sign other than as classified or graded by NTDC commits an offence which on conviction attracts a fine of N5,000.
Also, any owner or manager who fails to apply for NTDC registration within sixty (60) days of its commencement of operation is liable on conviction to a fine of N5,000 in the first instance and a further penalty ranging from N1,000 to N2,000 for every week, after the period of registration has expired and registration is not effected.
All owners of every tourism and hospitality establishment involved in charter or tour services are also required to register their establishment with NTDC in addition to obtaining from a reputable insurance company a business guarantee bond in the minimum amount of N500,000 against all fiduciary liabilities of such an establishment.
Checklist for NTDC Hospitality & Tourism Establishments Registration
Subject to such additional requirements as NTDC may prescribe, the following must be presented for registration to be considered: -
(a) NTDC Application form and fees;
(b) Completed registration documents;
(c) Evidence of good character and capability of operating or managing a hospitality or tourism establishment;
(d) The Hospitality or tourism premises is structurally adapted to the Hospitality or Tourism business;
(e) Proper sanitation is provided in the designated premises;
(f) Uninterrupted electricity, portable water, proper fire fighting equipment and adequate security must be provided;
(g) Proper provision is made for the storage, preparation and serving of food;
(h) The premises complies with health requirements in force in Nigeria;
(i) The establishment will be conducted in an efficient manner;
(j) The premises will not harbour criminals.
Conclusion
NTDC continues to publish the advantages of tourism to the people living within and outside Nigeria. The infrastructure deficiencies in Nigeria however remain a great challenge in reversing an otherwise detoriorating culture and apathy to tourism generally in Nigeria. The State and Local Government areas tourism bodies are not visibly functional to assist NTDC in covering a country with a vast land mass as Nigeria. The efforts of NTDC and private investors will be greatly enhanced if these problems are resolved.
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DISCLAIMER NOTICE. This Legal Alert is a free educational material, for your general information and enlightenment purposes ONLY. This Alert, by itself, does not create a Client/Attorney relationship between yourself and our Law Firm.
Recipients are therefore advised to seek professional legal counselling to their specific situations when they do arise. Questions, comments, criticisms, suggestions, new ideas, contributions, etc are always welcomed with many thanks.
This Legal Alert is protected by Intellectual Property Law and Regulations. It may however be shared with other parties provided that our Authorship is always acknowledged and this Disclaimer Notice is attached.
Legal Alert Lagos State Consumption Tax Law
 
In this Issue:
1. Legal Alert for September, 2009 – Lagos State Consumption Tax Law
2. Subscribe & Unsubscribe to Legal Alerts.
3. Disclaimer Notice.
Legal Alert for September, 2009 – Lagos State Consumption Tax Law
Declining oil revenues with declining infrastructural facilities that are unable to match an over-populated State, etc has led to the Lagos State Government passing into Law the Lagos State Hotel Occupancy, Restaurants and Events Centres Consumption Tax Law, 2009 (the Lagos State Consumption Tax). This Law imposes a five per cent (5%) tax on all goods and services consumed in Hotels, Restaurants and Events Centres' situated within the territory of Lagos State.
Despite the five per cent (5%) charge being excluded from being charged on the existing five per cent (5%) Value Added Tax charge (and service charge), establishments in the Hospitality, Tourism and entertainment industries are opposed to this tax on legal and cost-of-doing business grounds.
This Alert considers what the Consumption Tax provides for, with the grounds of the opposition to it. This will keep you informed on how it affects you, the final consumer.
The Consumption Tax
The five per cent (5%) consumption tax, which excludes the existing charge on VAT and service charge, is charged on the consumer of goods and services in hotels, restaurants and events centres which operate within the territory of Lagos State. The Owner, Manager or Controller of these kinds of business establishments are mandated to collect this tax on behalf of the Lagos State Government and remit the tax collected to the Lagos State Inland Revenue Service (LIRS).
All Hotels, Restaurants and Events Centres affected by this Law must within a period of thirty (30) days of the commencement of this Law or the commencement of the business of the operators of such an establishment, register with LIRS for the application of the provisions of this Law.
All consumption tax collected must be reported and remitted to LIRS on or before the 20th day of each calendar month. Failure to make a return or effect a remittance, or where a return or a remittance are not substantiated by the record of the business establishment concerned, LIRS may use its best of judgement to estimate the amount of the consumption tax payable for the relevant period, and the estimate must be paid by the collecting owner/agent within twenty-one (21) days of the service of the order on the collecting owner/agent.
Any Consumption Tax that is not remitted within the prescribed period shall in addition to other penalties prescribed by the Consumption Tax Law bear interest at the rate of five per cent (5%) per annum above the Central Bank of Nigeria (CBN) minimum rediscount rate as is determined by the CBN at the time of the actual remittance. A collecting owner/manager/agent who in addition fails to file a report and remit the consumption tax collected within the time required is in addition liable to pay a further penalty of ten per cent (10%) of the amount due. A Director, Manager, Officer, Agent or employee who fails to comply with this Law is equally guilty of an offence and liable on conviction to a penalty of six (6) months imprisonment or a fine of N2,000,000 (Two Million Naira) or to both the term of imprisonment and the fine.
Any owner, manager, controller or collecting agent has a right to appeal in the first instance to the Chairman of LIRS within seven (7) days of his receipt of a consumption tax assessment requesting the revenue service to review, amend or reverse the assessment. Where the appeal fails, the Owner or the collecting agent has the right of further appeal against such a decision to the Lagos State High Court.
The Lagos State Sales Tax Law is exempted from applying to the premises to which the Lagos State Consumption Tax Law already applies; i.e. Hotels, Restaurants and Events Centres'.
VAT vs. Lagos State Consumption Tax Law
To prevent multiple taxation and the anarchy associated with it, the old Sales Tax Act was abrogated and in its place, Value Added Tax (VAT) was introduced for application to the entire federation (and states) of Nigeria. VAT, which is also a consumption tax, is charged and paid on the supply of all goods and services other than such goods and services which are expressly exempted under the VAT Act.
VAT, like the Lagos State Consumption Tax, is charged at the flat rate of five per cent (5%) of the goods or services enjoyed by the ultimate consumer. Unlike the Lagos State Consumption Tax which is solely for the benefit of the Lagos State Government, VAT is administered by the Federal Government of Nigeria Agency, the Federal Board of Inland Revenue (FBIR), with the proceeds of VAT being distributed under an agreed formular by the 36 States of the Federation of Nigeria. It has been contended that firstly, VAT as presently administered, is against the principle of federalism and secondly that its distribution formula is extremely inequitable in the light of the fact that a large percentage of VAT collected in Nigeria is from businesses situated in Lagos State.
The Taxes and Levies (Approved List for Collection) Act, 1998 also does not accommodate State Governments enacting for their own States, a separate Consumption Tax. The Supreme Court decision in Attorney General of Ogun State v. Alhaja Ayinke Aberuagba (1997) 1 NRLR (part 1) 51 @ 60 held that a State Law on consumption tax might be void on the ground of covering the field where identical legislations, without any inconsistency on the same subject matter, were made by a State and by the Federal Government. In such a situation, the State Law must give way to the Federal legislation. However, the Ogun State Sales Tax Law was declared null and void by the Supreme Court in this case because the Law imposed a tax on goods and services brought into the State which was a matter of inter-state trade and commerce which is within the exclusive legislative power of the Federal Government.
The Taxes and Levies (Approved List for Collection) Act, 1998 was not applicable at the time the Aberuagba matter was decided by the Supreme Court. Equally instructive on this matter are the provisions of the 1999 Construction of the Federal Republic of Nigeria, 2nd Schedule (part II) paragraphs 9, 18 and 19, which authorises a State House of Assembly to make laws for the collection of any tax, fee or rate, or to make laws for the industrial, commercial or agricultural development of a State. Section 4 (7) of the 1999 Constitution also empowers a State House of Assembly to make laws for the peace, order and good government of the State in respect of any matter that is not included in the exclusive legislative list, or any matter included in the concurrent list or any other matter with respect to which it is empowered to make laws by the provisions of the 1999 Constitution.
Conclusion
It is arguably the case that Nigeria is one of the countries in the world that is perceived to have some of the highest cost of doing business as a result of the lack of basic infrastructural facilities and multiple taxation. The co-existence of VAT with the Lagos State Consumption Tax will only exacerbate these perceptions to the further peril of all the economies, State or Federal, in the Federation of Nigeria. The inability to equitably restructure the distribution of VAT proceeds, or to increase its charging rate while reducing the tax rates for personal and corporate taxes makes a strong case for the transfer of its administration to each individual State in the Federation of Nigeria for VAT to be charged on goods and services distributed within that State while the Federal Government administers VAT on goods and services within its direct jurisdiction, i.e. matters on the exclusive legislative list.
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This Alert and others produced by us are provided without any charge to you. You can always subscribe to it, on behalf of other interested persons from whom you have their permission, by sending to us a one line e-mail with the words "Subscribe – Legal Alerts" followed by the desired email address.
You are equally permitted to terminate your subscription by sending to us a one line email with the words "Unsubscribe - Legal Alerts" and your electronic address would be removed from our list. In the future, you can return to our mailing list by visiting our web site www.oseroghoassociates.com to subscribe for the Legal Alerts.
DISCLAIMER NOTICE. This Legal Alert is a free educational material, for your general information and enlightenment purposes ONLY. This Alert, by itself, does not create a Client/Attorney relationship between yourself and our Law Firm.
Recipients are therefore advised to seek professional legal counselling to their specific situations when they do arise. Questions, comments, criticisms, suggestions, new ideas, contributions, etc are always welcomed with many thanks.
This Legal Alert is protected by Intellectual Property Law and Regulations. It may however be shared with other parties provided that our Authorship is always acknowledged and this Disclaimer Notice is attached.
Legal Alert Stamp Duties Law & Enforcement
 
In this Issue:
1. Legal Alert for August, 2009 – Stamp Duties Law & Enforcement in Nigeria.
2. Subscribe & Unsubscribe to Legal Alerts.
3. Disclaimer Notice.
Legal Alert for August, 2009 – Stamp Duties Law & Enforcement in Nigeria
The recent economic down-turn and governments' need to expand their revenue base brought about the resuscitation of the legal requirement that all written instruments in Nigeria, of a contractual nature, must be stamped. This development has led to some disquiet in the business community where many practitioners are curious to know the legal basis for this "new tax" requirement.
Stamp duties payment is one of the oldest imposed tax. It is true that stamp duties is the least recognised and enforced of all the taxes and duties in Nigeria. However, in modern times, the legal requirement that all written documents must be stamped obviously affects everyone's day-to-day business life.
Stamp duties payment matters are governed by the Stamp Duties Act, cap 411, Laws of the Federation of Nigeria, 1990. This legal alert gives you a synopsis of what the Stamp Duties Act regulates.
Stamp Duties Act
Stamp duties, unlike other forms of taxes or duties, are taxes on written documents as opposed to taxes directly imposed on individuals or their transactions.
The care for and the management of stamp duties in Nigeria is imposed on the Commissioner for Stamp Duties. The Federal Government of Nigeria is the only competent authority allowed to impose, charge and collect stamp duties on written instruments between one incorporated company and another incorporated company or individual. The converse is the case that State Governments impose, charge and collect stamp duties on written instruments that are executed between individuals only.
Unlike other taxes, the decision not to stamp a written document does not attract a criminal penalty as it only bars such a written document from being admitted in evidence in a civil judicial proceeding. Thus, until a written document is stamped at the Stamp Duties office by the payment of the applicable stamp duties on the document, such a document will remain inadmissible. See Section 22 (4) of the Stamp Duties Act.
Generally, stamp duties is charged at the rate of 75k on every N50 of the consideration of a conveyance. For other kinds of written documents, various rates of charge are imposed as stamp duties.
In the term of implementation, a written document is stamped by the affixing of adhesive stamps on it or the affixing of what is known as a die to the material or written instrument.
Every written instrument which is required to be stamped with an adhesive stamp must be stamped on or before its execution. In practice however, a grace period of forty days from when the written instrument is executed is allowed before a penalty accrues on the document for late presentation for stamping.
Any person presenting a written document for stamping after the date of its first execution must pay a penalty which includes (i) the unpaid stamp duty; (ii) a penalty of N20 or such sum as is charged by the stamp duty office; (iii) interest on such duty at the rate of ten per cent (10%) per annum from the day when the instrument was first executed up to the time when the unpaid duty is paid.
Conclusion
Barring any special reason, it is always recommended that sensitive business documents should be stamped before or immediately they are executed. There are stamp duties offices all over the federation of Nigeria who are always willing to provide applicants with information and assessment of what it will costs them to stamp their documents. This is a preferred option to none stamping of your written documents.
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This Alert and others produced by us are provided without any charge to you. You can always subscribe to it, on behalf of other interested persons from whom you have their permission, by sending to us a one line e-mail with the words "Subscribe – Legal Alerts" followed by the desired email address.
You are equally permitted to terminate your subscription by sending to us a one line email with the words "Unsubscribe - Legal Alerts" and your electronic address would be removed from our list. In the future, you can return to our mailing list by visiting our web site www.oseroghoassociates.com to subscribe for the Legal Alerts.
DISCLAIMER NOTICE. This Legal Alert is a free educational material, for your general information and enlightenment purposes ONLY. This Alert, by itself, does not create a Client/Attorney relationship between yourself and our Law Firm.
Recipients are therefore advised to seek professional legal counselling to their specific situations when they do arise. Questions, comments, criticisms, suggestions, new ideas, contributions, etc are always welcomed with many thanks.
This Legal Alert is protected by Intellectual Property Law and Regulations. It may however be shared with other parties provided that our Authorship is always acknowledged and this Disclaimer Notice is attached.
Legal Alert Dormant Companies – Legal & Tax Implications
 
In this Issue:
1. Legal Alert for July, 2009 – Dormant Companies in Nigeria – Legal & Tax Implications.
2. Subscribe & Unsubscribe to Legal Alerts.
3. Disclaimer Notice.
Legal Alert for July 2009 – Dormant Companies in Nigeria – Legal & Tax Implications
There is no statutory description, in Nigeria, of what a dormant company is, or what a dormant company means. In practice however, a dormant company is one that is not carrying on business or trading, for whatever reason. In jurisdictions where legislative provision is made for regulating dormant companies, a dormant company is described as one that has not had any significant accounting transaction during the relevant financial year.
Shareholders of dormant companies in Nigeria have over the years being under the impression that there were no statutory reporting and compliance requirements for them under Nigerian Law. Efforts by the Corporate Affairs Commission ("CAC") to de-list some dormant companies in Nigeria have also not served as a deterrent for these companies to meet the minimum regulatory requirements.
This Alert reviews the minimum legal and tax compliance requirements for all incorporated companies in Nigeria, whether they are dormant or active.
Legal Compliance Requirements
All incorporated companies in Nigeria are regulated by the provisions of the Companies and Allied Matters Act, 1990 ("CAMA"). It is a mandatory provision of CAMA that every company in Nigeria must hold its first Annual General Meeting ("AGM") within eighteen months of its incorporation. Subsequent AGMs must be held at least once in a year by shareholders of each and every company in Nigeria.
The failure to hold any of these statutory shareholders meetings renders the incorporated company and every officer of it liable, on conviction, to a fine of N50 (Fifty Naira) for every day for which the offence continues unabated. In some instances, the failure to hold an AGM and file the appropriate Annual Returns ("AR") could be a ground for winding up a company. See Sections 211, 212 and 408 of CAMA.
A key item for consideration at every shareholders meeting is the review and approval of the audited accounts of the company. Once the audited accounts of a company are approved by its shareholders, the annual returns for the company with the accompanying audited accounts must be filed at the CAC within 42 days after the date of the holding of the AGM. The annual returns of every Nigerian incorporated company must disclose the situation of the register of the members/shareholders of the company with the list of its debenture holders, the particulars of the current directors, shareholders and secretary of the company, it's authorised issued and paid up capital, turnover and debts, etc.
Tax Compliance Requirements
Every company that is incorporated/registered in Nigeria is required to file a tax return, preferably a self-assessment tax return, at least once in a year. Accompanying the tax return must be the audited accounts of the company or a statement of its affairs indicating that it has not been engaged in material financial activity. A one percent bonus is usually credited to companies that file their tax returns and pay their taxes within the statutorily stipulated period.
A minimum tax is payable where a company declares that it has not made any profit in the relevant tax year. The minimum tax provision is however not applicable if at least 25% of the equity holding of the company is held by a foreign investor or the company is engaged in agricultural business or it is within the first four (4) years of its carrying on its business.
The penalty for late filing or non-filing of a tax return is N25,000 for the first month in which the failure occurred, and N5,000 for each subsequent month in which the failure continues. Where the offence of late filing or non-filing is established to have been committed with the knowledge or consent or connivance of a director or manager or secretary of the company, such a company official shall be liable on conviction to a fine of N10,000 or to imprisonment for a term of two years or to both the fine and the term of imprisonment. See Section 41 of the Companies Income Tax Act ("CITA").
Conclusion
Legal and tax commentators have criticised the lack of adequate regulation of dormant companies in Nigeria. In addition to their existence being a loss of revenue to the government, it is argued that they deprive other entrepreneurs the opportunity to utilise the business names of such dormant companies particularly where the shareholders of the dormant company have abandoned any intention of continuing to carry on business under such a name in the future.
The minimum legal and tax requirements for all corporations in Nigeria, whether dormant or not, are higher when compared to jurisdiction like the United Kingdom where the reporting requirements for a dormant company are enumerated in the UK Companies Act, and are minimal. Present attempts to amend the provisions of CAMA will do well to recognise the short-term benefits on the one hand or disadvantages on the other that a dormant company may have to the Nigerian economy, and regulate its practice accordingly.
Until CAMA and CITA legislations are amended, dormant companies in Nigerian will be advised to comply with the existing statutory requirements.
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This Alert and others produced by us are provided without any charge to you. You can always subscribe to it, on behalf of other interested persons from whom you have their permission, by sending to us a one line e-mail with the words "Subscribe – Legal Alerts" followed by the desired email address.
You are equally permitted to terminate your subscription by sending to us a one line email with the words "Unsubscribe - Legal Alerts" and your electronic address would be removed from our list. In the future, you can return to our mailing list by visiting our web site www.oseroghoassociates.com to subscribe for the Legal Alerts.
DISCLAIMER NOTICE. This Legal Alert is a free educational material, for your general information and enlightenment purposes ONLY. This Alert, by itself, does not create a Client/Attorney relationship between yourself and our Law Firm.
Recipients are therefore advised to seek professional legal counselling to their specific situations when they do arise. Questions, comments, criticisms, suggestions, new ideas, contributions, etc are always welcomed with many thanks.
This Legal Alert is protected by Intellectual Property Law and Regulations. It may however be shared with other parties provided that our Authorship is always acknowledged and this Disclaimer Notice is attached.
Legal Alert Land Ownership & Land Certificates in Nigeria Probative Value
 
In this Issue:
1. Legal News – Lagos State Consumption Tax Law
2. Legal Alert for June, 2009 – The probative value of land certificates to land ownership in Nigeria.
3. Subscribe & Unsubscribe to Legal Alerts.
4. Disclaimer Notice.
Legal News: Lagos State Consumption Tax Law
The Lagos State Government has signed into Law a Consumption Tax Law on goods and services consumed in Hotels, Restaurants and Event Centres. A flat 5% tax will now be charged at all such venues to the exclusion of the already existing VAT tax.
Legal Alert for June 2009 – Land Ownership & Land Certificates in Nigeria – Probative Value of?
Land has remained an invaluable asset to mankind. The failure to secure the legal title to land by registration or by obtaining the approval/consent of the appropriate government authority usually leads to conflicts and expensive litigation. This Alert is meant to provide you with some information on the recognised methods of establishing title to land in Nigeria, the probative legal value of a certificate or right of occupancy - which is the most common form of land document in Nigeria - and the need to register all titles to land in Nigeria.
Methods of Establishing Land Title in Nigeria
The legal responsibility of establishing ownership to land in Nigeria is placed on the party who alleges that such a piece of property belongs to him or her. Five different methods are recognised for discharging this responsibility and they are:-
(a) Proof of ownership to land by traditional evidence, i.e., ancestral possession and inheritance.
(b) Production of land title document that is duly authenticated.
(c) Numerous positive acts of ownership over a sufficient length of time to warrant the reasonable inference of ownership.
(d) Acts of long undisturbed possession and enjoyment of land.
(e) Possession of adjacent land could raise the presumption of ownership of the land in question.
Certificate of Occupancy – Probative Value
A Certificate of Occupancy is the land title document that is delivered to the owner of a piece of land by the government attesting to the owner's title to the land which ownership is in accordance with the applicable law. Over time, users of land and financial institutions have elevated this type of land document to be conclusive evidence of the ownership of the land described in it, to the exclusion of any other party claiming title to the same piece of land.
Judicial decisions in Nigeria however indicate that a Certificate of Occupancy is merely a prima facie - first sight - evidence of an owner's title to the exact piece of land that is described in the Certificate of Occupancy. A Certificate of Occupancy is therefore not a conclusive proof of title to land neither does it validate spurious or fraudulent instruments of title to land which are in law fatally invalid.
Governor's Consent & Registration of Title
The Land Use Act extinguished the unlimited rights and interests to land that Nigerians had prior to the enactment of the Land Use Act. In place of the prior unexhausted rights to land, the Land Use Act vested all land in the territory of a state solely on the Governor of the State, who holds all land in that State in trust for the use and common benefit of all Nigerians. The Land Use Act also introduced a rigid regime of controls on the use or otherwise of all land in Nigeria.
One of the key controls introduced by the Land Use Act is the requirement that any transaction or instrument which confers or vests or transfers or limits or charges or extinguishes any interest or right in land on another party must first be approved by the Governor of the State where the land is situated. Where the prior approval or consent of the Governor is not first sought and obtained, such alienation or transfer is deemed in law to be null and void, and of no effect whatsoever. See, SAVANNAH BANK v. AJILO (1989) 1 SC (PT. 11) 90 @ 92
The argument that the failure to obtain Governor's consent only makes the transaction inchoate and not void has been rejected by the Supreme Court of Nigeria particularly where the application for Governor's consent was not made before the dispute was submitted for judicial adjudication, and where the application for consent is made and granted, the consent of the Governor must be pleaded and exhibited before final judgment is delivered. See, CALABAR CO-OP V. EKPO (2008) 1-2 SC 229 @ 285.
Registration of Land Instruments
The Land Instruments Registration Law of Lagos State requires that any document affecting land in Lagos State, in whatever manner, must be registered at the Lands Registry. Failure to register such a document implies that the document is void. Equally significant is the legal principle that a void document cannot be pleaded or held admissible by a Court of Law. The Registration of Titles Law of Lagos State also compulsorily requires all Instruments relating to land to be registered.
CONCLUSION
The clamour for appropriate amendments and in some instances outright abolition of the existing land legislations in Nigeria, at the federal and state levels, has been heightened in the present financial year. Without the necessary amendments, land transactions in Nigeria will not be business-friendly for meaningful development to take place.
Pending the time when the expected amendments to our land legislations are made, you will do well to ensure compliance with existing laws regulating ownership and control of land in Nigeria.
Subscribe & Unsubscribe to Legal Alerts
This Alert and others produced by us are provided without any charge to you. You can always subscribe to it, on behalf of other interested persons from whom you have their permission, by sending to us a one line e-mail with the words "Subscribe – Legal Alerts" followed by the desired email address.
You are equally permitted to terminate your subscription by sending to us a one line email with the words "Unsubscribe - Legal Alerts" and your electronic address would be removed from our list. In the future, you can return to our mailing list by visiting our web site www.oseroghoassociates.com to subscribe for the Legal Alerts.
DISCLAIMER NOTICE. This Legal Alert is a free educational material, for your general information and enlightenment purposes ONLY. This Alert, by itself, does not create a Client/Attorney relationship between yourself and our Law Firm.
Recipients are therefore advised to seek professional legal counselling to their specific situations when they do arise. Questions, comments, criticisms, suggestions, new ideas, contributions, etc are always welcomed with many thanks.
This Legal Alert is protected by Intellectual Property Law and Regulations. It may however be shared with other parties provided that our Authorship is always acknowledged and this Disclaimer Notice is attached.