[REIC 029] You Need to Understand Revocation of the Right of Occupancy to Protect Your Real Estate Investment

Like i said, last week, in this week’s issue of my Real Estate Investment Chronicles (REIC)™ newsletter, i shall be analyzing, to a considerable extent, the, definition and function of a few provisions of the Land Use Act.

Today, I focus on revocation of the right of occupancy, by the government i.e. by this I mean both the state and local government.

The two key officers mentioned above, have the sole authority, to do so (i.e. revocate occupancy right), under the Land Use Act.

Definition of what the terms, Right of Occupancy and Revocation of Right of Occupancy mean…

1. Occupancy: According to www.thelawdictionary.org occupancy is a mode of acquiring property by which a thing which belongs to nobody becomes the property of the person who took possession of it, with the intention of acquiring a right of ownership in it.
2. Revocation of Right of Occupancy by my own definition means: “taking away or taking back, the right that one has over something”

Now, to a layman, reading this article, you should be able to understand, the relevance of both terms, with respect to landed property acquisition.

According to this act, the Certificate of Occupancy grants you the right to ownership.

But it isn’t an absolute ownership because the same government that issued the document to you has same prerogative, to retrieve it, for overriding public interest i.e. for public use – and your entitlement, in return, is a fair compensation from the government, which is another area, I will talk about, in subsequent articles.

Read more about overriding public interest, from the excerpts reproduced below from an article, that I wrote, sometime ago.

[Click here to request the PDF report titled “8 POTENTIALLY COSTLY MISTAKES NOVICE REAL ESTATE INVESTORS MAKE!” in which the article is featured]:

A massive construction work, took place, in the metropolis, years back. Countless houses were pulled down by the physical planning department at Alausa – after notice was served prior to commencement of actual demolition.

In fact the event attracted the TV and paper media who came around to capture the scenes.

There was a huge outcry and complaints, that came from the affected occupants of that area, and it was understandable, since no one will be happy to have a house s/he struggled to build demolished!

I was however surprised, by their reactions, and I asked myself, don’t the affected victims, know such development is enshrined in the act etc?

I believe if they had been aware, they would not have had THAT kind of reaction to the exercise.

The truth is that anarchy has overtaken our society so that with the same law in place favoritism in large areas of the environment was still the order of the day, in that, most houses that were affected that fell inside the right of way, according to the layout with the government were spared, while the innocent ones were majorly affected.

I witnessed all these happenings from the beginning to the end in the year 2012.

Like I always say, the blame is on most of us. Our attitude, to the laws of our society is just too bad.

We are too lackadaisical and complacent, because if we actually desire that most of the laws be amended, it’s our civic right, to rise up to the challenge and make this happen.

Don’t get me wrong.

I’m neither in support of some of these provisions of the law, nor the events that took place in the real life instance of the demolition described above.

But just to take our attention to the function of the law, regarding the Revocation of Right of Occupancy and the ignorance, of some of the C of O holders, to that act…

It is important to note that the Almighty C of O, doesn’t confer absolute ownership on the holder, but just temporary ownership.

In fact are you aware that the C of O has a limited validity period of 99 yrs?

Chances are good that you, like most people, are not aware. Well we shall discus that in a future article.

For now, let’s Endeavour to acquire basic knowledge of the laws around us most especially, the landed property purchasers.

Below: Towards the above recommended end, here are excerpts from the Land Use Act which feature provisions of what the act says about revocation of the right of occupancy:

Part V

Revocation of Rights of Occupancy and compensation therefore

28. (1)      It shall be lawful for the Governor to revoke a right of occupancy for overriding public interest.

(2)      Overriding public interest in the case of a statutory right of occupancy means–.

(a)       the alienation by the occupier by assignment, mortgage, transfer of possession, sublease, or otherwise of any right of occupancy or part thereof contrary to the provisions of this Act or of any regulations made thereunder;

(b)       the requirement of the land by the Government of the State or by a Local Government in the State, in either case for public purposes within the State, or the requirement of the land by the Government of the Federation for public purposes of the Federation;

(c)        the requirement of the land for mining purposes or oil pipelines or for any purpose connected therewith.

(3)        Overriding public interest in the case of a customary right of occupancy means –

(a)       the requirement of the land by the Government of the State or by a Local Government in the State in either case for public purpose within the State, or the requirement of the land by the government of the Federation for public purposes of the Federation.

(b)       the requirement of the land for mining purposes or oil pipelines or for any purpose connected therewith;

(c)        the requirement of the land for the extraction of building materials;

(d)       the alienation by the occupier by sale, assignment, mortgage, transfer of possession, sublease, bequest or otherwise of the right of occupancy without the requisite consent or approval.

(4)        The Governor shall revoke a right of occupancy in the event of the issue of a notice by or on behalf of the (Head of the Federal Military  Government) if such notice declares such land to be required by the Government for public purposes.

(5)        The Military Government may revoke a statutory right of occupancy on the ground of –

(a)       a breach of any of the provisions which a certificate of occupancy is by section 10 deemed to contain;

(b)       a breach of any term contained in the certificate of occupancy or in any special contract made under section 8;

(c)        a refusal or neglect to accept and pay for a certificate which was issued in evidence of a right of occupancy but has been cancelled by the Military Governor under subsection (3)  of section 10.

(6)        The revocation of a right of occupancy shall be signified under the hand of a public officer duly authorised in that behalf by the Governor and notice thereof shall be given to the holder.

(7)        The title of the holder of a right of occupancy shall be extinguished on receipt by him or a notice given under subsection (5) or on such later date as may be stated in the notice.

 

29. 29.    (1) If a right of occupancy is revoked for the cause set out in paragraph (b) of subsection (2) of

section 28 or (c) of subsection (3) of the same section, the holder and the occupier shall be entitled to compensation for the value at the date of revocation of their unexhausted improvements.

(2)        If a right of occupancy is revoked for the cause set out in paragraph (c) of subsection (2) of section 28 or in paragraph (b) of subsection (3) of the same section the holder and the        occupier shall be entitled to compensation under the appropriate provisions of the Minerals        Act or the Mineral Oils Act or any legislation replacing the same.

(3)        If the holder or the occupier entitled to compensation under this section is a community the Governor may direct that any compensation payable to it shall be paid –

(a)       to the community; or

(b)       to the chief or leader of the community to be disposed of by him for the benefit of the community in accordance with the applicable customary law; or

(c)        into some fund specified by the Governor for the purpose of being utilised or applied for the benefit of the community.

(4)        Compensation under subsection (1) of this section shall be, as respects –

(a)       the land, for an amount equal to the rent, if any, paid by the occupier during the year in which the right of occupancy was revoked;

(b)       building, installation or improvements thereon, for the amount of the replacement cost of the building, installation or improvement, that is to say, such cost as may be assessed on the basis of the prescribed method of assessment as determined by the appropriate officer less any depreciation, together with interest at the bank rate for delayed payment of compensation and in respect of any improvement in the nature of reclamation works, being such cost thereof as may be substantiated by documentary evidence and proof to the satisfaction of the appropriate officer;

(c)        crops on land apart from any building, installation or improvement thereon, for an amount equal to the value a prescribed and determined by the appropriate officer.

(5)        Where the land in respect of which a right of occupancy has been revoked forms part of a larger area the compensation payable shall be computed as in subsection (4) (a) above less a proportionate amount calculated in relation to that part of the area not affected by the revocation but of which the portion revoked forms a part and any interest payable shall be assessed and computed in like manner.

(6)      Where there is any building, installation or improvement or crops on the land to which subsection (5)

applies, then compensation shall be computed as specified hereunder, that is a respects –

(a)       such land, on the basis specified in that subsection;

(b)       any building, installation or improvement or crops thereon (or any combination or two or all of those things) on the basis specified in that subsection and subsection (4) above, or so much of those provisions as are applicable, and any interest payable under those provisions shall be computed in like manner.

(7)        For the purposes of this section, “installation” means any mechanical apparatus set up or put in position for use or materials set up in or on land or other equipment, but excludes any fixture in or on any building.

30. Where there arises any dispute as to the amount of compensation calculated in accordance with the provisions of section 29, such dispute shall be referred to the appropriate Land Use and Allocation Committee.

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Lanre Karim

Tel: +2348056709251, +2348123394167