Why Government Does Not Pay Land Compensation.

Daily Law Tips (Tip 693) by Onyekachi Umah, Esq., LL.M, ACIArb(UK)

 Introduction: 

You probably must have heard of the ugly stories of citizens that lost their land to government without any compensation or with just a very little compensation. Most government acquisition of land end in courts and most of the time, the government emerge successful. The reason behind this reality will be revealed in this work. So, this work focuses on the reason government does not pay any compensation over land where government takes over any land from any person in Nigeria. 

The Nigerian Law Of Land:

Land is a dependable asset that continues to appreciate. In Nigeria, there is a federal law that governs all the land in Nigeria and that law is the Land Use Act. The Land Use Act is 42 years, having been made since 29 March 1978. By that law, all the land in Nigeria belong to the respective governors of the states in Nigeria. 

So, in each state in Nigeria, the governor of the state owns all the land in the state but not for himself but for the common good and benefit of all Nigerians. Governors hold land in their states in trust for Nigerians. In any state in Nigeria, any land occupied by the federal government of Nigeria is deemed to belong to the federal government of Nigeria and no state government has right over such land in his state. 

No person, dead or alive, individual or company, group or community in Nigeria owns any land in Nigeria. Rather, where a state government grants any land to any person in Nigeria, the person is a mere occupier and not an owner, since the real owner of a land is the governor of the state, where the land is located. 

Hence, government offers only “Certificate of Occupancy” for a certain period of time (often for 99 years) and not a “Certificate of Ownership”. Also, since an occupier is a tenant and a tenant is to pay rent to his landlord, so do land occupiers in Nigeria pay ground rent to government every year. 

Can A Man Steal His Own Property?

An owner of a property cannot steal his own property from himself. This is the logic behind the power of government to take back or take over (compulsory acquisition) of any land in Nigeria. Since all land occupiers in Nigeria are mere tenants of the government, all that a government owes a land occupier (especially where the land occupier has genuine title documents like certificate of occupancy and long customary title), is a notice of government’s intention to acquire/takeover its land and all other procedures must be followed by government. 

If there is any development on the land, government must assess the value of the development on the land and pay the value to the land occupier as a compensation. Hence, government does not pay compensation on land but pays compensation on developments on land. 

Government pays compensation over development made on land and not over bare, empty and undeveloped land. Development on land includes; rent of the present year, improvements, installation and developments you made on such land like economic trees, buildings, dams and other immovable attachments. 

If man purchases a land from government or from any land seller or developer at the cost of N5 Million Naira and after 3 years the same land appreciates to N20 million Naira and the man now builds a house worth N2 million Naira on the land, how much compensation can the man receive from government, where government seeks to takeover such land? Where government takes over the land, government is expected to pay for the value of the house on the land, which is N2 Million Naira. Government is not expected to pay any compensation for the value of the land, since all land belongs government and government cannot compensate any person for government’s own property. 

Conclusion & Recommendation:

Land is a highly regulated property in Nigeria. Government decides how land is managed and occupied in Nigeria. Since all land in Nigeria belongs to government, government can only grant tenancy to Nigerians, foreigners and any person for a specific duration. Government issues only certificate of occupancy and not certificate of ownership. 

As expected, government receives rent from all land occupiers in the form of annual ground rent and failure to pay such can cause government to revoke a certificate of occupancy. Government also regulates all sales, transactions and deals on land. Until government consents to a land transaction, the land transaction is incomplete and it does not matter if payment was made and agreements were signed. 

Government being the owner of all land in Nigeria, government can also take back its land but must give adequate notice to the occupier of the land. Also, where there is a development/improvement on a land, government must pay compensation for such development. Government does not pay compensation on land but pays compensation on developments (improvements) on land. 

It is advisable that land occupiers ensure they have genuine land title documents from government to ensure that government will attend to their request for compensation. Also, avoid leaving any land empty and undeveloped, the planting of economic trees on land is enough development on the land and will be compensated by government. 

My authorities, are:

1. Sections 1, 2, 3, Sections 43, 44, 45, 318 and 319 of the Constitution of Federal Republic of Nigeria, 1999.
2. Sections 1, 5, 8, 9, 10, 11, 12, 21, 22, 23, 26, 28, 29, 33, 38, 39, 42, 43, 44, 47,  51, 52,  of the Land Use Act, 1978
3. The Judgement of the Supreme Court (nature, procedure, condition and duty of court and government to government acquisition of land) in the case of PROVOST LAGOS STATE COLLEGE OF EDUCATION & ORS v. EDUN & ORS (2004) LPELR-2929(SC)
4. Judgment of the Supreme Court (government’s right to acquire and the payment of compensation on compulsorily acquired land) in the case of ELF PETROLEUM v. UMAH & ORS (2018) LPELR-43600(SC)
5. Onyekachi Umah, “Legality Of Government’s Compulsory Acquisition Of Land And Payment Of Compensation” (LearnNigerianLaws.com, 10 March 2016) <https://learnnigerianlaws.com/legality-of-government-s-compulsory-acquisition-of-land-and-payment-of-compensation/ > accessed 9 November 2020
6. Onyekachi Umah, “When Properties Can Be Demolished Without Compensation In Any Part of Nigeria.” (LearnNigerianLaws.com, 16 May 2019) <https://learnnigerianlaws.com/when-properties-can-be-demolished-without-compensation-in-any-part-of-nigeria-daily-law-tips-tip-332-by-onyekachi-umah-esq-llm-aciarb-uk/ > accessed 9 November 2020.
7. Onyekachi Umah, “Does The New Law Allow Payment Of Compensation, When Land Is Taken For Custodial Centers (Prisons) In Nigeria.” (LearnNigerianLaws.com, 20 January 2020) <https://learnnigerianlaws.com/does-the-new-law-allow-payment-of-compensation-when-land-is-taken-for-custodial-centers-prisons-in-nigeria-daily-law-tips-tip-486-by-onyekachi-umah-esq-llm-aciarbuk/ > accessed 9 November 2020
8. Onyekachi Umah, ““Government Cannot Pay Compensation For An Empty Land After A Compulsory Acquistion” (LearnNigerianLaws.com, 18 August 2018) <https://learnnigerianlaws.com/daily-law-tips-by-onyekachi-umah-esq-tip-166-government-cannot-pay-compensation-for-an-empty-land-after-a-compulsory-acquistion/ > accessed 9 November 2020. 

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