25 Real Estate Terms You Should Know

  Real estate, like every other industry, has its unique set of terms used by its professionals to refer to various objects and processes of the trade. You are almost certainly familiar with some. For instance, you know that the word ‘property’ means land or building. And you’re aware that a landlord is a person who owns property in this sense. But what about the myriad of other words and phrases thrown about when real estate is discussed?

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In this article, we’ll explain 25 terms that are quite regularly used in Nigeria’s real estate industry. Knowing what they mean could help you understand the space more, so you’ll navigate and talk around it with greater confidence. Here they are:

Realtor

A realtor is an industry professional who represents sellers and buyers in real estate transactions and engages the other party or their representative in the process of purchasing or selling property.

Lease

This is an agreement between a landlord and a tenant that allows the tenant to rent the landlord’s property for a given period, in exchange for regular payments to the landlord.

Property Listings

A list of real estate property that’s available for sale or rent. Typically, a listing exists on a dedicated website, or traditional print media (newspapers and magazines). These days, the term usually refers to the former.

Deed of Assignment

A contract between a landlord and a buyer serves as evidence that the right to ownership of land held by the former has been transferred to the latter.

Residential Real Estate

Property used for residential purposes (dwelling), such as flats and bungalows.

Commercial Real Estate

Property used for commercial purposes, including office blocks, shops, and mall spaces.

Industrial Real Estate

Property used for industrial purposes, such as factories, warehouses, and data centres

Appraisal

The process of determining the fair market value of a property is usually carried out for a sale or obtaining a mortgage.

Tenement Rates

Charges imposed on buildings by Local Governments in Nigeria are calculated as a percentage of the value of the property. Proceeds are used to finance government public services.

Land Use Tax

Is tax imposed by the government on property used for commercial or industrial purposes?

Capital Gains Tax

Tax exacted from property owners only when they sell their property. It is calculated as a percentage of the value of the property at the time of its sale.

Development Levy

This fee is paid to the government for the development of a location.

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Agency Fee

Is paid to a real estate agent for their services, usually after they have facilitated a successful transaction.

Zoning

This refers to existing local laws or regulations concerning how property can (or cannot) be used in certain locations.

Real Estate Speculation

Treating property (such as land and housing) as market investment by buying to hold and (then) selling for maximum profit.

Gazette

An official record book of the government which shows land retained by the government for public use, and those given to local communities or real estate companies.

Land Excision

A means via which the government releases land to local communities (whether indigenes or settlers) through processes recognized by law.

Land Title

This is a legal document that proves ownership of land or other kind of property. Land titles are usually obtained by a property buyer when they purchase the property.

Certificate of Occupancy (C of O)

Document issued by the state government conferring ownership of land to a person, group of persons, or corporate organization. It is the most important title document in Nigerian real estate.

Governor’s Consent

A document showing the state government’s approval of the transfer of property ownership from a seller to a buyer. It is issued on land that already has a C of O.

Land Purchase Receipt

Shows proof of payment for the purchase of land.

Freehold

Land ownership has no limitations or conditions. Owners of freehold land can use their land for any purpose and transfer it as they wish. This status is usually backed by a Freehold land title.

Registered Survey Plan

Is prepared by a licensed surveyor, and contains vital details about a land, including its boundaries, property measurement, physical features, and whether it is free from government acquisition.

Mortgage

A loan is taken by a borrower from a financial institution (lender) to purchase or improve property.

Land Use Act

This is a Nigerian law that regulates the ownership and use of land in the country. It was introduced in 1978.

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Final Words

This list isn’t an exhaustive dictionary for the Nigerian real estate industry. But it’s a useful primer, one that will make it much easier for you to grasp various concepts, transactions, and policies within this domain.

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Got a suggestion? Contact us: editor@connectnigeria.com

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This article was first published on 24th January 2024 and updated on January 29th, 2024 at 10:06 am

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