The land tenure system in Nigeria presents a legally complex and commercially sensitive environment for large-scale real estate development. Ownership of land comes with the possibility of having disputes over such ownership, customary and family claims, and overriding government interests, which can make it uncertain and legally risky.[1] These risks become magnified in large-scale developments where projects span hundreds or thousands of hectares and involve multiple communities, governmental agencies, and private stakeholders.

For developers, lenders, institutional investors, and project counsel, legal due diligence is not merely a procedural step in land transactions but a strategic risk management mechanism that determines whether a project proceeds smoothly or collapses into years of litigation, compensation disputes, regulatory sanctions, or stalled financing.

Here is a dive into the land tenure risks in Nigeria and the due diligence mechanisms required to mitigate those risks in large-scale developments.

LAND TENURE FRAMEWORK IN NIGERIA

Understanding Nigeria’s land tenure system is fundamental to assessing land-related risks. The foundation of Nigeria’s land regime is the Land Use Act, which vests all land within each state in the Governor to hold in trust for the people.[2] Individuals and entities do not own land outright but acquire rights of occupancy, usually for 99 years, either through statutory grants or customary arrangements.[3]

Under the statutory system, individuals and entities typically acquire rights through a Certificate of Occupancy, government allocation, assignment, lease, or other legal instruments. However, in many parts of Nigeria, particularly in rural areas, land continues to be held and administered under customary law by families, communities, and traditional institutions. These customary interests are often undocumented.

Family disputes, competing inheritance claims, informal occupation, and unauthorized sales by community representatives frequently create uncertainty around ownership and title validity. In addition, government acquisition claims and inconsistent land records further complicate the verification process.

For investors, developers, lenders, and property owners, thorough due diligence and proper title verification are essential to mitigate legal and commercial risks associated with land transactions.

KEY LAND TENURE RISKS IN LARGE-SCALE DEVELOPMENTS

One of the most significant risks is a defective or disputed title. The party purporting to transfer land may lack the legal authority to do so, or the title documents may contain defects that undermine the validity of the transaction.

Family and customary claims also present considerable challenges.[4] Land held under customary tenure may require the consent of principal family members, community leaders or other stakeholders before a valid transfer can occur. Failure to obtain the necessary approvals can expose developers to disputes long after project commencement.

Boundary disputes constitute another common risk. Inaccurate surveys, overlapping survey plans, and encroachments frequently result in disagreements regarding the actual extent of land acquired.

Additionally, governmental interests may affect the viability of a development. Land may be subject to acquisition, urban planning restrictions, infrastructure corridors, environmental regulations, or revocation for overriding public purposes.

DUE DILIGENCE CONSIDERATIONS 

Effective legal due diligence requires a multi-layered investigation of the land. Large-scale developers are advised to conduct the following due diligence procedure prior to property acquisition[5]:

1)    Title Verification: The first step is title verification. Developers should review all title documents, including certificates of occupancy, deeds of assignment, and any prior instruments affecting the property. Particular attention should be paid to the chain of title to ensure that ownership has passed validly from one holder to another.

2)    Search at the Land Registries: Searches at the relevant land registry are equally important. These searches can reveal registered interests, encumbrances, mortgages, restrictive covenants, pending transactions, or other matters that may affect the property.

3)    Survey Verification: Survey verification is another critical component. Developers should confirm that the survey plan accurately reflects the physical location and dimensions of the land and that it does not overlap with adjoining properties or any government acquisitions.

4)    Physical Search: Where land is situated in areas governed by customary tenure arrangements, engagement with local communities, traditional authorities, and family representatives may be necessary to verify ownership claims and identify any unresolved disputes.

5)    Court Search: It is also prudent to investigate whether the property is the subject of any ongoing litigation or other administrative proceedings.

MITIGATING LAND TENURE RISKS AND PROTECTING INVESTMENTS IN LARGE-SCALE DEVELOPMENTS

Identifying risks is only one aspect of due diligence; developers must also implement measures to mitigate them, as below;

1)    Early engagement with legal advisers, surveyors, and land administration professionals can help identify potential issues before substantial resources are committed.[6] Where customary interests exist, developers should ensure that all relevant stakeholders are consulted and that any required consents are properly documented.

2)    Developers should also secure all necessary regulatory approvals and ensure compliance with planning, environmental, and land administration requirements. Failure to obtain required approvals may jeopardize both the project and the underlying land rights.

3)    Contractual safeguards can provide an additional layer of protection. Representations, warranties, indemnities, and conditions precedent in title transfer documents can help allocate risks and provide remedies if title defects emerge after completion.

4)    Most importantly, developers should resist the temptation to rush property acquisitions without conducting comprehensive investigations. The cost of rigorous due diligence is often insignificant compared to the financial consequences of acquiring problematic land.

CONCLUSION

Land tenure risks remain one of the most significant legal challenges facing large-scale developments in Nigeria. To mitigate these risks, comprehensive legal due diligence is essential to provide developers with a clearer understanding of these risks to enable them to make informed investment decisions.

Due diligence is not just a legal formality but an essential foundation for sustainable and successful development.

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[1] Grace Abraham Ahiakwo, ‘Due Diligence and Title Verification in Nigeria Land Transactions: Legal Principles and Practical Guidance’  https://www.researchgate.net/publication/401299871_Due_Diligence_and_Title_Verification_in_Nigeria_Land_Transactions_Legal_Principles_and_Practical_Guidance  Accessed June 2, 2026

[2] Section 1 of the Land Use Act, Cap L5, Laws of the Federation of Nigeria (LFN) 2004

[3] Section 5(1) & 6(1) of the Land Use Act Cap L5, Laws of the Federation of Nigeria (LFN) 2004

[4] Business Cardinal, ‘Land Use, Property Rights & Investment Risk: The Untold Issues’ https://businesscardinal.com/land-use-property-rights-investment-risk-nigeria/ Accessed June 4, 2026

[5] T.Barasua, Esq & P.C. Wireh, Esq., ‘Due Diligence In Land Transactions In Nigeria: Legal Issues, Challenges And Comparative Insights’ https://rsuppljournal.com.ng/journal/index.php/jppl/article/download/16/16/36   Accessed June 10, 2026

[6] Business Cardinal, ‘Land Use, Property Rights & Investment Risk: The Untold Issues’ https://businesscardinal.com/land-use-property-rights-investment-risk-nigeria/ Accessed June 4, 2026

Written by Adeife Omolumo for The Trusted Advisors

Email us: info@trustedadvisorslaw.com

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