When buying a land, especially from a real estate company, some of the things you’d be asked to pay for, are land statutory charges and development levy. And I have met many people who wonder:
What are these charges?
Why should I pay for them? Are they important? Is the company only trying to cheat me? and so on.
But good enough, these kind of questions are what I intend clarifying in this content. In other words, this article would be providing important information you need to know about land statutory charges and estate development levy.
Land statutory charges
When buying a piece of land, there are two land statutory charges you might be asked to pay for:
Deed of Sales/Assignment fee and Survey fee.
At times, there would be other charges, but these two are the most popular.
Deed of Sales/Assignment fee
When you buy a land, to be able to claim legal ownership to it, you’d need more than just a receipt of payment.
One of the documents you’d also need is a document called Deed of Sales/Assignment. A Deed of Sales/Assignment is a legal document that shows the seller of a land has transferred ownership of that land to the new buyer.
Without this document, it would be difficult to claim legal ownership to the land. In short, the Deed of Sales/Assignment fee is a very important fee, and you shouldn’t try to avoid it.
- The Deed of Sales/Assignment is a legal document that should be issued to you, by the seller of the land. In other words, you shouldn’t try to create it yourself, in order to save money.
- A Deed of Sales/Assignment usually contains information like the amount the land was sold for, the coordinates and size of the land, the name and contact info of the seller, the name and contact info of the buyers, etc.
- A good Deed of Sales/Assignment should also include room for the state Governor’s consent.
For those who don’t understand what a state Governor’s consent is, you should read my article about Land titles in Nigeria. But let me quickly state that Governor’s consent is a kind of approval from the state Governor, to the purchase of a land. A Deed of Sales/Assignment without a Governor’s consent is not so useful in the court. In other words, you should probably reject a Deed of Sales/Assignment not leaving the room for a Governor’s consent.
Survey fee is another fee you’re probably going to be asked to pay for.
Actually, some real estate companies would make it mandatory, but it’s not mandatory. However, refusal to do the survey of a land is not a wise thing. In other words, even though you might be able to avoid paying for it, you shouldn’t.
When you buy a piece of land, there are so many wrong information the seller can provide you. The seller can sell you pieces of land that shouldn’t be sold. The seller can show you a piece of land and claim it to be large than it actually is. And if you wouldn’t like to be a victim of this kind of dubious acts, you’d need a surveyor.
A surveyor is a professional who helps analyze pieces of land.
By analyzing a land you’re trying to buy, a survey can help point out loopholes.
For instance, there are times when people are sold lands that are meant to be used as roads. In other words, many years after they must have built their houses on the lands, they then receive letters from the government telling them their houses have to be demolished, as they are built on lands meant to be used for roads.
However, if you hire a surveyor, you can be guaranteed things like this would never happen.
In short, survey fee is not a scam. And it’s in your own best interest to pay it. These days, the survey fees paid when buying lands from real estate companies isn’t much. In other words, you shouldn’t have a reason to avoid paying for survey.
Estate development levy
When buying a piece of land in an estate, one of the fees you might also be asked to pay is an estate development levy. In fact, hardly would you come across an estate that wouldn’t ask for this fee.
But what is it? And is it a scam?
First and foremost, estate development fee is hardly a scam.
When trying to buy land in an estate, you’d often hear things like: paved roads would be provided, the estate is fenced and has gates, the estate has security personnel and cameras, there’s portable water, etc. Well, all these things cost money, and that’s what your estate development levy is meant for.
In short, as the name implies an estate development levy is a fee meant for the development of an estate.
The estate development fee would vary from one estate to another. You might see an estate charging N300,000 for estate development, and you can see some charging as much as N3 million. And while it might seem like a N3 million fee is a scam, it isn’t always. The development fee you’d be asked to pay, would correspond to what kind of things would be provided in the estates.
You should, however, note that most times, your seller wouldn’t make it mandatory for you to pay this fee immediately.
They would often allow you to pay the estate development levy for over a duration as high as 30 months. In other words, it’s possible you’d be allowed to pay the development levy in a convenient way.
So to conclude this content, Deed of Sales/Assignment fee, survey fee, and estate development levy are all fees you should pay. They are not scams and you shouldn’t try to avoid them.