Property by definition means anything that is capable of being owned. This is according to American Heritage Dictionary. The Dictionary also defined property as something not being owned alone but also includes the bundle of rights that come along with ownership. We can go further by saying a vessel is a property, likewise a car, jewelries, aircrafts, weapons, land etc since they are assets that are capable of being owned. The other part of the definition centers around bundle of rights as they are equally important as part of ownership. You can own an asset but may not have rights over it solely/independently, especially if it pertains to joint or multiple ownerships. Hence, rights exercisable are of equal importance as ownership

This article will focus of Real Estate (Real Property) defining what it is, giving examples of different aspects of Real Estate that can be developed within the confinement of the law and lastly highlight things to know/do before embarking on a development.

What is Real Estate: According to investopedia, Real Estate has to do with any property related to Land and buildings, as well as the natural resources of the land, including uncultivated flora and fauna, farmed crops and livestock, water and mineral deposits. Invariably real estate or real property is different from other kind of properties like personal properties that can include tangible and intangible assets.

Intangible assets comprises stocks/shares, bonds and other investments that you have and know they exist somewhere but you may not be able to physically hold them by hands. Tangibles assets capable of being owned includes computers, furniture and clothes, as well as fixtures like a dishwasher, even if you are renting a home (provided you bought and installed it with the lessor’s permission). Notwithstanding, personal properties are still properties but are different from real estate property.

Real Estate property is connected with land and anything in, on, over and underneath the land, not forgetting the rights to be able to use these benefits attached to the land. A tenant or leaseholder may have rented land or buildings that are considered a part of their personal estate, but are not considered real estate, especially if such leases are lesser than 20 years. Renting a detached house as a tenant from the landlord within an exclusive fenced curtilage for a term lesser than 10 years does not constitute real estate. The rights exercisable in such case are restricted under the tenancy/lease agreement, especially when it pertains to alienation



Having defined Real Estate, it is important to know what Real Estate development is. Real Estate development entails the business process of dealing in real estate by renting a building, acquiring a land and erecting a building on it, to buying of land and selling it. In clear terms, buying of luxury cars such as 2019 Bentley Bentayga V8, or aircrafts like Gulfstream G650 and Bombardier Global Jets or vessels like Azzam and Motor Yatch A all constitute assets to be included in the portfolio, but not real estate

Real Estate development also entails the processes involved and the actual development. For instance the process of developing real property can be instituted by one person and completed by another. This kind of arrangement can either be under Joint Venture of Build Operate and Transfer. In the case of Joint Venture, one party’s equity may be the land, whilst the other provides the funds and supervision of the development, thereafter profit is shared in line with agreement. As regard Build Operate and Transfer, the developer will source for the fund and in return he/she is allowed certain years (minimum is always about 10 years) to receive proceeds of the rent, before yielding the property back to the land owner in perpetuity.

Types of Real Estate development

Real Estate development can be divided into different categories. We are focusing of two types in this article, which are residential real estate development and commercial real estate development


Residential Real Estate is development purpose built to serve as habitat for residence or a home to live in.  The aim of the developer is for the building to be erected to serve as a shelter for a single family or multifamily structure to reside not as a business centre.

Examples include


Covers development purpose built for use as business concern or for commerce, other than for the use as a family dwelling. Although warehouses and factory can be grouped under industrial real estate, however, the fact that they serve purposes for business order than a dwelling accommodation, they can still be grouped under commercial real estate



Investing in real estate development is somehow complex and different from other forms of assets. For instance by sitting behind your Laptop and browsing, one can simply place an order for 2019 Bentley Bentayga V8, or Gulfstream G650 and Bombardier Global Jets or motor Yatch A, likewise monitoring the stock market and buying shares, or studying the Treasury Bill market. Real estate is completely different. It involves the process of having a need, identifying a suitable location, investigating thoroughly before making payment. That is if the funds are readily available and there is no need to seek external funding, which requires a lot of report writing and risk assessment, which could take several months.


WHY DO I NEED TO INVEST IN REAL ESTATE: There are many reasons for owning real estate asset. Some reasons include prestige, increase in cash flow, owning a home when tired of being a tenant, portfolio diversification etc


Upon establishing the reason for owing a real estate asset, the next thing that should be considered is the location. Real Estate market is heterogeneous and really localized. Market values in Ikoyi are different from that of Lekki. Market values of land in Parkview Estate in Ikoyi, is different from that of Banana Island in the same Ikoyi.

If you plan on a very low budget of between N5million to N10million, you should be thinking about Ikorodu, Oworonshoki, Okokomaiko, Ibeju Lekki and Epe etc

If you plan on a very high budget of between N150million to N200million or more, you should be thinking about Ikeja Gra, Ogudu Gra, Magodo GRA, Ikoyi and Lekki etc

Lagos has 20 local governments with 37 Local Council development Areas and over 3000 streets and districts. Property affordability is dependent on location.


After identifying a suitable location in consonance with your budget, determine the type of real estate you want to develop. You can buy a bareland and reserve as a speculator, purchase a land and develop a residential building or commercial building. In some cases, you can have mixed use (Residential and Commercial building) in same location subject to planning regulations.


The next step is to engage the services of trusted real estate professional or legal adviser to conduct a search on the title of the identified property. As earlier posited in this article, what you are buying in real estate is not only the physical asset but also the title/right. You can buy a very cheap property in a choice location in Lagos, unknowing to you there are restrictions on the title or encumbrances. Land may be under government acquisition and some acquisitions are non ratifiable.  In that case, you have bought nothing.


In line with the chronological arrangement of to do list, four stages have been considered so far. Even if the location is good, price is affordable and title is good, there is need to enquire from the town planning authority if what you intend to develop is approvable. For instance, you cannot have a high-rise building within proximity to airports, there are certain restrictions of developing Gas Stations, there is what is called zoning in which certain areas are designated for residential developments only, hence your commercial development would not be approved in other zones.

The intending developer must apply for Planning Information through the Ministry of Physical Planning and Urban development if property is located in Lagos. States across Nigeria have similar rules and laws on development control in place.


The next stage is to negotiate with the rightful owner or his/her representative and purchase the property. After observing due diligence, there is still need to apply caution before making payment. Ensure payment is made to the person who possesses such right or powers to sell. Some property owners are restricted from selling properties by law. Example is a situation of multiple owners of a property or family property. An individual whose name appears in the title as part of the owners cannot sell the property singlehandedly without the consent of other co owners. Engage a professional in order to be guided.


One important step to take immediately after making payment for a landed property is to take immediate physical possession. Taking physical possession can be inform of fencing and fixing a gate(in situation where property is a bareland) erecting temporary structure(s) on the site whilst not ready to develop same or allow the site to be occupied by security personnel, all in a bid to deter trespassers from the property. On some Government allocations, allottees are warned to take immediate possession and develop shortly after allocation or risk revocation by the government, as upon confirmation of allocation, land owners are expected to pay annually to the government certain fees and dues in form of taxes and development levy.


Once physical possession has been taken, the developer should start thinking of erecting the desired structure he/she has in mind before purchasing the land. Irrespective of the kind of development envisaged, the developer must prepare an architectural drawing(s) of what the development would look like and same would be submitted to the Ministry of Physical planning and Urban development in the state where the property is domiciled. In Lagos State, such submission is made to Lagos State Physical Planning Permit Authority, LASPPPA which is an MDA under the Ministry of Physical planning and Urban development. The agency would scrutinize the submission, conduct site inspection and do the needful before granting development permit or otherwise.


Title registration is another important aspect of real estate development. As posited, real estate ownership entails bundles of right and such rights is not limited to being in possession only, but being empowered by a valid title document so as to be able to claim ownership.

Land title is a bundle of rights exercisable over a piece of property. It is essential upon acquisition or transfer of interest/rights in a property from one party to the other, that the beneficiary registers his/her interest. The benefits include a reduced or no boundary disputes, increased market value, greater opportunities and access to credit

This article is merely introductory to the numerous activities and processes involved in real estate development, as there are more to it and these. It is in the interest of potential developer to engage the services of professionals that are well grounded with these processes in order to have a smooth entry into real estate development.

Ademola Ladega  (ANIVS, RSV MNIM, FIMC) is the managing partner of AOL Management Consult ( He is a highly experienced real estate consultant with field/practical experience spanning over 9 years, having previously worked at Ismail and Partners, where he contributed a great deal to the success of the firm and rose to the position of the Head of Valuation and Senior Associate 

Mr Ladega has extensive experience of providing valuation services in Nigeria to large public and private companies in many sectors including utilities, banking, insurance, financial services, agro-industrial, shipping, commercial and trading sectors. As well as experience in reporting in accordance with the regulatory requirements of Nigeria, in full compliance with IFRS, RICS, and IVS

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