Can You Use Escrow When Buying Property in Nigeria?

Yes, you can. Escrow is used in Nigerian real estate, though it is not yet a mandatory legal requirement for all transactions. It is increasingly becoming a standard practice for high-value deals and off-plan developments to protect buyers from fraud and ensure sellers are paid upon meeting specific milestones.


How Escrow Works in Nigeria

In a typical Nigerian real estate escrow arrangement, a neutral third party holds the purchase funds or title documents until pre-agreed conditions are met—such as successful title verification at the Lands Registry or physical handover of the property.

Who acts as the Escrow Agent?
Law Firms: This is the most common form of escrow in Nigeria. Reputable law firms, like Lawhaven Solicitors or SRJ Legal, act as neutral intermediaries, holding funds in a dedicated "client account" separate from their own operations.
Commercial Banks: Some banks, such as First Bank of Nigeria, offer formal escrow services for large-scale transactions.
Trustee Companies: Specialized financial institutions like FCMB Trustees provide professional escrow services governed by the Investment and Securities Act.

Common Uses in Nigeria
Off-Plan Purchases: Buyers pay into a bank-managed escrow account, and funds are released to the developer in phases as construction milestones are reached.
Secondary Market Sales: Ensures the buyer's money is safe until the "Deed of Assignment" is signed and registered.

Key Benefits
Fraud Prevention: Protects against "ghost sellers" or properties with multiple claims.
Milestone Protection: For developments, it ensures your money isn't spent on other projects before your own unit is completed.
Diaspora Security: Provides a secure way for Nigerians abroad to invest without relying on informal (and often risky) personal intermediaries.

Mary Edet,
Private Real Estate Advisor,
Edet Real Estate