Buying Off-Plan in Lagos: What Can Be Investigated Before Completion

An off-plan buyer commits capital before the finished property can be inspected, and that changes the balance of the due diligence because several questions that would ordinarily be tested through physical observation remain dependent on future construction and delivery.

The work should therefore focus more heavily on the evidence that already exists and should make clear which parts of the transaction remain uncertain because they depend on future performance.

The land and transaction structure can be investigated immediately

The buyer's legal advisers can review the interest held in the land and establish the relationship between the landowner, developer and selling entity.

Where those parties are different, the documentation supporting the developer's authority becomes particularly important because the buyer needs to understand the basis on which the property is being offered and the party against whom the contractual obligations will be enforceable.

Corporate information, regulatory registration and previous development activity can also provide useful evidence about the developer, although the current project should still be considered separately.

Planning information can be assessed before completion

The absence of a finished building does not prevent the buyer from investigating the planning position.

Available planning documents, survey information and approved design information can help establish what has been authorised and whether the product being marketed is consistent with the development for which permission has been obtained.

This matters where the buyer is relying on a particular unit size, configuration, floor, amenity or density because those characteristics can influence both occupation and value.

Where approval information remains incomplete or unavailable, that uncertainty should be recognised before substantial capital is committed.

The contract becomes a central source of evidence

Marketing information can describe the proposed property, although the contract determines the legal obligations relating to the unit, payment structure, delivery and the consequences of non-performance.

The buyer should therefore understand what the developer is contractually required to provide, when payments become due and what protections or remedies apply where the transaction does not proceed as expected.

The more capital the buyer commits before delivery, the more important those provisions become because the physical asset is not yet available to demonstrate whether the promises have been fulfilled.

The proposed price should also be tested

Off-plan property is sometimes marketed on the basis that an early buyer is acquiring at a discount to future completed value, although that proposition requires market evidence.

Completed properties, competing off-plan developments, payment terms, specification, construction stage and delivery risk can all affect the appropriate comparison, while asking prices for completed stock should remain distinct from verified achieved transactions.

Off-plan due diligence cannot remove construction and delivery uncertainty, although it can identify what is already capable of verification, what remains dependent on future performance and whether the evidence available at the current commitment point is sufficient for the buyer to proceed.

Construction progress should be reconciled with the next commitment

As the project advances, due diligence can be updated because the evidence available at reservation is not the same as the evidence available before a later instalment or handover. Construction progress can be observed, new approvals or project documents may become available and changes to specification or programme may become clearer, so the buyer should treat major payment points as opportunities to reconsider whether the information supporting the original decision remains current.

This is particularly relevant where the development is phased because completion of the buyer's unit may not mean completion of the wider environment on which the unit depends. Access roads, landscaping, recreational facilities, power infrastructure and other shared elements may be delivered later, and the buyer should understand both the contractual position and the practical consequence if those items are delayed. The economic value of the completed unit can depend partly on that wider delivery, particularly where the purchase price reflects the quality of the development as a whole.

This article is general information and is not advice on any specific property or transaction. The scope and legal effect of any engagement depend on the facts, documents and agreed terms applicable to that matter. For property due diligence, inspection, risk intelligence or valuation enquiries, contact HIDD Advisory.