By Funmilayo Olagunju
Caveat Emptor is a Latin phrase that translates “let the buyer beware”. It is a principle that places the burden of due diligence upon a prospective buyer (especially in real estate transaction). A prospective buyer is expected to make thorough findings before purchase.
The principle is not without an exemption as it is not applicable in the case of fraud and express warranties.
“Caveat emptor, let the buyer beware, is the Latin maxim for persons dealing in property. The risk of encumbrances is on a purchaser who must satisfy himself by a full investigation of title before completing his purchase. A purchaser would be able to plead absence of notice only if he had made all the usual and proper inquiries and still found nothing to indicate the equitable interest.” Per JUMMAI HANNATU SANKEY, JCA (Pp 73 – 73 Paras C – E)
YARO v. MANU & ANOR (2014) LPELR-24181(CA).
In a recent judgement, the Court emphasized the importance of due diligence before acquisition of property. The purchase and development of a property from a party without title is an exercise in futility. See the case of
INFINITY TRUST SAVING & LOANS LTD & ANOR v. EL-LADAN & ANOR
“Now this is one of those cases that bring to the fore and continues to reinforce the land law principle well settled over hundreds of years ago that a buyer must beware ‘caveat emptor’ in order to avoid the unpleasant consequences of buying nothing but a law suit and an empty worthless document of title incapable of vesting on the buyer any known right, whether legal or equitable, on the land the subject matter of such bogus purchase.
This case graphically and strongly illustrates the fool hardiness of a party who rushes, dabbles and stumbles into land transaction and even before obtaining a valid or proper or even equitable title thereto, rushes ahead with the construction of a building or structure on the land in dispute. Now, if it turns out tomorrow, as it would sooner or later, that he had bought nothing from his alleged vendors, the 2nd Appellant, then by the operation of the very old land law maxim of ‘quid quid platatur solo solo cedit’ – meaning whatever is affixed to the land belongs to the owner of the land, he may end up losing not only the money used in buying and obtaining his invalid title to the land but also the investment on the building. A word should be enough for the prudent and wise buyers of land to look very well and deeply before they leap into buying land! I say no more.”
Per BIOBELE ABRAHAM GEORGEWILL, JCA (Pp 55 – 56 Paras B – C).
It is not a safe practice to invest in real estate without prior due diligence. A search in the State/Federal Land Registry would reveal any registered encumbrance on the land. A search in the Court Registry would reveal if the property is subject to pending litigation. Verification of title documents, physical inspection and confirmation of technical details are equally essential.
The excitement of finding a good offer or lack of willingness to sponsor professional due diligence has regrettably ruined the investment of many people.
“Desire without knowledge is not good — how much more will hasty feet miss the way!”
Proverbs 19:2 (NIV).