Outcomes:

1. Explain the objectives, content and scope of this course
2. Explain various transactions affecting land and the laws that should apply to given cases
3. Apply the applicable laws to given cases
4. Identify ethical issues arising from lack of knowledge of appropriate law, and transaction.

 

Contents

1. Overview of the property law practice (Module) Course
2. Applicable Laws to property transactions, administration of estates and property taxation in Nigeria

 

• Property and Conveyancing Law 1959regulates property law practice in all the old western region and states in the defunct mid-western region, so if there is any property law transaction taking place in these areas this is the law that will be applied – (mid western region comprise – Edo, Delta) (Old western region –Ekiti, Ondo, Oyo, Osun, Ogun). So it regulates property law and practice in 7 states in Nigeria

 

• Conveyancing Act 1881 covers property law practice in Zamfara state. This is not a Nigerian law, but an English law. It also covers all the states in the defunct Eastern region and Northern region (19 states in the north and the FCT). These states are Anambra, Abia, Imo, Enugu, Ebonyi, AkwaIbom, Cross River, Rivers state, Bayelsa State (9 states) Northern - Abuja, Nassarawa, Niger, Kwara, Benue, Kogi, Yobe, Gombe, Borno, Jigawa, Zamfara, Kano, Kaduna, Katsina ,Sokoto state, Bauchi, Plateau, Kebbi, Taraba , Adamawa. It also formerly governed property transaction in Lagos until 2015 before another law was enacted –the land registration law Lagos 2015 came into force.

 

• Two laws govern Lagos – land registration law 2015, and Mortgage and Property law 2010. The difference between the two is that while land registration law 2015 applies to all transactions, Mortgage and Property Law 2010 applies to only mortgage transaction.The two laws apply to all parts of Lagos.

 

Tenancy law 2011 applies to all parts of Lagos except Ikoyi, Apapa, Ikeja GRA, Victoria Island

So you need to first identify the state where the property is located so you know the law to apply to the property transaction.

 

There are 3 property law practice jurisdictions in Nigeria.

• Property and Conveyancing Law Jurisdiction
• Conveyancing Act Jurisdiction – this covers all the states in the Northern region and FCT, and all the states in the defunct Eastern region
• Land registration law Jurisdiction – this covers only Lagos state.

 

Other applicable laws in Nigeria

1. 1999 Constitution - The constitution is an applicable law in property law practice – this is the enabling law for other statutes s43 of the CFRN talks about the right of every Nigerian to own property in any part of the country irrespective of their sex, ethnicity. Applicability applies to all the states in Nigeria.
2. Land Use Act - this vests all land in Nigeria in the governor of the state so before a person can transfer land, the person must obtain the consent of the state governor (s 22 of Land Use Act). Area of the applicability of the Land Use Act is all the states in Nigeria.

• CAMA – it says that every transaction to which a company is a party must contain the company’s seal, the company must affix its seal to every transaction and this includes property law transactions e.g. transfer of title for property. It also states that when a company creates a mortgage over its property the mortgage must be registered with the CAC within 90 days (s 197). It applies to the whole of Nigeria.

1. Land instrument registration law of the various states: each state has its own land instrument registration law e.g. Land instrument registration law Ogun. Note: the one that applies to Abuja is called the land instrument registration act because it is made by the National Assembly.It governs transfer of the instrument of title. It governs registration of property transaction in Nigeria.
2. Land Instrument preparation law – this is the law that governs the preparation of land instrument in Nigeria, each state has its own.
3. Illiterate protection law of the various states, and the Illiterate protection Act of Abuja – the law states that every transaction involving transfer of title to which an illiterate is a party must contain an illiterate jurat. Even when the person is blind, it must contain a blind person’s jurat. So if a Chinese man who doesn’t understand English is a party to a transaction, a jurat is also required for the transaction to be valid.

3 person who require a jurat - Illiterate, blind person and foreigner who doesn’t understand English language

• Administration of Estate law: Each state has its own. This is the law that applies when talking about the management of the property of a deceased person, whether he dies testate or intestate.
• Wills law of various states – this governs writing of wills in the various states in Nigeria. Wills act 1837 is a statute of general application that applies to certain states, where a state has its own wills law, the Wills act 1837 ceases to apply.

Three major acts govern the making of wills – the Wills Act 1837, the Wills act amendment act 1852 and the Wills laws of various states in Nigeria.

 

The laws that apply in every situation include: the 1999 constitution, land use act, rules of professional conduct, legal practitioners act, EA.

 

 

Note: The Registration of title law which was applicable to only Lagos state was expressly repealed by the land registration law 2015 and as such has ceased to be in force and is no longer an applicable law in Nigeria.

 

Also even though the Land Registration Law 2015 has displaced the Conveyancing act, it does not expressly repeal the Conveyancing act, so wherever there is a lacuna in the Land Registration Law 2015 or it is silent on a matter in any particular transaction, the Conveyancing act may be applicable. However Mortgage and Property law 2010 expressly repealed the Conveyancing act, so the Conveyancing act can never be applied for mortgage transactions.

 

Get the Statute book.

 

Classes of laws that govern property law practice in Nigeria

They are generally grouped into:

1. Received English law
2. Nigerian legislation
3. Case law
4. Customary law
5. Islamic law

 

• Nigerian legislation: Land use act 1978, CFRN 1999, Evidence act, Conveyancing act 1881, property and Conveyancing law 1959, personal income tax, companies income tax, CAMA, Stamp Duties Act, capital gains tax, value added tax, town planning laws, statute of frauds, Land Instrument Registration Law, Land Instrument Preparation Law, tenancy law 2011, Illiterate protection laws, high court (Civil procedure) rules of the various states, wills act 1837, wills (Amendment) act 1852, administration of Estates Law of the various states, probate (resealing) Act- if he dies testate he will apply for probate, if he dies intestate he will apply for letters for administration and the application for the letter for probate or administration must be made in the state where the man lived and died. An application to take authority to manage the property that is outside the state where the man lived is resealing. Rules Profession Conduct is also relevant. Legal practitioners act (s2 states who a lawyer is and s22)
• Received English law – Conveyancing act 1881, common law, principles of equity, property and Conveyancing law 1959, Statute of frauds 1677 (s 4 says that every transaction involving transfer of interests in land in Nigeria to be enforceable must be in writing, so if it is not in writing it can’t be enforceable. An oral contract for sale of land is only valid but not enforceable).

 

Various transactions in property law practice

• Power of Attorney- this is an instrument/ document of authority. It cannot be used to convey interest in land.,
• Conveyancing:

1. Deeds: a contract under seal is called a deed;legal interest in land can only be conveyed by a deed. There are different types of deeds; deed of gift, deed of ratification, deed of assignment – this is used for sale of land, deed of lease or sublease (this is used to transfer legal interest to another person to hold it exclusively for a fixed period of time; if the transfer of possession is below 3 years or is not more than 3 years the document is called tenancy agreement)
2. Sale of land – this is when interest is being transferred permanently for a fee
3. Leases – this is when an interest in land is transferred to another exclusively for fixed period of time
4. Mortgages – a mortgage is when an interest in land is being transferred to someone because an obligation is owed to that person and the transfer of interest is as security or collateral for that obligation. Deed of legal mortgage is the document by which title will be transferred to the bank to hold the property for as long as the mortgage is subsisting. If no property is used in the transaction then it’s a loan transaction and not a mortgage, a mortgage only comes into being when an interest in property is transferred to secure the obligation.
5. Gift – this is when an interest is transferred to another without the receiver paying anything. If done while alive then its called a gift inter vivos, if it comes into effect upon death it’s a will.
6. Wills – they are testamentary instruments and come into effect upon death of the person.A person to whom a gift is made under a will is called a beneficiary.

 

Probate practice – this is everything relating to the affairs of a dead man

Personal representative – they are two types a) where there is a will they are called executors, b) they are called administrators when the man dies without a will.

 

Taxes payable in property law transaction

When property is bought in Nigeria, the title must be perfected s22 and 26 of the LUA.

• Capital gains tax
• Stamp duties
• Registration fees
• Consent fees
• VAT
• Personal income tax
• Companies income tax
• Estate duty
• Charting & endorsement fees

 

Documents used in property law transactions

• Deeds
• Power of attorney
• Contract of sale (sale of land agreement)
• Deed of assignment
• Deed of legal mortgage
• Deed of lease/sub-lease
• Wills
• Bill of charges
• Loan Agreement
• Tenancy Agreement/ Lease agreement

 

Other documents include:

• Requisition: This is a document containing all the questions a person has to ask the owner of land for clarification purposes.
• Search report
• Epitome of title: This is a document containing the list of all documents affecting a particular piece of land together with copies of those documents. This together with an abstract of title is used to deduce and prove title and show there is no problem with the title.
• Abstract of title: This is a document that contains a historical outline of all transactions that have taken place over a period of time in respect of that particular property
• Letters – note: you will write at least one letter in every course.
• Completion statement: week 7
• Probate
• Letters of administration
• Assent
• Probate forms

 

Matters to bear in mind in dealing with any property law practice questions

• Location of property – identify the location, whether in Conveyancing Act jurisdiction, Property Conveyancing Law jurisdiction or Land Registration Law jurisdiction. There are two instances of exceptions where the law that will apply is the law of the person where the person resides and not the location of the property i) power of attorney and ii) wills
• Applicable laws – know the law that governs that area
• Parties & their statuses – in agency a 15 year old can be appointed as an agent if the principal has capacity, however in power of attorney this cannot be done because the person needs to have legal capacity. Power of attorney is a special form of agency so the person needs to have legal capacity. Note corporate bodies don’t have legal capacity, so e.g. the partners of the firm have to do it themselves, the firm cannot perform the transaction. Also you need to know the parties because if the person is an illiterate then you know a jurat is needed. So note legal capacity, illiterates, blind persons, foreigners who do not understand the English Language
• Nature of the transaction – nature varies from transaction to transaction and even the taxes that will be paid depend on the transaction: leases, tenancy, sale of land, mortgage, wills, administration of estate, power of attorney, deeds, billing, taxation, etc. Tips on how to identify the nature of transactions in problem questions e.g. Power of attorney – they’ll often say this person is not available but has decided to appoint Mr James to help him sell the property or act on his behalf, sale of land – Mr James is the owner of the auditorium but he has agreed to transfer the unexpired residue or an outright transfer to Mr Cole. In such case of sale of land the relevant document is deed of assignment. When the word letting or demise or grant of a term of years is used then know that they’re referring to lease (if more than 3 years) / tenancy (if 3 years or below).

 

Don’t answer the question until you have determined all these issues.

 

TUTORIAL / ANSWERS TO TASK 1 QUESTIONS

 

QUESTION 1

Tips:

Start with:“The following laws will be applicable in this property transaction”.

If they ask for 5, never just give 5 , give like 8 because you can accidentally write Company and Allied matters act instead of Companies and Allied Matters Act

When listing applicable laws, write them out in full.

 

QUESTION 2

Para 1 – (Transaction: sale of land transaction) (document: deed of assignment)

Para 2 –  (Transaction: sale of land transaction) (document: deed of assignment); (Transaction: sale of land transaction at the contract stage) (document: contract of sale of land/ contract of sale agreement)

Para 3 – (Transaction: lease of land transaction); (Transaction: leasehold transaction) (document: deed of lease)

Para 4 – (Transaction: inheritance is probate practice). Note: probate practice covers intestacy, testacy and defective testacy.  (Document: letters of administration), Assuming she dies testate the transaction is probate practice and the document will be a will. There will be grant of probate where there is a valid will and it’s the executors that will apply for the grant. Assuming it’s a defective will, the application made will be a grant of letters of administration with the will annexed. The administrator or any interested party can make the application for this e.g. the wife. Then, if he dies intestate the grant applied for will be a grant of letters of administration. Letters of administration with the will annexed is the document for defective will e.g. if the lawyer is mad. So there are 3 grants that can be applied for and obtainable: grant of probate, grant of letters of administration, grant of letters of administration with the will annexed.; (Transaction: mortgage transaction) parties are mortgagor and mortgagee and the mortgagee’s solicitor has the responsibility of drafting the agreement.

Para 5 – (transaction: tenancy transaction) (document: tenancy agreement) , the responsibility is the landlord or landlord’s solicitor.

Para 6 – (transaction: sale of land agreement at the contract stage) (document: contract of sale of land) parties are called vendor and purchaser and the responsibility is on the vendor or vendor’s solicitor to draft the contract.

Para 7  - instructing lawyer to prepare is lawyer-client relationship (transaction: probate practice) (document to be drafted is the will) document is to be drafted by the testators’ solicitor

• (Transaction: Billing) (Document: Bill of charges) to be drafted by the lawyer
• (Transaction: power of attorney) (Document: power of attorney)

 

Question 2

 

Question 5

Ross v Counters – you can sue a legal practitioner in negligence. He has duty of care and skill

Duty to account

Duty of Confidentiality

Duty to avoid conflict of interest

Duty to not charge excessively or too low

Proper stamp and seal – rule 10

Duty to explore alternative dispute resolution

 

The person that will draft the document in property transaction is the person who will lose if no document is drafted. It can be either the person themselves or their solicitor. Contract of sale – its purchaser and vendor (person selling), so the person drafting will be the vendor or vendor’s solicitor. It’s the vendor that will lose if no document is drafted, this is because the purchaser can manipulate the document and include some clauses to the detriment of the vendor. The vendor will be the one to lose if a faulty document is drafted. The person with the higher interest involved in the transaction should be the one to draft it. At the final stage the document to be drafted is the deed of assignment. At this final stage where the document deed of assignment is being drafted, the parties are called assignor (is the person selling, just as the employer is the one employing) and assignee (this is the buyer, just as the employee is the one receiving employment). At this point the responsibility to draft the document is the assignee or assignee’s solicitor because they have a higher interest. In lease agreement, the responsibility of drafting the agreement is the lessor (landlord) or lessor’s solicitor not the lessee. In a tenancy agreement it’s the landlord or landlord’s solicitor that will draft the agreement. A mortgage transaction is an exception to the general rule that the person with the higher interest will draft the agreement because the bank will never let anyone draft the mortgage agreement, so the mortgagee (the bank) will draft the agreement.

Note: when asked who will draft don’t forget to add ‘ or the x’s solicitor e.g. the lessor or lessor’s solicitor. It’s not necessarily just the solicitor because the lessor can be a lawyer and wouldn’t need to employ a solicitor to draft the agreement.

 

Wherever there is a certificate of occupancy, it means it’s a leasehold agreement and anything after that is a sublease, then after that is an under lease. This is because there is an imaginary lease between the first person and the governor as a person can no longer have a freehold interest in land. A deed of lease or sub lease or under lease will be drafted in the respective scenarios. If it’s for 3 years or less then the document will be a tenancy agreement.

 

QUESTION 3

Note: when asked to list tax, don’t use act i.e. it will be capital gains tax not capital gains tax act.

 

Question 4