Outcomes:

1. State the features of a deed
2. Identify when a deed is required in a transaction affecting land, and when it is not mandatory
3. Identify the various parts and contents of a deed of conveyance.
4. Draft a deed to professional standards
5. Identify the use of deed of ratification

 

Contents

1. Features of a deed
2. When deed is required and when it is not
3. Form and content of a deed

 

Read for bar part 2, not just blindly reading the entire chapter of a topic in a textbook.

 

Meaning of deed

A sealed instrument, containing a contract or covenant, delivered by the party to be bound thereby, and accepted by the party to whom the contract or covenant runs (Black’s law Dictionary, 6^th Ed).

A deed is a document in writing, signed sealed and delivered.A contract under seal is called a deed.

 

Instances where the use of a deed is compulsory

• When the lease is above 3 years. A lease that is exactly 3 years need not be by deed. There are three types of leases in terms of duration:

1. Lease that is below three years - this need not be by deed, it’s an equitable lease. Often times in Nigeria its called tenancy.
2. Lease that is exactly for a term of three years – this is also an equitable lease; therefore it need not be by deed. So a deed is not compulsory for the first two.

• Lease that is above three years – this must be by deed
• Power of attorney that authorizes the donee to execute a deed must be by deed (Powell v London; Abina v Fahart)

Note: that power of attorney need not be by deed, however if the power that’s going to be exercised under the power of attorney will involve the person executing a deed e.g. buying a property on behalf of the person, then for the appointment to be valid the power of attorney will need to be by deed.

• Legal Mortgage
• An assignment/transfer of legal interest must be by deed.
• Any contract without consideration must be by deed to be enforceable.
• Vesting declaration must be by deed. Vesting declaration is an instrument prepared for the purpose of vesting legal right in someone and must be by deed, it is not the same thing with a vesting order of court. A vesting order of court need not be by deed, its a just a judgment of a court of law vesting the title of a property in someone.
• Voluntary surrender

Note that transfer of shares need not be by deed and shares are not included in this list because shares are chattels and not real property.

Letters of administration and probate are sealed but are not a deed.

 

Essential of a deed

Every deed:

1. Must be in writing
2. Must create an obligation

Uses of deed:

• To transfer some title/interest – legal or equitable
• To confirm or ratify an interest or obligation already created
• To extinguish an obligation or interest
• To create, delegate or revoke power or authority

 

3. Must be signed: no signature, no valid document. Signing is essential – see s 83(4) EA 2011. When is a document to be signed - s 93(1) EA 2011. Electronic signature – see 93(2) EA 2011. Unsigned document is worthless and void; AG Abia state v Agharanya (1999) 6 NWLR (pt.607) 362, Omega bank v OBC Ltd [2005] 8 N.W.LR (pt.928) 547. Usefulness: Privity – only persons who sign a document are bound by it (Tweddle v Atkinson). Failure to sign means the person would not be bound by it.

 

4. Must be sealed: there is a difference between seal and sealing. As a general rule the affixing of a seal on a deed is not mandatory but sealing is mandatory.Meaning of seal: a ring, die, stamp or signet with an engraved emblem or symbol pressed into a wax, used to certify a signature or authenticate a document. The affixing of an actual seal used to be compulsory at common law, now it is no longer mandatory. Any indication or evidence of intention to seal is sufficient. As a general rule there need not be a seal for a document to be called a deed, if a document purports to be a deed you don’t have to look for a seal. Appearance of a seal is not a condition precedent for creation of a deed or validity of a deed, a document is a deed whether or not a seal is affixed. Sealing is an indication of a seal, it shows an intention to seal. A document can be a document under seal even though a physical seal is not present. So for example if in the writing of a document, the word deed is repeatedly used, you can see that the parties intend the document to be a document under seal as they intend the document to be deed, such document will be a valid deed even though a physical seal isn’t present. It is therefore safe to conclude that in modern times the physical seal (the red adhesive) need not be affixed to a legal document as a condition precedent to its validity or for it to pass as a deed. A document will be regarded as a deed once there’s an indication or an expression of an intention to seal it even though it is not sealed or, once there’s an indication on the face of the document that the parties intend the document to pass as a deed.

Examples of such indication or intention; the commencement states its a deed – “ this deed…..”, executed as a deed – “ signed, sealed and delivered….”, presumption of sealing.

If a document is signed and attested to, it is presumed to be a deed i.e. so attestation with signature makes a document a deed even though it is not stated to be a deed. Re Bryne 1893 AC p170, Stromde&Bond v Burden1952 1 ALL ER p59, First National securities ltd. v Jones 1978 2 WLR p.415, s 80 of Registration to Titles Act (it applies in Abuja) says an instrument which is expressed to be made or operate as a deed shall be deemed to be a deed and shall operate as a deed but shall not on that account be required to be sealed. S159 Evidence Actsays when a document is proved to have been duly signed and attested such a document is presumed to be sealed and delivered even though no seal is imprinted on it.

Exceptions; though appearance of a physical seal for a document to be adeed is not mandatory, there are instances where a seal is required for the document to be called a deed. 1) Document to which corporate bodies are parties. Documents executed by corporate bodies must have a seal of that corporate body affixed to it in the presence of at least two principal officers of that corporate body. See s 74 CAMA, art 2 table A of part 1 CAMA, Containers Nigeria Ltd. v Niglasco (1979) 4 CCHCJ P.290 @315

 

5. Must be delivered:Deliverygenerally is the handover of documents with an intention to be bound, in law it’s the intention with which the documents are handed over, if they are handed over with the intention to be bound, then the document is said to be delivered. The parties must intend that contract to be binding on them. Delivery simply means intention to create legal relations; it says that parties to a contract should have the intention that the contract be binding on them.Delivery could be by words or conduct expressly or impliedly acknowledging an intention to be bound. No special form of observance is necessary; only an act or word evincing an intention to create legal relations – Awojugbagbe v Chinukwe (supra). Physical “delivery” or “hand over” not necessary.

If a contract/ instrument mandates a person to do that which they already have an obligation to do it, the contract is not binding. 

There are two types of delivery

1. Delivery in escrow(Conditional delivery) - this is when the deed is delivered subject to the fulfilment of some condition at a future date or future contingency.

What is the legal implication of delivering in escrow – is everything suspended until the man pays or he can start to act on the property? The delivered deed takes effect on the date of delivery and not on date of fulfilment of condition notwithstanding that there is still some contingency that will occur at a future date. However if the time for the occurrence of the contingency comes and it fails to occur, the innocent party is entitled to withdraw or rescind. The mere fact that it has taken effect doesn’t mean it cannot be reversed.

Effects of delivery in escrow

• Delivery is complete and maker is bound, but instrument is only an escrow (not deed) until condition is fulfilled – See Norton Upon Deed pg15;Dalfam v okaku (2001) WLR (pt 735) 203
• Doctrine of relation back applies – so everything done will be withdrawn, so he can take back his property like nothing happened. Suberu v LSL ltd (2007) 10 NWLR (pt.1043) 59; Evin dyer v Pilcoxsa [2004] EWHC 66 (comm). Relation back invalidates adverse dealings on the property by the vendor, but does not validate acts of the purchaser during the period of escrow: see Alan v WG stores Ltd (1982) ch 511

1. Unconditional delivery – here documents are handed over with no further obligations owed by either party to each other and no conditions attached.

 

6. Attestation: means witnessing. As a general rule attestation need not be there, it is not mandatory. It need not be there for the validity of a deed, unless so provided by statute. When it is present however it is important for the following reasons (usefulness of attestation):

• For proof of due execution
• It aids the presumption of sealing. Attestation + signature s 159 EA.
• May raise presumption of due execution - when a document is attested to by a magistrate, judge, a court or notary public that document is presumed to have been duly executed s.150 EA.

When attestation is mandatory

• Presumption of due execution & authentication – ss. 118 EA 2011; see Uzoechi v Alinnor (2001) NWLR (PT.696) 203; Melwani v Five stars (2000) FWLR (pt.94) 31 (SC)
• Attestation is compulsory whenever a corporate body is a party – s.163 EA. Note that corporate body is not confined to only companies registered under part A CAMA, an office is also a corporate body including ministries/bodies.
• Execution by illiterates or blind person – s8(1) Land reg. Act; s. 119 (1) EA 2011; see also Ogunleye v Safejo (2010) All FWLR (523) 1889.
• Execution of wills (testamentary instruments) – s 9. Wills act 1837. Every will must contain an attestation
• When a blind person is a party to the document

 

7. Franking – this is when the name of a legal practitioner is endorsed on a legal document as the maker/preparer of that document. It usually starts with “prepared by”.

It is the endorsement on the face of the deed of the name & address of the lawyer that prepared the Deed – rule 10 RPC 2007; see also s.22(1)(d) & (2) LPA, LFN 2004; ss 4 & 5 of the Land Instrument Preparation Law of Ogun state,1978.

Franking removes the Deed from protection of Illiterate Protection Act – Eya v Qudus (2001) 15 NWLR (Pt. 737) 587 – the case says that a document doesn’t need jurat if duly franked by a lawyer.

When an illiterate is involved and the document is duly franked by a lawyer, attestation becomes unnecessary, absence of a jurat will not invalidate the document provided it has been duly franked. However for purposes of bar part 2 once a blind person is involved, there must be a jurat, don’t mention franking.

 

8. Endorsement for Governor’s consent: deeds for transfer of legal interest in land need to have the governors’ consent. S21, 22 and 26 Land Use Act. *Note that lack of governors consent, Stamping or registration doesn’t go to validity.

 

9. Date:Where dated, date is presumed to be date of its execution and is prima facie evidence of date of delivery, except otherwise shown. When a date is mentioned in a deed the deed takes effect on the stated date, but if its not dated it would take effect on the date of the delivery.

Undated deed takes effect on the date of delivery – s 157 EA 2011; Anuku v Standard Bank (1972) UILR 106

In a lease a date is compulsory, to show commencement – Amizu v Nzeribe (1985) 4 NWLR (pt 118) 755.  There is a difference between the date of execution of a deed of lease and the date of commencement of the tenancy. So you can leave the date of deed of the lease assignment undated but you must date the second one (commencement date). Every lease must have a commencement date, so the date of commencement of the lease/tenancy is compulsory not the date of execution of the deed.

When deed should be left undated

 Why? S 23(3) & (4) of the stamp Duties Act says that within 30 days of the execution of the deed an application must be made for stamping and paid.

It is best in practice to leave it undated so that when the person can afford the stamping fees, you can then insert a date and avoid incurring extra penalty charges. Anuku v Standard Bank

When does an undated Deed take effect? It takes effect from the date of delivery.

Note: A contract created by deed can only be revoked or cancelled by deed, power/obligation given by deed can only be revoked, withdrawn or extinguished by deed. A contract created by deed can only be ratified by deed – deed of ratification.

 

Alterations in a deed

• Presumed to have been made before execution
• Material alteration without the consent….

 

When deed is not mandatory

• Assent by personal representatives: the personal representatives prepare the assent which transfer legal interest, this an exception the rule that transfer of legal interest must be done by deed, so although an assent transfers legal interest it need not be by deed
• Power of attorney
• Lease of 3 years and below. NOTE: It first has to be a lease before you start thinking of whether it amounts to a lease or sublease. If the property is covered by a certificate of occupancy then it’s a sub-lease, but if there’s no certificate of occupancy then it’s a lease.
• Surrender by operation of law
• Receipt not required by law to be under seal
• Vesting orders of court
• Conveyance taking effect by operation of law
• Certain Disclaimers
• Transaction covered by the rule in Walsh v Lonsdale – Transfer of equitable interest are the transactions covered by the Walsh v Lonsdale and they need not be by deed.

 

Structure of a deed

A deed has four parts/segments;

• Introductory part
• Operative part
• Miscellaneous clauses
• Concluding part

Note that clauses and parts/segments are different

 

For example in a deed of assignment

Introductory part

The components of the introductory part are/ clauses contained in the introductory:

1. Commencementclause: the purpose is to identify the nature of the transaction. E.g. this deed of assignment… , this deed of mortgage, This deed of lease.
2. Date: this is the second clause in a deed, it tells us when the deed takes effect, where there’s a date thedeed takes effect from the date mentioned, where no date is mentioned it takes effect on the date of delivery. It is advisable to leave the date undated so as no to incur penalty. The date should be provided for, but left undated.

• Parties and their statuses: the parties must be adequately or sufficiently ascertainable. The parties clause must be drafted in such a manner as to make the parties easily ascertainable and also their statuses e.g. between Supreme of 33a AdeolaOdeku street Victoria island, Lagos (assignor) of the one part and Miss VictoryOjo on 25 Ojota Road, Lagos (assignee) of the second part

1. The recital: It’s a lucid history of devolution of the property. These are statements of fact. It usually starts with “Whereas”. For bar 2 you can just write whereas, you don’t need to write story. Note that a recital is not mandatory in a deed, when ‘is made’ is included in the commencement clause (‘this deed of assignment is made this ……)presupposes that there will be a recital, but where it says “this deed of assignment made this …. Day of……..”shows that there is no recital.

Types of recitals

1. Introductory recital – it provides justification for the transaction. So it says the need for the transaction e.g. in family property. So not all recitals tell story, its narrative recital that tells story extending to a certain number of years but an introductory recital just provides the background and gives reason for the transaction.
2. Narrative recitals – gives a short history of all the transactions that have taken place in that land over a period of time. It narrates about how the vendor came about the property. It contains statement of fact.The recital must cover a period of at least 40 years if its under Conveyancing Act jurisdiction and Lagos. Its 40 years in Lagos because the Lagos law doesn’t state the number of years and when there is a gap in Lagos law CA can be adopted. Under Property and Conveyancing Law jurisdiction the story must cover at least 30 years.

Function of recitals in a deed/ usefulness of recitals/advantages

1. It helps to clear any ambiguity. Statements in recital are interpreted contra preferentem (against the maker). It means that any ambiguity/confusion in the recital is interpreted against the maker
2. It is an aid to interpretation of sections or portions of the deed

• Statements that are made in a recital which are found in a document that is up to 20 years old, those statements in that recital are taken and presumed to be conclusive proof of what they contain.

1. They also serve as an estoppel. So a person is never allowed to resile from what is contained in a recital. This flows from equitable estoppel. London high trees properties case

 

Operative part

1. Testatum- E.g. “now this deed witnesses as follows”
2. Consideration clause – “paid by the assignee to the assignor”

• Receipt clause

1. Capacity in which the party assigns
2. Words of grants
3. Operative words – “all that’

• Parcels clause – this defines the property you’re assigning. It gives particulars of the property concerned and it must give such particulars as to make the property easily ascertainable
• Habendum – quantum of interest. Don’t confuse Habendum with reddendum. Reddendum is the rent clause in a lease, if it’s a lease agreement then reddendum would also be in the operative part.

 

Miscellaneous clauses

This is where other terms and conditions which the parties have agreed among themselves are contained

Clauses found here include:

1. Indemnity clause
2. Acknowledgment of safe custody, and undertaking for production: this applies when a C of O covers more than one property, and so cannot be given to a buyer of one of the properties because there will be no evidence of title for the other properties. In this scenario the seller makes an acknowledgment of safe custody of the C of O and undertaking to produce it for the buyer’s use when he needs it.

• Penalties

1. Any other terms or conditions that the parties may want to insert

 

Concluding part

• Testimonium is the beginning of the concluding part.

“In witness of which the parties have executed this deed in the manner below the day and year first above written”

• Schedule - is the section of the deed that is used to store technical items that cannot be conveniently brought into the operative part. Before anything can be included in the schedule it must be mentioned in the operative part. It only forms part of a deed where it is referred to in the body of the deed/agreement.

Usefulness of a schedule

1. They are used to store technical details and items like maps, diagrams, survey plans
2. It is among the concluding part

• It is also an aid to interpretation

 

• Execution – Signing: note execution by body corporate, illiterate, blind

There are various forms of execution.Execution:

1. By an illiterate
2. By a blind person

• By a foreigner who doesn’t understand the English language

1. Husband/wife
2. Firm
3. A body registered under part B of CAMA

• A body registered under part C of CAMA
• A body registered under part A of CAMA

1. Statutory organisation e.g. university of Lagos
2. Unregistered associations
3. Individuals

• Corporate bodies

The manner of drafting the execution clause will depend on the status of the party.

• Attestation – this is witnessing of the deed. It usually starts with “ in the presence of”
• Franking – professionally required to identify the legal practitioner
• Endorsement for Governor’s consent

 

Perfection of a deed

• Governor’s consent – s 21,22,and 26 land use act
• Stamping: section 23(3), 7(4) of the stamp duties act;
• Registration

This is also the order of perfection of deed – so a governor’s consent is first obtained before it stamped, then registered.

Savannah Bank v Ajilo, if its not perfected it remains an equitable interest, so just a sale agreement.

 

Effect of failure to perfect title

Note that if a question asks what is the effect of failure to perfect title, its not a straight forward question, you have to break it down into:

1. Effect of failure to obtain governor’s consent,
2. Effect of failure to stamp

• Effect of failure to register.

 

1. Effect of failure to obtain governor’s consent

S 22 of the land use act provides that every transfer of legal interest in Nigeria must be effected with governors consent otherwise the legal interest sought to be transferred will become void.

S 26 places some consequences: failure to obtain governors consent renders the transaction void see the case of Savannah bank v Ajilo. The person is a holder of an equitable title and no legal interest. Note that it’s the obligation of vendor, assignor and transferor to obtain governor’s consent but in practice it’s the assignee that applies.

 

1. Effect of failure to stamp

• Penalised for late stamping
• The deed will not be admissible in court to prove title. Its not altogether inadmissible, it is admissible to show that money was paid but it’s not admissible in court to prove title.
• It will be not accepted for registration. An unstamped deed is unacceptable for registration. Stamping is a condition precedent for registration.

 

• Effect of failure to register
• Pay penalty for late registration
• The document will not be admissible in court to prove title. It may be admissible to prove other things but not title. It is not a good root of title.
• The assignee may lose priority.

 

 

When a deed must be executed by more than one party it is called an INDENTURE e.g. deed of assignment, legal mortgage, lease, sublease. So it must be executed by two or more parties. An indenture must have more than one party (take note that its party not person, 11 people can still be one party. Party and person are not the same; party means the number of sides to the deed). 

A DEED POLL is when a deed can be executed by only one party or is permitted to be executed by only one party E.g. Power of attorney, deed of gift, deed of ratification.

 

 

You would have three parties to a mortgage where the person whose property securing the loan is not the person receiving the loan, so where a guarantor is present.

In a lease, the third party is called a surety. A surety is needed where its uncertain that the lessee would be able to continue paying the rent.

Essentials of a deed

• It must be signed
• Where there is an illiterate a jurat must be present – saying the document has been read and interpreted in a language he understands
• Sealing
• Delivery

Execution and attestation: they are like twins, once a document has been executed it must be attested to