8.1.1 Statutory Restrictions Under the Land Use Act

Section 22 — holders of statutory rights of occupancy shall not alienate by assignment, mortgage, transfer of possession, sublease, or otherwise without the Governor’s consent. Acting without consent renders the transaction void.

Section 21 — customary rights of occupancy; alienation requires consent of the local government authority that granted the right. Same penalty: void.

8.1.2 Other Restrictions on Alienation

• Lease covenants — prohibition on assignment/subletting without landlord’s consent
• Trust restrictions — Trustee Investments Act and trust instrument limits
• Court orders — injunctions, lis pendens notices
• Bankruptcy and insolvency — property vests in Official Receiver
• Family property — customary law requires consent of family head and senior members

8.1.3 Implications for Mortgage Lending

Governor’s Consent is a condition precedent to valid creation of a mortgage. Lagos consent processing can take 6 months to 2 years. Many lenders disburse against borrower undertaking + original C of O deposit + interim equitable mortgage. Lagos State Electronic C of O Platform has reduced processing times for some applicants.

8.2.1 Nature and Formation

Requirements: offer, acceptance, consideration (purchase price), intention to create legal relations, capacity.

Statute of Frauds 1677 (Section 4) + Section 67 of the Property and Conveyancing Law (Cap P13, Laws of Lagos State 2015): contract for sale of land must be in writing or evidenced by memorandum in writing. An oral agreement is unenforceable (not void).

8.2.2 Open Contracts and Closed Contracts

Open contract — bare minimum terms; general law fills gaps.

Closed contract — detailed conditions of sale displacing/supplementing implied terms. Better for mortgage lending.

8.2.3 Terms of the Contract

• Parties — full names, addresses, capacity
• Property description — street address, survey plan, plot number, C of O number, area, boundaries
• Purchase price — stated or method for determining (no “to be agreed later”)
• Completion date — or reasonable time (3-6 months typical in Nigeria)
• Conditions precedent — title searches, Governor’s Consent, mortgage financing, mortgage discharge

8.2.4 Conditions and Warranties

Condition — goes to root of contract; breach allows rescission + damages + deposit recovery.

Warranty — lesser term; breach gives damages only, no rescission.

8.2.5 The Doctrine of Part Performance

Equity allows enforcement of oral contracts for sale of land where:
– An oral agreement exists, sufficiently certain
– Acts of part performance carried out, referable to the contract
– Classic acts: payment, possession, improvements
– Inequitable to allow other party to rely on lack of writing

8.3.1 Four Steps

1. Execution of the Deed of Assignment — signed, sealed, delivered, attested
2. Obtaining the Governor’s Consent — Section 22 LUA; Lagos cost ~3-6% of property value (₦2.5M-₦5.1M on ₦85M property)
3. Stamping — Stamp Duties Act (Cap S8, LFN 2004); unstamped deed inadmissible
4. Registration at the Land Registry — notice to the world; under Registration of Titles Law, unregistered instrument may be void against subsequent registered interest

8.3.2 Consequences of Failure to Perfect

• No consent → purchaser holds only equitable interest; vulnerable to bona fide purchaser for value without notice
• Unstamped deed → inadmissible in court; late stamping attracts penalties
• Unregistered deed → invisible to public record; risk of double-selling

8.4.1 Subject to Contract Negotiations

“Subject to contract” — no binding obligation until formal contract executed.

Gazumping — vendor accepts higher offer from second buyer before contract signed.

Gazundering — buyer reduces offer just before exchange of contracts.

Solutions: lock-in agreements, exclusivity periods, pre-contract deposits.

8.4.2 Deposit and Stakeholder Arrangements

Typical deposit: 10% to 25% of purchase price.

The stakeholder (usually vendor’s solicitor) holds deposit on behalf of both parties. Distinction matters: if held as agent for vendor rather than stakeholder, the solicitor may release immediately and the purchaser’s only recourse is against the vendor.

Lenders typically advance 70-80% of property value; the borrower contributes the balance as equity, with the deposit forming part of that contribution.

Restrictions on disposition come primarily from the Land Use Act (Section 22 for statutory rights, Section 21 for customary rights). A valid contract of sale must be in writing, identify parties and property, state price and terms. Perfection of title requires deed execution + Governor’s Consent + stamping + registration. “Subject to contract” means no binding obligation until exchange. Deposits of 10-25% should be held by a stakeholder.

1. What is the legal consequence of a mortgage created without the Governor’s Consent under Section 22 LUA? Cite Savannah Bank v. Ajilo.
2. Explain the requirements for a valid contract of sale of land in Nigeria, including the writing requirement under the Statute of Frauds.
3. A purchaser entered an oral agreement to buy a plot in Abuja, paid ₦40M, took possession, and erected a fence. Advise on part performance.
4. Describe the four steps in perfecting title. For each, explain consequences of omission.
5. Borrower presents a 6-month-old Deed of Assignment with no consent, no stamping, no registration. What risks and required steps?