Compulsory Acquisition

The practical sequence for a holder is notice, valuation, compensation and, where necessary, challenge.

Notice of revocation is served, stating the ground.

Compensation is then assessed. Under the Act it is directed at the value of unexhausted improvements on the land, the crops on it where relevant, and in the case of a statutory right of occupancy, the value of improvements at the date of revocation. The treatment of bare land differs from the treatment of what has been built on it, which is why holders of undeveloped land frequently receive far less than they expected.

A holder who considers the revocation improper has grounds to challenge. Revocation for a purpose outside those the Act permits, revocation without proper notice, or revocation in substance to transfer the land to a private party rather than for a public purpose, have all been the subject of Nigerian litigation, and courts have set revocations aside where the procedure or the purpose was defective.

Compensation disputes are separate and common. Where a holder disputes the assessment, the Act and the applicable state procedures provide for the question to be addressed, and independent valuation evidence is what the argument turns on.

The practical significance for buyers comes before any revocation happens.

Land within an existing government acquisition is the single most common defect Nigerian buyers walk into. A parcel that lies inside a committed acquisition may be unusable regardless of what the seller holds, and the buyer discovers it when a building plan application is refused or when demolition notices appear.

That is why the Surveyor General search matters as much as the lands registry search. The Surveyor General search tells you whether the coordinates fall within an acquisition, and the colour conventions on survey plans, with red commonly indicating acquisition and violet commonly indicating excision or commitment in some states, are a signal to investigate rather than a conclusion.

Excision is the mechanism by which land is released from an acquisition back to a community, and a gazette records it. Buyers of land in areas affected by acquisition should ask for the excision and gazette documents, and verify them, rather than accepting an assurance that the land was excised.

For a holder facing revocation, the practical steps are to obtain the notice and check the stated ground, take independent valuation advice on the compensation offered, and take legal advice quickly, because challenges to administrative action carry short time limits.

And for developed land, keep records of what was built and what it cost, because compensation is directed at improvements and a holder who cannot evidence them is arguing without support.

Three related mechanisms under the Land Use Act framework, with different consequences.

Revocation for overriding public interest is the state taking land back because it is required for a public purpose or for mining or pipeline purposes. Compensation is payable.

Revocation for breach of the terms of the right of occupancy is different in character. Where a holder has breached the conditions of the grant, including by failing to pay ground rent or by using the land contrary to the terms, the right can be revoked, and the compensation position is not the same.

Excision is the reverse. It is the release of land from a government acquisition back to the community, recorded in a gazette, and it is what makes land in a previously acquired area capable of being dealt with.

A buyer should establish, before paying, whether the land is within an acquisition, whether it has been excised, and whether the excision is evidenced by a gazette they have actually seen.

Compensation under the framework is directed at improvements and crops rather than at open market value of the land itself in the way holders often expect, and holders of undeveloped land are frequently disappointed.

Assessment and payment can also be slow, and holders have waited years.

Challenging a revocation is subject to short time limits for administrative challenges, and a holder who spends months in correspondence may lose the opportunity.

And the practical difficulty of resisting the state is real. A holder with a strong legal position still faces a lengthy process against a well resourced respondent.