Legal Fees for Real Estate in Nigeria

Legal fees are another set of costs added to a property’s budget in Nigeria. The purchase price is not usually all you will spend to acquire the property. So, regardless of finding a property in a strategic location, with good interior and a price that fits your budget, you must ensure you do due diligence by letting the experts in the law ascertain the legal standing of the property before you go ahead to purchase it. And of course, these law experts will have to be paid for the meticulous services rendered. The law experts are responsible for drafting and reviewing the lease agreement and ensuring that the document protects both parties involved.

Buyers must understand that these fees are not optional and are standard rental transactions, especially in real estate in Nigeria. In fact, if you are looking to buy land or a house in Owerri, you might have noticed a major shift in how legal transactions are handled. The days of "haggling" with a lawyer to reduce their fee for a Deed of Assignment are officially over. This article will show the correct estimated budget for buying a property.

NBA, Owerri Branch Remuneration Order

The Nigerian Bar Association (NBA), Owerri Branch, has activated a strict enforcement mechanism for the 2023 Remuneration Order. This new system is not just for lawyers to know, it is also for you to know as a buyer/investor. These newly implemented Legal Remuneration Order will directly affect how to budget for a property, how much you pay, how you pay it, and how you secure your property ownership.

The Professional fee of 10%:

In the past, buyers negotiated legal fees down to 2% or 5%. However, under these new rules, Owerri falls into a specific economic band where the standard professional fee for property transactions is 10% of whatever the property value is. This 10% is for the lawyer’s brain work, e.g title search, drafting and legal protection. This does not include external costs like stamp duties, land registry registration fees, the Governor’s consent and other payments at the ministry. The NBA has made this fee non-negotiable. Nothing more, nothing less. If a lawyer agrees to take less, they risk losing their license. And if they try to charge more, this article has well informed you, so you cannot get duped.

Payment method

To ensure transparency, the Owerri Branch now requires that legal remuneration should be remitted to a designated NBA Owerri Branch account. When you pay the agreed amount to the NBA account, your lawyer verifies the payment at the NBA office. Immediately that is done, your lawyer swings into action. The NBA vets the document of your property, if everything is okay as it should be, it is then signed and sealed.

Why this matters for you as a buyer

Knowing this new legal remuneration order will help you draft a correct budget asides the cost of the property. It may seem inconveniencing to pay for extra legal fees, but this is the best route to take if you want safety, security and peace of mind. When you pay the standard legal fees, the lawyer is bound to ensure you don’t face disputes with your property years later. Once you have settled the professional fees, all legal documents and drafts produced in the course of the transaction belong to you, the client.

Real Cost of buying property in Nigeria

At Realvista properties, we hate being taken unawares as much as you do. As a result, we have compiled an estimate of the payments required before a property can be fully transferred to you. This is the real cost of buying property in Nigeria.

Professional/Legal Fee – 10% of property value to be paid to the property lawyer

Without legal representation, you might risk getting a bad deal which will cost you money, time and peace. To avoid that, pay the legal fees and get a good lawyer involved in your transaction.

Agency Fee – 5% of property value to be paid to the referrer

If you refuse to pay the agency fee, the agent may refuse to provide further assistance, leaving you stranded in the buying process. This is disadvantageous because people will capitalize on your ignorance as a novice.

Survey fee – price varies based on location

This helps you purchase land that is accurate on the field as it is written on paper. It also helps you know your boundary enough and not to encroach into someone else’s property.

Stamp duty – 1.5% of property value

Without this, your property transaction is not recognised by the government which can make it difficult to prove the ownership or sell the property in future.

Registration fee – 5% of property value

Registration fees record that you are indeed the owner of a property.

Capital gain tax – 10% of the profit

Ensure you pay your tax as at when due. Capital gain tax is one of them, usually paid after you’ve sold a property.

Development fee

The neighbourhood in which your property is located may charge development fees. Understand that this is to help you get access to essentials like electricity, water, security, and good road.

Real estate in Nigeria requires a well-developed budget especially for first-timer buyers. These various fees must not be left unpaid. Realvista properties can plug you to affordable verified listed properties, that fit into an ideal first-time buyer’s budget, so you can comfortably foot the extra costs.