What land use act means
The Land Use Act is the law that changed what owning land in Nigeria means.
Before 1978, land was held under a mix of customary and English derived systems. The Act swept that aside by vesting all land in each state in the Governor, to be held in trust and administered for the use and common benefit of Nigerians.
The practical result is that individuals hold a right of occupancy rather than absolute ownership. When somebody says they own land in Nigeria, what they hold is a right granted or deemed granted under this Act.
How it is used
The Act is the backdrop to every Nigerian land transaction, whether the parties realise it or not.
It is why the state issues Certificates of Occupancy, why transfers are made by deed of assignment rather than conveyance, and why Governor's consent is required before land held under a statutory title can be transferred. It is also why the state can revoke a right of occupancy for overriding public interest, subject to compensation.
Key features
- Vests all land in a state in the Governor, held in trust
- Creates statutory and customary rights of occupancy
- Requires Governor's consent for most transfers of statutory title
- Allows revocation for overriding public interest with compensation
- Gives rise to deemed grants for people already lawfully in occupation in 1978
How this works in Nigeria
Two sections come up constantly in practice. Section 21 and Section 22 deal with alienation, and Section 22 is the one people cite, because it is the requirement for Governor's consent before a holder of a statutory right of occupancy transfers it.
The Supreme Court has enforced that requirement firmly, including in Nkwocha v. Governor of Anambra State, and the consequence is that a transfer made without consent is exposed. Buyers who skip it have not bought what they think they bought.
Statutory vs customary right of occupancy
A statutory right of occupancy is granted by the Governor, usually evidenced by a Certificate of Occupancy, and it typically relates to urban land.
A customary right of occupancy arises under customary land tenure and is associated with local government areas and rural land. Communities and families hold land this way, which is why so many transactions on the outskirts of Nigerian cities involve family land, excision and gazettes rather than a C of O.
The two attract different processes and different risks, and a buyer needs to know which one they are dealing with before they start.
Limits and risks
The Act has been criticised for decades. It concentrates control in state governors, makes transfers slow and expensive through the consent process, and complicates using land as security for credit.
Reform proposals have circulated for years, including calls to remove the Act from the constitution so it can be amended more easily. None of that changes the position today, and buyers must work with the framework as it stands rather than as commentators wish it were.
Worth knowing
Because land is held on a term of years rather than owned outright, always check what remains on the term and whether ground rent obligations have been met.