CONTRIBUTED BY PRINCE E. IGHO Esq
INTRODUCTION
Ground rent and penal rent are not new to the Nigerian landscape, they are domiciled in part III of the Land Use Act LFN, 2004. The enactment of the Land Use Act in LFN, 2004 marked a significant milestone in the consolidation of land control and management in Nigeria, particularly in the Federal Capital Territory (FCT). Within Part III of the Act, detailed exploration is conducted into the complexities of ground rent and penal rent, clarifying the obligations and duties incumbent upon landholders, leaseholders, and governmental bodies involved in land resource administration. This article aims to illuminate the significance of ground rent and penal rent in shaping the property rights and land management landscape of the Federal Capital Territory by exploring their historical context, legal framework, and practical applications.
Through a comprehensive analysis, this article aims to contribute to a more profound understanding of how the Land Use Act influences sustainable development and the effective governance of land resources in the nation’s capital.
LANDS VESTED IN THE GOVERNOR
The Land Use Act, LFN, 2004, contains a provision that grants the Federal and State Government ownership of lands. These lands are to be overseen and administered by the Ministry responsible for lands and land-related matters, or any other authority appointed by the Governor for this specific purpose, on behalf of the Federal Government.
The Land Use Act, LFN[1], vests all land in the Governor of the state to wit:
“Subject to the provisions of this Act, all land comprised in the territory of each State in the Federation is hereby vested in the Governor of that State, and such land shall be held in trust and administered for the use and common benefit of all Nigerians in accordance with the provisions of this Act.”
GOVERNOR OF THE FEDERAL CAPITAL TERRITORY
All executive functions that pertain to land that are vested in the Governor of a State, in the Federal Capital Territory, are vested in the President of the Federal Republic of Nigeria.
In the absence of a governor in the FCT, the President has vested all functions as it relates to land management, use and development in the Honorable Minister of the FCT.
That is to say that, the executive functions as it relates to land use and development in the FCT that pertains to the President have been vested in the Honorable Minister of the FCT, by virtue of section 18 of the FEDERAL CAPITAL TERRITORY ACT, LFN 2004, to wit:
“As from the 28 May, 1984, the President has delegated to the Minister of the Federal Capital Territory the following functions, that is to say-
(a) any function or power conferred on the chairman of the Federal Capital Development Authority under this Act;
(b) any executive power of the Federal Government vested in the President pursuant to section 299 (a) or any other section of the Constitution of the Federal Republic of Nigeria and exercisable within the Federal Capital Territory;
(с) any function or power conferred by any law set out in the Second Schedule to this Act vested in the Governor or Military Governor of a State; and
(d) such other functions as the President may from time to time confer on the Minister.”
GROUND RENT
Ground rent means rent paid by a tenant under a long-term lease for the use of undeveloped land for the construction of a commercial building[2].
The term ‘ground rent’ in Nigeria’s Land Use parlance means a fee charged by the government for continual possession of a piece of land.
The Land Use Act gives the Honourable Minister of the FCT the power to charge ground rent to wit:
“(1) It shall be lawful for the Governor in respect of land, whether or not in an urban area to—
(c) demand rental for any such land granted to any person;
(d) revise the said rental-
(i) at such intervals as may be specified in the certificate of occupancy; or
(ii) where no intervals are specified in the certificate of occupancy at any time during the term of the statutory right of occupancy”
Fixing of ground rent is regulated by principles in the Land Use Act[3]. The Honourable Minister of FCT in fixing ground rent shall consider the following:
(а) shall take into consideration the rent previously fixed in respect of any other land in the immediate neighbourhood and shall have regard to all the circumstances of the case;
(b) shall not take into consideration any value due to capital expended upon the land by the same or any previous occupier during his term or terms of occupancy, or any increase in the value of the land the rental of which is under consideration, due to the employment of such capital.”
PENAL RENT
This is a statutory penalty imposed by the government for failure to honour covenants in the certificate of statutory right of occupancy. The covenants may include a covenant to pay ground rent, a covenant to develop the land, a covenant to use the land in a particular manner, and so on.
The Land Use Act[4], give the Honourable Minister of FCT the power to impose penal rent to wit:
“(e) impose a penal rent for a breach of any covenant in a certificate of occupancy requiring the holder to develop or effect improvements on the land, the subject of the certificate of occupancy, and to revise such penal rent as provided in section 19 of this Act;
(f) impose a penal rent for a breach of any condition, express or implied, which precludes the holder of a statutory right of occupancy from alienating the right of occupancy or any part thereof by sale, mortgage, transfer of possession, sublease or bequest or otherwise howsoever without the prior consent of the Governor”
THE LEGAL CONSEQUENCES OF FAILURE TO PAY GROUND RENT
Ground rent as earlier discussed is the fee paid by a land owner to the government but the question now is; what is the consequence of failure to pay the ground rent imposed by the government?
- The Government can impose a penal rent for failure to pay ground rent due to the government by the landholder[5];
- the Government can revise penal rent payable, as long as the breach of the covenant in the issued Certificate of Statutory Right of Occupancy subsists[6]; and
- the Government can revoke the already issued Certificate of Statutory Right of Occupancy[7].
To buttress the above position, the Court in the Matter between BROSSETTE MANUFACTURING (NIG) LTD v. M/S OLA ILEMOBOLA LTD & ORS (2007) LPELR-809(SC) posited thus:
“I should not be mistaken to be saying that the Governor does not possess the power to revoke any right of occupancy. No. the point is that that power is circumscribed by the provisions of Section 28(5) of the Land Use Act which are in the following terms: – “The governor may revoke a right of occupancy on the grounds of: – (a) A breach of any of the provisions which a certificate of occupancy is by Section 10 of the Act deemed to contain. (b) A breach of any term contained in the certificate of occupancy or in any special contract made under Section 8 of the Act. (c) A refusal or neglect to accept and pay for a certificate, which was issued in evidence of a right of occupancy but has been cancelled by the Governor under Section 9(3) of the Act.” See C.S.S. Bookshops Ltd. v. R.J.M.C.R.S. (2006) 11 NWLR (Pt. 992) 530.” Per PIUS OLAYIWOLA ADEREMI, JSC (Pp 53 – 53 Paras A – E)
HOW THE LEGAL CONSEQUENCES OF FAILURE TO PAY GROUND RENT CAN BE AMELIORATED AND PREVENTED
A joint reading of Section 17 and Section 19 (3) of the Land Use Act, LFN, 2004, has empowered the Honorable Minister to revise or reduce the rent payable. It can thus be inferred that to ameliorate the revocation of an already issued Certificate of Right of Occupancy, it is prudent to always pay the Ground Rent and Penal rent due or apply to the Honorable Minister of the FCT to revise the amount payable as a defaulter if concerns arise as to unfair charges or any other permissible good grounds.
CONCLUSION
It is necessary to emphasize that the power and authority over land use in the FCT and the power to charge ground and penal rent due to the FCT is vested in the Honorable Minister of the FCT and this power and authority is backed up by existing laws. Any person who neglects to pay rent due to the FCT or breaches a covenant in the Certificate of Statutory Right of Occupancy runs the risk of getting an already issued Certificate of Statutory Right of Occupancy revoked. It is advised that every Covenant is kept, and every money owed to the FCT is paid up; or in the alternative, an application for a review of the debt is made to the Honorable Minister for FCT to perhaps reduce the amount payable.
