Conducting due diligence is a critical step in the process of purchasing a property in Nigeria. It involves a comprehensive investigation and verification of the property’s legal, financial, and physical aspects to ensure that the investment is secure and free from potential risks or issues. In this article, we will provide essential tips for conducting due diligence on a property in Nigeria, empowering buyers to make informed decisions and safeguard their real estate investments.

Verify Property Ownership and Title

Begin the due diligence process by verifying the property’s ownership and title. Engage a qualified lawyer to conduct a thorough search at the appropriate land registry to confirm the seller’s legal ownership. Ensure that the title is clear, marketable, and free from any encumbrances, liens, or disputes.

Inspect Physical Condition

Physically inspect the property to assess its condition and any potential defects. Examine the structural integrity, plumbing, electrical systems, and any visible signs of damage or disrepair. Engage professionals such as engineers and architects if necessary, to provide a detailed assessment of the property’s physical condition.

Review Development Approvals

Check whether the property has obtained the necessary development approvals and permits from the relevant government authorities. Unauthorized or non-compliant constructions can lead to legal complications and potential demolition orders.

Confirm Boundary and Survey Plans

Verify the property’s boundary and survey plans to ensure that the physical boundaries align with the title deeds. This step helps prevent boundary disputes with neighboring properties in the future.

Assess Financial and Tax Obligations

Examine the property’s financial records, including outstanding taxes, utility bills, and any existing mortgages or loans. Verify that the seller is up-to-date with tax payments and there are no financial liabilities associated with the property.

Investigate Environmental Concerns

If the property is in an industrial or potentially hazardous area, investigate any environmental concerns that may impact its value or future development potential. Conduct an environmental assessment, if required, to identify potential risks.

Check Zoning and Land-Use Regulations

Ensure that the property complies with local zoning and land-use regulations. Review the applicable urban planning laws to ascertain whether the property’s current or intended use aligns with the zoning requirements.

Review Existing Tenancy Agreements

If the property is being sold with existing tenants, review their tenancy agreements to understand the terms and conditions. Confirm that the seller has disclosed all tenancy-related information, including security deposits and rental arrears.

Investigate Neighborhood and Infrastructure

Study the neighborhood and infrastructure surrounding the property. Assess factors like proximity to schools, hospitals, public transportation, and commercial centers, as these can influence the property’s value and potential for rental income.

Seek Professional Assistance

Engaging professionals with expertise in real estate due diligence can be invaluable. Lawyers, real estate agents, property consultants, and surveyors can provide guidance and insights throughout the process, reducing the risk of oversight or oversight.

Conducting due diligence on a property in Nigeria is a crucial step in ensuring a secure and successful real estate investment. Verify property ownership and title, inspect the physical condition, review development approvals, and assess financial and tax obligations. Investigate environmental concerns, check zoning and land-use regulations, and review existing tenancy agreements. Investigate the neighborhood and infrastructure while seeking professional assistance to guide you through the due diligence process. By following these essential tips, buyers can make informed decisions and invest in properties with confidence, safeguarding their interests and avoiding potential pitfalls in the Nigerian real estate market.