Deeds of assignment are an important part of any land transaction in Nigeria. It acts as the main record of the transaction between the Seller and the Buyer. The Deed of Assignment transfers legal ownership of the property to the Buyer. This is distinct from a Contract of Sale, which merely transfers equitable ownership to the buyer.
Where a seller delivers a Deed of Assignment to the Buyer, the law assumes that the purchase price has been paid, and other necessary conditions have been fulfilled by the parties. The Seller cannot later say that he did not receive the purchase price.
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Key elements of A Deed of Assignment
The Property’s Legal Owner must sign the Deeds of Assignment
A Deed of Assignment of Land must be executed by the Legal Owner of the property. Legal title is the actual ownership of the property. Legal title grants true ownership of the property, along with the bundle of rights that comes with land ownership.
A simple search at your state lands registry can help you identify the title holder. We recommend that you do this search as part of your due diligence process. This saves you stress in the future.
To register your title, you must have filed an application for Governor’s Consent with your State Lands Registry. In some situations, a seller may be eligible to apply for a Certificate of Occupancy.
Where a seller has not registered his title with the State Government, he/she can only transfer equitable title to the property. This means that the Legal title still resides in the last person who registered their title with the state.
A Rule of Thumb: If the seller is not the registered title holder, they cannot sign the Deed of Assignment
You must do your due diligence beforehand
Generally, the law expects a buyer to physically inspect the property he wants to purchase. He should also verify the title documents. A seller can only transfer his/her rights to the buyer. This means that if there are any limitations to their rights, those limitations will be passed on to the buyer. This can be quite infuriating.
This process should tell you whether you are buying the land from the right person, if there is any encumbrance on the land (such as an unpaid mortgage) or whether the land is suitable for your purposes. Facts discovered during the search process may affect your negotiations with the seller.
Recitals are Important
Recitals can make or break your Deeds of Assignment. This is because the root of title has to be clearly outlined and traceable within the recital. You must always ensure that there are no gaps in the chain of title between past owners of that property and the seller. Furthermore, any errors in your recital may lead to lengthy and costly litigation in the future. You could also experience immense frustration when trying to register your title with the government.
There is a widely-held perception that the recitals are legally inconsequential, since their role is fundamentally ‘scene-setting’ in nature and they do not automatically form part of the operative, legally binding agreement between the contracting parties. However, when a dispute arises and a court or arbitrator has to decipher the contract, the recitals may aid interpretation. They are, after all, clearly a part of the written contract in some way or other.
Milton & Cross Solicitors provides transaction advisory, due diligence and contract drafting services to individuals and businesses. We are always happy to assist you in coordinating and negotiating effective Deeds of Assignment.
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