STATUTORY FEES, as common a knowledge as this might seem, it has been discovered to be one of the reasons why quite a number of potential Real Estate investors do not key into real estate investment opportunities, simply because they don't understand its purpose.
The average new real estate investor or land buyer also refer to it as HIDDEN CHARGES, which is totally wrong. But then again, how would you know it is wrong if you don't understand what it is and is not. Follow through and I am sure by the end you will have better understanding of what STATUTORY FEES is and what it is not....
STATUTORY
FEE; What it is and what it is not.....
Definition: These are fees relating to the exercise of
statutory powers. Some of these fees are fixed by the government statute and
they are legally binding between the real estate company and the buyer
.
As common a knowledge as this might seem, it has been proven
that quite a number of potential real estate investor do not understand why and
purpose of "STATUTORY FEES", which the new real estate investor will
term as HIDDEN CHARGES.
So we let's talk about
STATUTORY FEES.
What is a statutory fee in real estate?
Simple, statutory as it is rightly defined is a legal fee
that is required of land owners to pay in the process of acquiring a parcel of
land, this usually consist of Deed of Assignment, Survey Fee and Developmental
Fee.
Note: Anything short or more than this is out of the scope
of STATUTORY FEES.
So why pay statutory fees? First we are going to look at the
process of buying a land.
· Upon satisfactory search and being convinced of
the authenticity of the property, which we always advice you carry out before
making payment for any land transaction, then you can go ahead and make payment
for the parcel of land you want to buy. To validate and seal the land transaction,
there are certain land documents you are expected to get, which are Contract of
Sale, Receipt, Deed of Assignment and Survey Plan.
- Deed of Assignment is a legal document which shows that party A, buyer has successfully and legally purchased the real property, Land from party B the seller. Without this document any land transaction can be considered null & void, as this is what is required for you to further process any land document with the ministry of lands in the state the land is situated.
- Survey Plan: Every parcel of land must be laid out according to the standard of ministry of land of the state and as such you must file for a survey which would make it accepted and recognized that you have not infringed on the state or federal road / layout as the case maybe. Another benefit of the survey is that it helps you determine if your land is under government acquisition or not, if you intend to process a survey plan and your land is under acquisition area, this will be indicated by the ministry of lands, as a registered and professional surveyor will have to take coordinates to draw out a survey.
All these is usually done by the real estate company, hence what you are paying for is a survey plan to indicate the parcel of land belongs to you and also not infringing on government acceptable standard.
- Receipt: This is simply an invoice showing the amount paid for the real property, it also indicates the description of the real property, location and also if there is an outstanding payment to be made.
- Developmental Fee: Like the word says, developmental indicates, for you to live in an environment free from natural hazard such as erosion, flooding, improper road network etc. A proper layout and infrastructure has to be in place which is the purpose for developmental fee.
Now, that you know what and what is involved in STATUTORY FEES, so why do you have to pay for it.
Especially developmental fee, can you remember that Street, Close, Crescent, that is always
flooded whenever it rains heavily in your neighborhood due to poor or no drainage system
*That area that never has regular power supply due to one issue other; either bad transformer,
poor electricity wiring
That area where every Tom, Dick & Harry goes in
and out without anybody questioning or knowing their identity regardless of the
time of the day, simply cause there is no security post in place.
Yes….! Those areas are like that because there was nobody to
put in place proper drainage, road network, proper layout, infrastructure,
electricity, security.
So when next you see Developmental Fee; be
sure to remind yourself of those areas you always wonder how people really live
there or why there is inadequate security.
With this knowledge, you now know what STATUTORY FEES is and what it is meant for. So it is not in anyway hidden but obvious and essential to provide you with quality real
estate investment.
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