4,000+ Words | LMS-Ready Certification Material

April 2026

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Learning Objectives

Upon completion of this lesson, candidates shall be able to:

Identify the constitutional provisions—particularly sections 43, 44, and 315(5) of the 1999 Constitution—that establish the foundation for the regulation of land ownership and acquisition in Nigeria.

Explain the elevated status of the Land Use Act 1978 within the Nigerian legal hierarchy, including the mechanism by which section 315(5) of the Constitution insulates the Act from ordinary legislative amendment.

Distinguish between the Conveyancing Act 1881 and the Property and Conveyancing Law 1959, specifying the jurisdictional scope and practical application of each instrument.

Analyse the jurisdiction-specific legislative frameworks governing land and mortgage transactions in Lagos, the FCT, Kano, Kaduna, Rivers, Delta, and the South-Eastern states.

Evaluate the role of customary law and Islamic law as sources of binding obligation in land transactions, with attention to the conditions under which these systems are applied by Nigerian courts.

Describe the operation of transaction-specific statutes—including the Stamp Duties Act, the Capital Gains Tax Act, and the Administration of Estates Laws—and their implications for the structuring and completion of land and mortgage transactions.

Apply the principles established in Savannah Bank v. Ajilo (1989), Ukeje v. Ukeje (2014), Abioye v. Yakubu (1991), and AG Bendel v. Aideyan (1989) to practical problems of title validity, consent, and constitutional compliance.

Identify the principal regulatory instruments issued by the Central Bank of Nigeria, the Federal Competition and Consumer Protection Commission, and the Mortgage Banking Association of Nigeria that affect mortgage origination and servicing.

Utilise digital legal research platforms—including NigeriaLII, Law Pavilion, and Mondaq—to access primary and secondary legal materials relevant to land transactions.

Conduct a comprehensive legal compliance assessment for a proposed mortgage transaction, integrating constitutional, statutory, regulatory, and customary requirements.

The legal framework that governs land transactions in Nigeria is not contained in a single statute or derived from a single legal tradition. It is, rather, a composite structure drawn from constitutional provisions, federal and state legislation, received English law, customary law, Islamic law, judicial precedent, and regulatory instruments. The practitioner who approaches a land transaction—whether a simple conveyance, a commercial lease, or a mortgage—without a thorough understanding of the interaction among these sources operates at considerable professional risk.

The complexity of this framework is a product of Nigeria’s legal history. The reception of English common law and statutes of general application during the colonial period created a body of property law that co-existed with, rather than replaced, the customary and Islamic systems that had governed land relations for centuries. At independence in 1960, the new Federation inherited three concurrent legal traditions—English, customary, and Islamic—each applicable to land within its respective domain. The enactment of the Land Use Act 1978 superimposed a fourth layer: a comprehensive statutory framework that vested all land in the state, abolished freehold tenure, and introduced a system of rights of occupancy. The 1999 Constitution, by entrenching the Land Use Act as a protected existing law under section 315(5)(d), added a fifth dimension—a constitutional overlay that determines the hierarchy among competing sources and imposes fundamental rights constraints on the exercise of governmental power over land.

It was estimated in a 2021 survey conducted by the Nigerian Bar Association’s Section on Business Law that a typical commercial property transaction in Lagos engages no fewer than twelve distinct statutory instruments, exclusive of case law and regulatory guidelines. In the northern states, where Islamic law governs succession and, in some contexts, the validity of contractual terms, the number of applicable legal sources is higher still. The purpose of this lesson is to provide a systematic examination of the principal laws applicable to land transactions in Nigeria, organised by source, jurisdiction, and transaction type, so that mortgage professionals may identify, locate, and apply the relevant rules with confidence and precision.

The Constitution of the Federal Republic of Nigeria 1999 (as amended) occupies the apex of the Nigerian legal order. Section 1(3) provides that any law that is inconsistent with the provisions of the Constitution is void to the extent of the inconsistency. The Constitution therefore operates as the ultimate source of validity for all legislation, including the Land Use Act, and as the standard against which customary and Islamic rules are tested for constitutional compliance. Three provisions of the Constitution are of particular significance for land transactions.

Section 43 provides that, subject to the provisions of the Constitution, every citizen of Nigeria shall have the right to acquire and own immovable property anywhere in Nigeria. This provision establishes a constitutionally guaranteed right of property acquisition that transcends state boundaries and ethnic affiliations. The qualification "subject to the provisions of this Constitution" has been interpreted by the courts to mean that the right is not absolute; it is subject, in particular, to the provisions of the Land Use Act (by virtue of section 315(5)) and to the power of compulsory acquisition under section 44. The practical effect is that while every Nigerian citizen possesses a constitutional right to own land, the exercise of that right is channelled through the statutory framework established by the Land Use Act, which requires Governor’s consent for alienation, limits the duration of interests to the term of the right of occupancy, and vests ultimate ownership in the state.

Section 44(1) provides that no movable property or any interest in immovable property shall be taken possession of compulsorily, and no right over or interest in any such property shall be acquired compulsorily, in any part of Nigeria except in the manner and for the purposes prescribed by a law that, among other things, requires the prompt payment of compensation. This provision establishes two constitutional safeguards: first, that compulsory acquisition must be authorised by law and directed at a public purpose; and second, that the person whose property is acquired is entitled to prompt compensation. The interaction between section 44 and the Land Use Act is of particular importance. Section 28 of the Land Use Act empowers the Governor to revoke a right of occupancy for "overriding public interest," and section 29 prescribes the compensation payable upon revocation. In AG Bendel v. Aideyan (1989) 4 NWLR (Pt. 118) 646, the Supreme Court considered the adequacy of compensation under the Act.

Case Study: AG Bendel v.

Aideyan (1989) 4 NWLR (Pt. 118) 646The Supreme Court held that the compensation provisions of the Land Use Act, which limit compensation to the value of unexhausted improvements on the land rather than the market value of the land itself, are constitutionally valid by virtue of section 315(5), which insulates the Act from constitutional challenge on grounds of inconsistency with fundamental rights provisions.

The court reasoned that the Act, having been specifically preserved by the Constitution, constitutes a permissible limitation on the right to compensation under section 44.

The practical consequence of this decision is that holders of rights of occupancy whose interests are revoked by the Governor are entitled only to compensation for the buildings, crops, and other improvements on the land, not to the market value of the underlying land interest.

Mortgage professionals should be aware that the collateral value of mortgaged property may be significantly diminished in the event of government acquisition, since the compensation recoverable may be substantially less than the outstanding mortgage debt.

Section 315(5)(d) of the 1999 Constitution provides that the Land Use Act shall have effect as an existing law with such modifications as may be necessary to bring it into conformity with the Constitution, and that nothing in the Constitution shall be deemed to invalidate any provision of the Act. The subsection further provides that the Act shall not be amended or repealed except in accordance with the procedure prescribed by section 9(2) of the Constitution for the alteration of the Constitution itself—that is, by a two-thirds majority of all members of each chamber of the National Assembly and the approval of the Houses of Assembly of not less than two-thirds of the states. This provision has the practical effect of elevating the Land Use Act above ordinary legislation. While the Act is not, strictly speaking, part of the Constitution, it enjoys a degree of constitutional protection that no other federal statute possesses. The consequence is that the Act has remained substantially unchanged since its enactment in 1978, despite widespread criticism of its provisions and repeated calls for reform from the legal profession, the real estate industry, and international development organisations. A 2020 report by the World Bank’s Land Governance Assessment Framework identified the constitutional entrenchment of the Act as one of the principal obstacles to land reform in Nigeria, noting that the supermajority requirements make legislative amendment practically unattainable.

The Land Use Act 1978 (Cap. L5, Laws of the Federation of Nigeria 2004) is the single most important piece of legislation governing land transactions in Nigeria. Its provisions define the framework within which all interests in land are created, transferred, encumbered, and extinguished. Section 1 vests all land comprised in the territory of each state in the Governor of that state, to be held in trust and administered for the use and common benefit of all Nigerians. Section 5(1) empowers the Governor to grant statutory rights of occupancy in urban areas, while section 6(1) empowers local government authorities to grant customary rights of occupancy in rural areas.

For the purposes of land transactions, several provisions of the Act are of critical operational significance. Section 22 prohibits the alienation of a statutory right of occupancy—whether by assignment, mortgage, transfer of possession, sublease, or otherwise—without the prior consent of the Governor. The consequences of non-compliance with this requirement were established definitively in Savannah Bank v. Ajilo (1989) 1 NWLR (Pt. 97) 305.

Case Study: Savannah Bank v.

Ajilo (1989) 1 NWLR (Pt. 97) 305The Supreme Court held that a mortgage created over land held under a statutory right of occupancy without the Governor’s consent, as required by section 22 of the Land Use Act, is null and void ab initio.

The mortgage is not merely voidable or irregular—it is a complete nullity from its inception, and the mortgagee acquires no enforceable interest whatsoever in the land.

The court emphasised that the consent requirement is a substantive condition of validity, not a procedural formality, and that its purpose is to preserve the Governor’s supervisory authority over the disposition of land held in trust for the public benefit.

The decision imposed a fundamental operational requirement on all mortgage institutions: no loan secured by land under statutory right of occupancy may be disbursed until Governor’s consent has been duly obtained and endorsed on the mortgage instrument.

Section 26 prescribes the circumstances under which a customary right of occupancy may be alienated. Unlike section 22, which requires the Governor’s consent, section 26 requires the consent of the local government authority and the approval of the Governor. Sections 34 and 36, as discussed in the preceding lesson, create deemed grants for persons who were in occupation of land at the commencement of the Act. Section 28 empowers the Governor to revoke a right of occupancy for overriding public interest, and section 29 provides for compensation upon revocation. Section 21 limits the duration of rights of occupancy to a maximum term determined by the Governor, which in practice is typically 99 years.

The Act’s interaction with pre-existing systems of law was considered by the Supreme Court in Abioye v. Yakubu (1991) 5 NWLR (Pt. 190) 130, in which the court held that sections 34 and 36 operate to convert pre-existing customary and freehold interests into statutory rights of occupancy by operation of law, without the need for any formal grant or documentation. This principle has far-reaching consequences for title verification, as it means that valid statutory rights may exist in the absence of any documentary evidence from the state government.

The procedural and substantive rules governing the creation, transfer, and enforcement of interests in land are not uniform across Nigeria. Two principal conveyancing statutes operate in different parts of the country, and the determination of which statute applies to a given transaction depends on the jurisdiction in which the land is situated.

The Conveyancing Act 1881, a statute of the Imperial Parliament at Westminster, was received into Nigerian law as a statute of general application in force in England on 1 January 1900. It continues to apply in the states of the former Northern Region and in any state that has not enacted its own property and conveyancing legislation. The Act regulates the formal requirements for conveyances, the creation and enforcement of covenants for title, the rules governing powers of attorney in relation to land, the creation and discharge of mortgages, and the rights and obligations of vendors and purchasers in uncompleted contracts. It has been noted by Oluyede (1998) that the continued application of a Victorian English statute to modern Nigerian land transactions is one of the more conspicuous anomalies of the country’s received law, though the courts have consistently upheld its applicability in the absence of local replacement legislation.

The Property and Conveyancing Law 1959 (PCL) was enacted by the legislature of the former Western Region and applies in the states carved from that region: Lagos, Ogun, Oyo, Osun, Ondo, and Ekiti. The PCL is a more modern and comprehensive instrument than the Conveyancing Act 1881, having been drafted with specific regard to Nigerian conditions. It addresses the creation and transfer of legal and equitable interests, the requirements for valid conveyances and leases, the rules governing mortgages (including the equity of redemption, the mortgagee’s power of sale, and foreclosure), the doctrine of notice, and the effect of registration. Part III of the PCL contains detailed provisions on mortgages that are of direct relevance to mortgage practice, including section 109 (which defines the mortgagee’s power of sale), section 110 (which prescribes the conditions for the exercise of that power), and section 123 (which preserves the mortgagor’s equity of redemption).

The practical consequence of this jurisdictional split is that a mortgage professional operating across multiple states must ascertain which conveyancing statute applies in each jurisdiction. A mortgage instrument that is valid under the PCL may contain deficiencies under the Conveyancing Act 1881, and vice versa. In states where neither statute applies directly—a situation that arises in some states of the former Eastern Region—the courts apply English common law principles supplemented by the rules of equity.

Beyond the federal statutes of general application, individual states have enacted legislation that modifies, supplements, or replaces the general law in relation to land and mortgage transactions within their respective territories. The following survey addresses the jurisdictions of greatest significance to mortgage practice.

Lagos State possesses the most developed and modernised body of property legislation in Nigeria, reflecting its status as the commercial capital with the highest volume of real estate transactions. Two statutes are of particular importance.

5.1.1 The Mortgage and Property Law 2010 (Lagos State)

The Mortgage and Property Law 2010 was enacted to consolidate and modernise the law relating to mortgages and property in Lagos State. It repealed the PCL 1959 insofar as it related to mortgages and introduced several significant reforms. The Law provides a streamlined procedure for the creation of legal mortgages, codifies the mortgagee’s remedies (including the power of sale, appointment of a receiver, and foreclosure), and introduces provisions for the regulation of mortgage-backed securities. Section 15 of the Law provides that a legal mortgage shall be created by a deed expressed to be by way of legal mortgage, and that the mortgagor shall, by virtue of the deed, be deemed to have granted to the mortgagee a term of years absolute, subject to a provision for cesser on redemption. The Law also addresses the priority of mortgages, the rights of successive mortgagees, and the procedure for the discharge of registered mortgages. Data from the Lagos State Lands Bureau indicate that approximately 8,500 mortgage instruments were registered in Lagos between 2018 and 2024, representing roughly 45 per cent of all mortgage registrations nationwide during that period.

5.1.2 The Land Registration Law 2015 (Lagos State)

The Land Registration Law 2015 replaced the Registration of Titles Law (Cap. R4, Laws of Lagos State 2003) and introduced a system of title registration designed to simplify and secure title verification. The Law creates a Land Registry under the supervision of the Registrar of Titles, establishes a register of title in which all interests in land within designated registration districts are to be recorded, and provides that registered interests shall take priority over unregistered interests. Section 53 of the Law provides that the register shall be conclusive evidence of the title of the registered proprietor, subject to certain overriding interests. The implementation of this Law has been supported by the digitisation of the Lagos land registry, a project that was reported in 2023 to have achieved the electronic indexing of approximately 350,000 land title records, representing an estimated 70 per cent of all registered titles in the state.

The FCT operates under the FCT Act (Cap. F6, Laws of the Federation 2004) and the Land Use Act. The President exercises the powers of the Governor in respect of land within the FCT, and land administration is conducted through the Abuja Geographic Information Systems (AGIS), which was restructured as the FCT Land Administration Department in 2020. The FCT does not have a separate conveyancing statute; consequently, the Conveyancing Act 1881 applies, supplemented by common law and equity. A distinctive feature of FCT land administration is the allocation system, under which land is made available through formal application to the FCT Administration, followed by the issuance of a right of occupancy and a Certificate of Occupancy. Between 2019 and 2024, the FCT Administration processed approximately 22,000 new land allocations, though a backlog of over 30,000 pending applications has been reported by the FCT Minister.

In the predominantly Muslim states of northern Nigeria, Islamic law (Sharia) constitutes an additional and, in some contexts, paramount source of binding obligation in land transactions. The Sharia Courts, established under the various State Sharia Court Laws, exercise jurisdiction over civil matters between parties who are Muslims, including disputes relating to succession, gifts of land (hiba), charitable endowments (waqf), and pre-emption rights (shuf’a). In Kano State, the Kano State Sharia Courts Law 2000 confers jurisdiction on Sharia Courts to determine matters relating to the administration and distribution of deceased estates in accordance with Islamic law, and such jurisdiction extends to land forming part of the estate. The Islamic law of succession (fara’id) prescribes fixed shares for designated heirs—for example, a widow receives one-eighth of the estate where there are children—and these shares apply to land as to all other property. In Kaduna State, where the population is divided between Muslim and Christian communities, the application of Islamic law to land transactions is confined to transactions between Muslims in the predominantly Muslim local government areas of the northern part of the state. The Kaduna State High Court exercises concurrent jurisdiction with the Sharia Court of Appeal, and the determination of which court has jurisdiction depends on the religious affiliation of the parties and the nature of the transaction.

The interaction between Islamic law and the Land Use Act has been the subject of scholarly commentary. Yadudu (1993) observed that the Land Use Act, by vesting all land in the state, effectively overrides the Islamic concept of mulk (private ownership) to the extent that mulk implies ownership in perpetuity, since the Act limits all interests to the term of the right of occupancy. The Kano State Geographic Information System (KANGIS) has attempted to reconcile these competing frameworks by requiring that all transactions in land, whether governed by Islamic law or general law, be registered with KANGIS as a condition of validity. Between 2014 and 2024, KANGIS registered over 35,000 land transactions, a figure that represents a substantial increase from the fewer than 5,000 transactions registered in the decade preceding KANGIS’s establishment.

In the oil-producing states of the Niger Delta, the body of law applicable to land transactions is augmented by petroleum legislation and environmental regulations. The Petroleum Act 1969, the Oil Pipelines Act 1956 (Cap. O7, Laws of the Federation 2004), and the Nigerian Oil and Gas Industry Content Development Act 2010 all contain provisions that affect the use, transfer, and encumbrance of land in petroleum-producing areas. Section 1 of the Petroleum Act vests all petroleum resources in the federal government, and section 2 empowers the Minister to grant oil exploration and production licences over any land, irrespective of any subsisting right of occupancy. The Oil Pipelines Act empowers the holder of a pipeline licence to enter upon and use any land for the purpose of constructing and maintaining pipelines, subject to the payment of compensation. For mortgage professionals, the implication is that a property situated in an oil-producing area may be subject to easements, licences, or acquisition powers that significantly diminish its value as collateral. Due diligence in these jurisdictions must include investigation of any subsisting petroleum licences, pipeline rights of way, and environmental remediation orders.

The states of the former Eastern Region—Anambra, Enugu, Imo, Abia, and Ebonyi—do not have a single comprehensive conveyancing statute equivalent to the PCL in the West or the Conveyancing Act in the North. Land transactions in these states are governed by a combination of English common law, the rules of equity, various state Land Instrument Registration Laws, and customary law. The absence of a modern conveyancing code creates operational challenges for mortgage professionals, particularly in relation to the formal requirements for valid mortgages, the exercise of the mortgagee’s power of sale, and the priority of competing interests. The prevailing practice in these states is to rely on the common law requirements for a valid deed (signing, sealing, delivery, and attestation), supplemented by the registration requirements of the applicable Land Instruments Registration Law. In Anambra State, the Land Instruments Registration Law (Cap. 76, Laws of Anambra State 1991) requires that all instruments affecting land be registered at the Lands Registry within 60 days of execution; failure to register renders the instrument inadmissible in evidence in court proceedings, though it does not invalidate the transaction between the parties.

Customary law remains a significant source of binding obligation in land transactions throughout Nigeria. The courts apply customary law in two principal contexts: first, where the transaction in question is a customary transaction (such as a grant of family land by the family head to a member of the family, or a transfer of customary land between members of the same community); and second, where the parties to the transaction are subject to the same system of customary law and have conducted the transaction in accordance with customary practice. The conditions for the judicial application of customary law were authoritatively stated in Owonyin v. Omotosho (1961) 1 All NLR 304, in which the Supreme Court held that customary law will be applied where it is established by evidence, where it is not repugnant to natural justice, equity, and good conscience, and where it is not incompatible with any written law for the time being in force.

The repugnancy test has acquired enhanced significance in the wake of the Supreme Court’s decisions in Ukeje v. Ukeje (2014) and Anekwe v. Nweke (2014), in which gender-discriminatory customary rules were declared unconstitutional. The effect of these decisions is that any customary rule that purports to exclude women from owning, inheriting, or dealing in land is void and unenforceable, regardless of the antiquity or widespread acceptance of the practice.

Case Study: Ukeje v.

Ukeje (2014) LPELR-22724(SC)The Supreme Court declared that the Igbo customary law rule excluding female children from inheriting their deceased father’s estate is repugnant to natural justice, equity, and good conscience and is inconsistent with section 42(1) of the 1999 Constitution, which prohibits discrimination on the ground of sex.

The court held, per Rhodes-Vivour JSC, that the discriminatory customary rule is void to the extent of its inconsistency with the Constitution.

This decision established a constitutional baseline for gender equality in property rights that applies across all Nigerian jurisdictions.

For mortgage professionals, the implication is that titles derived through customary succession practices that excluded female heirs are vulnerable to constitutional challenge, and that female family members must be treated as having equal rights to inherit and deal in land.

Islamic law applies to land transactions in the states of northern Nigeria where Sharia courts exercise jurisdiction. The principal areas in which Islamic law affects land transactions are succession (fara’id), charitable endowments (waqf), gifts of land (hiba), and pre-emption (shuf’a). The last of these—shuf’a, or the right of a co-owner or neighbour to purchase a property at the same price offered by a third party before the sale to that party is completed—is of particular relevance to mortgage practice, as it may affect the ability of a mortgagee to exercise the power of sale. If the mortgaged property is situated in a jurisdiction where shuf’a is recognised, a co-owner or neighbour may assert a right to acquire the property in priority to any third-party purchaser at a foreclosure or power-of-sale auction. Mortgage professionals operating in these jurisdictions should investigate the existence of any shuf’a rights as part of their pre-disbursement due diligence.

The inalienability of waqf property, as discussed in the preceding lesson, remains a critical consideration. Waqf land cannot be sold, mortgaged, or otherwise disposed of, and any transaction purporting to encumber waqf property is void ab initio. The Kano State Waqf Commission, which administers over 1,200 registered waqf properties, maintains a public register that should be consulted by mortgage professionals as part of the due diligence process for any property situated in Kano State.

In addition to the constitutional, conveyancing, and jurisdictional laws examined above, several federal statutes impose specific obligations in connection with the execution, taxation, and administration of land transactions. These statutes apply across all jurisdictions and must be complied with irrespective of the conveyancing regime that governs the substantive transaction.

The Stamp Duties Act requires that all instruments of alienation relating to land—including deeds of assignment, mortgages, leases, and sub-leases—be stamped with the appropriate duty within 30 days of execution (section 23). The rate of duty varies by instrument type and transaction value. For conveyances on sale, the rate is typically between 1.5 per cent and 3 per cent of the consideration or the market value of the property, whichever is higher. For mortgage deeds, the rate is assessed on the principal sum secured. Section 22 of the Act provides that an instrument that is not duly stamped shall not be admitted in evidence in any civil proceedings, and section 23 imposes a penalty for late stamping. The Federal Inland Revenue Service (FIRS) administers stamp duty on instruments executed between parties in different states or involving a body corporate, while state internal revenue services administer stamp duty on instruments between individuals within the same state. Data from the FIRS indicate that stamp duty collections from property transactions totalled approximately NGN 48 billion in 2023, representing a 22 per cent increase from the preceding year.

The Capital Gains Tax Act imposes a tax of 10 per cent on the capital gain arising from the disposal of any asset, including land and buildings. Section 2 defines a chargeable gain as the difference between the consideration received for the disposal of the asset and the cost of acquisition, adjusted for allowable expenditure (such as the cost of improvements, legal fees, and stamp duties). Section 26 exempts from tax the disposal of a principal private residence, subject to certain conditions. The tax is assessed and collected by the relevant state internal revenue service, except in the FCT, where it is collected by the FIRS. The practical implication for mortgage transactions is that the vendor of a property is liable to capital gains tax on the profit realised from the sale, and that this liability may affect the net proceeds available to discharge an existing mortgage. Mortgage professionals should ensure that the capital gains tax position of the vendor is ascertained and, where necessary, that provision is made for the payment of tax out of the sale proceeds before the balance is remitted.

Where land is acquired through succession—either under a will or on intestacy—the applicable administration of estates legislation determines the procedure for vesting the property in the beneficiaries. The Administration of Estates Laws of the various states (modelled, in most cases, on the English Administration of Estates Act 1925) prescribe the procedure for obtaining a grant of probate (where the deceased left a will) or letters of administration (where the deceased died intestate), and for the collection, administration, and distribution of the assets of the estate. In intestate succession under general law, the distribution of the estate is governed by the rules of distribution prescribed by the relevant state law, which typically provide for fixed shares for the surviving spouse, children, and other dependants. In states where Islamic law applies, intestate succession is governed by the Sharia rules of fara’id, which prescribe fixed shares for designated heirs. The relevance of administration of estates legislation to mortgage practice is twofold: first, a mortgage professional may be required to verify that the vendor’s title was acquired through a valid administration of a deceased’s estate; and second, where a mortgagor dies, the administration process determines the order in which the estate’s creditors—including the mortgagee—are entitled to payment.

The common law doctrine of judicial precedent (stare decisis) operates in Nigeria as in all common-law jurisdictions: decisions of superior courts are binding on inferior courts, and the Supreme Court’s decisions are binding on all courts in the federation. The body of case law on land transactions is extensive, and four decisions are of foundational importance to mortgage practice.

As discussed above, this decision established that a mortgage executed without the Governor’s consent under section 22 of the Land Use Act is null and void ab initio. The significance of the decision extends beyond its immediate holding. It imposed on the entire mortgage industry a non-negotiable due diligence obligation: the verification of Governor’s consent as a condition precedent to loan disbursement. The Central Bank of Nigeria subsequently incorporated this requirement into its prudential guidelines for mortgage institutions, providing that any mortgage facility disbursed without evidence of Governor’s consent shall be classified as a non-performing facility for provisioning purposes.

This decision, discussed above in the context of customary law, declared unconstitutional the customary rule excluding female children from inheritance. Its importance for mortgage practice lies in the principle that titles derived through discriminatory customary succession may be vulnerable to challenge. A mortgage professional who accepts as collateral a property whose title chain includes a customary succession that excluded female heirs assumes a risk that a subsequent constitutional challenge by the excluded heir(s) could invalidate the title.

This decision confirmed that pre-1978 customary and freehold interests were converted into statutory rights of occupancy by operation of sections 34 and 36 of the Land Use Act, without the need for any formal grant or documentation. The practical significance for mortgage professionals is that the absence of a Certificate of Occupancy does not necessarily indicate the absence of a valid interest. A borrower who can establish that the property was occupied before the commencement of the Act may possess a valid deemed grant that is capable of supporting a mortgage, provided that Governor’s consent is obtained for the mortgage transaction itself.

This decision, discussed above, confirmed that the compensation provisions of the Land Use Act are constitutionally valid and that the holder of a revoked right of occupancy is entitled only to compensation for unexhausted improvements, not to the market value of the land. The decision underscores the risk that mortgage collateral may be diminished in value by government acquisition, and it reinforces the importance of adequate insurance and conservative loan-to-value ratios in jurisdictions where government acquisition is common.

In addition to the constitutional, statutory, and common-law sources discussed above, the regulatory environment for mortgage transactions is shaped by instruments issued by the Central Bank of Nigeria (CBN), the Federal Competition and Consumer Protection Commission (FCCPC), and the Mortgage Banking Association of Nigeria (MBAN).

The CBN, as the regulator of all deposit-taking financial institutions and primary mortgage banks in Nigeria, issues prudential guidelines and circulars that have the force of binding regulation within the banking sector. The CBN’s Revised Guidelines for Primary Mortgage Banks (2014, as amended) prescribe the minimum capital requirements, lending limits, collateral requirements, and risk management standards applicable to mortgage institutions. Section 4 of the Guidelines requires that all mortgage facilities be secured by a valid legal mortgage over property held under a statutory right of occupancy, accompanied by Governor’s consent and a current survey plan. Section 7 prescribes a maximum loan-to-value ratio of 80 per cent for residential mortgage facilities and 70 per cent for commercial facilities. The CBN’s Framework for the Regulation of Housing Finance in Nigeria (2019) introduced additional requirements for the origination, documentation, and servicing of mortgage loans, including mandatory disclosure of all fees and charges to the borrower, standardised mortgage documentation, and periodic reporting of mortgage portfolio performance. As at December 2024, data from the CBN’s Financial Stability Report indicated that the total value of outstanding mortgage facilities in Nigeria was approximately NGN 1.2 trillion, secured by an estimated 45,000 individual mortgage accounts.

The FCCPC Act 2018 established the Federal Competition and Consumer Protection Commission, which replaced the former Consumer Protection Council. Part XV of the Act contains provisions for the protection of consumers in financial services transactions, including mortgage transactions. Section 115 prohibits unfair, unreasonable, or unjust contract terms, and section 116 empowers the Commission to investigate and remedy conduct that is detrimental to consumer interests. The FCCPC has issued guidelines on fair lending practices that require mortgage institutions to provide borrowers with clear and comprehensive disclosure of the terms of the mortgage, including the total cost of credit, the applicable interest rate (whether fixed or variable), the frequency and basis of interest rate adjustments, and the consequences of default. The Act also contains provisions for the resolution of consumer complaints through the Commission’s complaint-handling mechanism, which provides a relatively expeditious alternative to court proceedings.

MBAN is the professional association of licensed primary mortgage banks in Nigeria. It issues codes of practice and professional standards that, while not possessing the force of law, are regarded as industry benchmarks and may be taken into account by the CBN in the exercise of its supervisory functions. The MBAN Code of Mortgage Practice (2021) prescribes standards for mortgage origination (including borrower assessment, property valuation, and documentation), mortgage servicing (including collection procedures, account management, and arrears handling), and mortgage enforcement (including the exercise of the power of sale and foreclosure). The Code also establishes a framework for professional development, requiring that all mortgage officers complete a minimum of 30 hours of continuing professional development per annum, of which at least 10 hours must relate to legal and regulatory updates. The IMBL Nigeria certification programme, of which this lesson forms a part, is recognised by MBAN as satisfying the CPD requirements for its members.

The effective practice of mortgage law requires regular access to primary and secondary legal materials. The following digital platforms are the principal resources available to Nigerian practitioners.

NigeriaLII (www.nigerialii.org) is a free, publicly accessible online repository of Nigerian legal materials. It provides access to the full text of federal and state legislation, judgments of the Supreme Court, the Court of Appeal, and selected High Courts, and selected regulatory instruments. NigeriaLII is operated by the Oxford University Human Rights Hub in partnership with Nigerian institutions and is part of the global Free Access to Law Movement. For mortgage professionals, NigeriaLII is an invaluable resource for verifying the text of legislation, locating judicial decisions on land and mortgage law, and monitoring legislative developments.

Law Pavilion (www.lawpavilion.com) is a subscription-based Nigerian legal research platform that provides access to a comprehensive database of Nigerian case law, legislation, and secondary materials. It offers advanced search functionality, case digests, subject indexes, and citation analysis tools. Law Pavilion’s Prime database is widely used by legal practitioners and contains over 60,000 reported decisions of Nigerian courts. The platform also provides electronic law reports and a legislation tracker that alerts subscribers to new enactments and amendments. For mortgage professionals who require detailed case law research—for example, to determine the current judicial interpretation of a specific provision of the Land Use Act—Law Pavilion is the most comprehensive tool available.

Mondaq (www.mondaq.com) is a global platform for professional legal and regulatory analysis. It hosts articles, commentaries, and client advisories written by Nigerian law firms and covering a wide range of topics relevant to land and mortgage transactions, including recent legislative developments, regulatory changes, judicial decisions, and market trends. Mondaq’s content is produced by practising lawyers and is typically published within days of the relevant legal development, making it a useful resource for staying current with the rapidly evolving Nigerian legal landscape. The platform’s Nigeria-specific content includes regular updates on land registration reforms, mortgage market developments, CBN regulatory changes, and tax legislation amendments.

KEY TAKEAWAYSThe 1999 Constitution provides the foundation for land rights through sections 43 (right to acquire property), 44 (compulsory acquisition and compensation), and 315(5) (entrenchment of the Land Use Act).The Land Use Act 1978 occupies a position of operational supremacy in land transactions, and its constitutional entrenchment under section 315(5) has rendered it practically unamendable since 1978.Governor’s consent under section 22 of the Land Use Act is a substantive condition of validity; a mortgage without consent is null and void ab initio (Savannah Bank v.

Ajilo, 1989).The Conveyancing Act 1881 applies in the former Northern Region and states without local conveyancing legislation; the Property and Conveyancing Law 1959 applies in the former Western Region states.Lagos State has enacted modern, jurisdiction-specific legislation: the Mortgage and Property Law 2010 and the Land Registration Law 2015.Islamic law governs succession, waqf, gifts (hiba), and pre-emption (shuf’a) in northern states, creating additional due diligence requirements.Transaction-specific statutes—Stamp Duties Act, Capital Gains Tax Act, Administration of Estates Laws—impose obligations that apply to all land transactions irrespective of jurisdiction.Judicial precedent (Savannah Bank v.

Ajilo, Ukeje v.

Ukeje, Abioye v.

Yakubu, AG Bendel v.

Aideyan) establishes binding principles on consent, gender equality, deemed grants, and compensation.CBN Guidelines, the FCCPC Act 2018, and MBAN Codes of Practice form the regulatory layer governing mortgage origination, consumer protection, and professional standards.Digital research platforms—NigeriaLII, Law Pavilion, and Mondaq—are essential tools for accessing primary legal materials and staying current with legislative and judicial developments.

Self-Assessment Knowledge Check

Test your understanding of the material covered in this lesson by selecting the best answer for each of the following ten questions.

1. Section 315(5) of the 1999 Constitution has the effect of:

   1. Repealing the Land Use Act 1978
   2. Entrenching the Land Use Act so that it can be amended only by the procedure for constitutional amendment
   3. Granting the President exclusive authority over all land in Nigeria
   4. Exempting land transactions from stamp duty

2. In Savannah Bank v. Ajilo (1989), the Supreme Court held that a mortgage without Governor’s consent is:

   1. Voidable at the option of the mortgagor
   2. Valid but unregistrable at the Lands Registry
   3. Null and void ab initio
   4. Enforceable if the mortgagee acted in good faith

3. The Property and Conveyancing Law 1959 applies in:

   1. All 36 states and the FCT
   2. The states carved from the former Western Region, including Lagos
   3. Only the Federal Capital Territory
   4. The states of the former Northern Region

4. The Conveyancing Act 1881 was received into Nigerian law as:

   1. A local enactment of the Northern Regional Legislature
   2. A statute of general application in force in England on 1 January 1900
   3. A regulation issued by the Central Bank of Nigeria
   4. An international treaty ratified by Nigeria

5. The Lagos State Mortgage and Property Law 2010 provides for:

   1. The abolition of all mortgages in Lagos State
   2. A streamlined procedure for the creation of legal mortgages, codified remedies, and mortgage-backed securities regulation
   3. The transfer of all land in Lagos to the Federal Government
   4. The exemption of Lagos State from the Land Use Act

6. In AG Bendel v. Aideyan (1989), the Supreme Court held that compensation upon revocation of a right of occupancy is limited to:

   1. The full market value of the land and improvements
   2. The value of unexhausted improvements on the land
   3. Ten per cent of the market value
   4. The original purchase price paid by the holder

7. Under the Stamp Duties Act, an instrument that is not duly stamped:

   1. Is automatically void and of no effect
   2. Shall not be admitted in evidence in any civil proceedings
   3. Attracts criminal liability for the parties
   4. Must be re-executed within 90 days

8. The Islamic concept of shuf’a is best described as:

   1. A charitable endowment of land
   2. The right of a co-owner or neighbour to purchase a property in priority to a third-party buyer
   3. A form of land tax imposed by the Emir
   4. A grant of land by the ruler to a subject

9. The CBN’s Revised Guidelines for Primary Mortgage Banks prescribe a maximum loan-to-value ratio of:

   1. 100 per cent for residential and 90 per cent for commercial
   2. 80 per cent for residential and 70 per cent for commercial
   3. 50 per cent for all mortgage facilities
   4. No maximum ratio is prescribed

10. NigeriaLII is best described as:

    1. A subscription-based legal database operated by Nigerian law firms
    2. A government agency responsible for land registration
    3. A free, publicly accessible online repository of Nigerian legal materials
    4. A regulatory body that licenses mortgage brokers

Answer Key

Answers: 1. (b) | 2. (c) | 3. (b) | 4. (b) | 5. (b) | 6. (b) | 7. (b) | 8. (b) | 9. (b) | 10. (c)

Detailed Explanations

1. Section 315(5) of the 1999 Constitution entrenches the Land Use Act by providing that it can be amended or repealed only in accordance with the procedure for constitutional amendment, which requires a two-thirds majority in both chambers of the National Assembly and the approval of two-thirds of state Houses of Assembly.

2. In Savannah Bank v. Ajilo, the Supreme Court held that a mortgage without Governor’s consent is null and void ab initio—a complete nullity—not merely voidable or irregular.

3. The PCL 1959 was enacted by the Western Regional Legislature and applies in the states carved from that region: Lagos, Ogun, Oyo, Osun, Ondo, and Ekiti.

4. The Conveyancing Act 1881 was received into Nigerian law as a statute of general application in force in England on 1 January 1900 and continues to apply in states without local replacement legislation.

5. The Lagos State Mortgage and Property Law 2010 consolidated and modernised mortgage law in Lagos, introducing a streamlined procedure for creating legal mortgages, codifying the mortgagee’s remedies, and regulating mortgage-backed securities.

6. In AG Bendel v. Aideyan, the Supreme Court held that the Land Use Act limits compensation upon revocation to the value of unexhausted improvements, not the market value of the land.

7. Under section 22 of the Stamp Duties Act, an unstamped instrument is inadmissible in evidence in civil proceedings, though it may be stamped late upon payment of a penalty.

8. Shuf’a is the Islamic law concept of pre-emption: the right of a co-owner or adjoining neighbour to acquire property in priority to a third-party buyer at the same price.

9. The CBN’s Revised Guidelines for Primary Mortgage Banks prescribe a maximum LTV ratio of 80 per cent for residential and 70 per cent for commercial mortgage facilities.

10. NigeriaLII is a free, publicly accessible online repository of Nigerian legal materials, including legislation and judgments, operated in partnership with Oxford University as part of the Free Access to Law Movement.

References and Further Reading

Legislation

Constitution of the Federal Republic of Nigeria 1999 (as amended), ss. 1(3), 43, 44, 315(5).

Land Use Act 1978 (Cap. L5, Laws of the Federation of Nigeria 2004).

Conveyancing Act 1881 (44 & 45 Vict., c. 41) [received as statute of general application].

Property and Conveyancing Law 1959 (Western Region, Cap. 100).

Mortgage and Property Law 2010 (Lagos State).

Land Registration Law 2015 (Lagos State).

FCT Act (Cap. F6, Laws of the Federation 2004).

Stamp Duties Act (Cap. S8, Laws of the Federation 2004).

Capital Gains Tax Act (Cap. C1, Laws of the Federation 2004).

Administration of Estates Laws (various states).

Petroleum Act 1969 (Cap. P10, Laws of the Federation 2004).

Oil Pipelines Act 1956 (Cap. O7, Laws of the Federation 2004).

Federal Competition and Consumer Protection Commission Act 2018.

Kano State Sharia Courts Law 2000.

Land Instruments Registration Law (Cap. 76, Laws of Anambra State 1991).

Case Law

Savannah Bank v. Ajilo (1989) 1 NWLR (Pt. 97) 305 (Supreme Court of Nigeria).

Ukeje v. Ukeje (2014) LPELR-22724(SC) (Supreme Court of Nigeria).

Abioye v. Yakubu (1991) 5 NWLR (Pt. 190) 130 (Supreme Court of Nigeria).

AG Bendel v. Aideyan (1989) 4 NWLR (Pt. 118) 646 (Supreme Court of Nigeria).

Anekwe v. Nweke (2014) LPELR-22697(SC) (Supreme Court of Nigeria).

Owonyin v. Omotosho (1961) 1 All NLR 304 (Supreme Court of Nigeria).

Regulatory Instruments

Central Bank of Nigeria, Revised Guidelines for Primary Mortgage Banks (2014, as amended).

Central Bank of Nigeria, Framework for the Regulation of Housing Finance in Nigeria (2019).

Federal Competition and Consumer Protection Commission, Guidelines on Fair Lending Practices (2020).

Mortgage Banking Association of Nigeria, Code of Mortgage Practice (2021).

Secondary Sources

Oluyede, P. A. O. (1998). Nigerian Land Law and Conveyancing. Ibadan: Evans Brothers.

Elias, T. O. (1971). Nigerian Land Law. London: Sweet & Maxwell.

Yadudu, A. H. (1993). "Colonialism and the Transformation of the Substance and Form of Islamic Law in the Northern States of Nigeria." Journal of Law and Religion, 9(1), 17–47.

Nwogugu, E. I. (2020). Law of Real Property in Nigeria (2nd edn). Lagos: University of Lagos Press.

World Bank (2020). Land Governance Assessment Framework: Nigeria Country Report. Washington, DC.

Central Bank of Nigeria (2024). Financial Stability Report (December 2024). Abuja.

Federal Inland Revenue Service (2023). Annual Report and Accounts 2023. Abuja.

IMBL of Nigeria (2025). Mortgage Practice Standards and Compliance Manual. Lagos.

Digital Research Platforms

Nigerian Legal Information Institute (NigeriaLII): www.nigerialii.org

Law Pavilion: www.lawpavilion.com

Mondaq: www.mondaq.com

Document Metadata

Course: Module 3 – Mortgage, Real Estate Laws & Regulations in Nigeria (Part A)

Lesson: Lesson 7 – Laws Applicable to Land Transactions

Word Count: Approximately 5,000+ words

Institution: IMBL of Nigeria

Format: LMS-ready certification material

Date: April 2026

IMBL Nigeria Certification | Page