A long lease can be one of the best property deals in Lagos. A landowner earns income without selling. A business secures a site for a school, filling station, warehouse or shopping plaza for decades, at a fraction of the cost of buying.

But a 25, 50 or 99-year lease is not an ordinary tenancy. It is a major property transaction. A badly drafted lease can tie up land for a lifetime, or leave the lessee with buildings it does not own when the term ends.

This guide explains what to check before you sign a long lease in Lagos, whether you are the landowner or the lessee.
What is a long lease?
A long lease grants the right to occupy and use land or a building for a long, fixed period, often 25 to 99 years. In return, the lessee pays an upfront premium, a yearly ground rent, or both.

Common uses include:

ground leases, where the lessee builds on bare land;
commercial leases for plazas, offices, warehouses and filling stations;
institutional leases for schools, hospitals and churches; and
long residential leases in estates and serviced developments.
Before you sign: verify the lessor’s title
A lessor can only lease what it owns. Before signing, the lessee should:

search the title at the Lagos State Lands Registry, to confirm ownership and any mortgages or caveats;
chart the land at the Office of the Surveyor-General, to confirm it is not under government acquisition or on a setback;
confirm who must sign. For family land, the family head and principal members must execute the lease. For a company, check its authority to sign.
check for a mortgage. If the land is mortgaged, the bank’s consent may be needed before it can be leased; and
check the lessor’s own lease. If the lessor holds the land on a lease itself, it cannot grant a lease longer than its own term.
The clauses that matter most
Clause
What to agree
Term
The start date, the length, and any option to renew
Premium and rent
Any upfront premium, the yearly rent, and when and how it is paid
Rent review
How often rent rises, by how much, and the formula or valuation method
Permitted use
What the land can be used for, and whether the use can change
Development
What the lessee may build, by when, and who obtains planning approvals
Repairs and insurance
Who maintains and insures the land and buildings
Rates and charges
Who pays land use charge, tenement rates and other levies
Assignment and subletting
Whether the lessee can transfer the lease or sublet, and on what conditions
Breach and forfeiture
What counts as a breach, notice to fix it, and when the lease can be ended
End of term
Who owns the buildings when the lease ends, and whether compensation is paid
Option to purchase
Whether the lessee can buy the freehold interest, and at what price
Disputes
Mediation, arbitration or court, and Lagos law as the governing law

For the lessee, the end-of-term clause is often the most important. Without clear terms, buildings worth hundreds of millions of naira may pass to the landowner at the end of the lease with no compensation.

For the landowner, the rent review clause is vital. A fixed rent agreed today will be worth far less in 20 years.
Governor’s consent and registration
Under section 22 of the Land Use Act 1978, the holder of a statutory right of occupancy cannot alienate it, including by sublease, without the Governor’s consent. A lease of land held under a Certificate of Occupancy is therefore generally subject to consent. A transaction that needs consent and does not obtain it can be void.

A long lease should also be made by deed, stamped and registered at the Lagos State Lands Registry. Registration protects the lessee against later buyers and lenders, and makes the lease far easier to use as security for a loan.
Red flags
The lessor cannot produce original title documents.
Only one family member is willing to sign for family land.
The draft lease is silent on what happens to buildings at the end of the term.
The rent review clause lets the landlord set any figure.
Pressure to pay the premium before the lease is signed.
Frequently asked questions
What is the longest lease allowed in Lagos? Leases of 99 years are common. A lessor cannot grant a lease longer than its own interest in the land, so a lessor holding a 99-year right cannot grant a longer lease.

Do I need Governor’s consent for a lease in Lagos? Where the land is held under a statutory right of occupancy, a lease or sublease is generally subject to the Governor’s consent under the Land Use Act. Your lawyer should confirm this for your transaction.

Who owns the building at the end of a long lease? It depends on the lease. Without a clear clause, buildings usually pass to the landowner. Agree ownership or compensation before you sign.

Can I sell or mortgage my long lease? Usually yes, if the lease allows assignment or charging, and with any required consents. A registered lease is far easier to sell or mortgage.

Can a landlord increase rent during a long lease? Only as the lease allows. That is why the rent review clause must be clear.

About Cardinal Counsel

Cardinal Counsel (Barristers & Solicitors) is a Lagos-based law firm advising individuals, families and businesses, at home and abroad, on property transactions, commercial agreements, regulatory compliance and dispute resolution. The firm conducts property searches and due diligence, drafts and reviews leases and sale agreements, and supports clients from verification to perfection of title.

This article is for general information only and does not constitute legal advice. Before you sign or grant a long lease, send the draft to Cardinal Counsel for review. Contact us at Suite D14, Adeniran Ogunsanya Mall, Surulere, Lagos, or email info@cardinalcounsel.co.