SALE OF LAND PART 1

Franklin D. Roosevelt, US
president
• Real estate cannot be lost or
stolen, nor can it be carried
away. Purchased with common
sense, paid for in full, and
managed with reasonable care,
it is the safest investment in the
world
 LEARNING OUTCOMES
At the end of the lesson, students would
be able to:
• Mention legal restrictions or
limitations to sale of land
• List the various steps or stages in the
sale of land
• Explain the need for pre-contract
enquiries
• Mention various types of contract
of sale of land
• State the principles governing
each type of contract of sale of
land
• Apply the principles governing
each type of contract of sale of
land to given case
• State the procedure for and effect
• Capacity of solicitor to act for
both parties
• Draft a formal contract of sale of
land
• Identify the challenges posed by
unregistered conveyances
• Identify remedies to parties for
breach of contract of sale
 legal restrictions or
limitations to sale of land
1. Legislative restriction
• s. 22 LUA (Governor’s consent)
• Abioye v Yakubu (1991) 5 NWLR (Pt 190)
130
• S. 21 LUA
2. s. 7. restriction on rights of persons under
the age of 21 years
3. Prohibition of division of rural land
into plots. Section 36(5) LUA
4. Limit on ownership of undeveloped
land. Section 34(5) & (6) LUA
5. s. 46. Approval from National Council
of States to grant rights of occupancy to
non nationals – whether statutory or
customary
6. Some legislation provides for consent-
Nigerian Coal Authority Act, s. 12(4)
 Contractual restriction
6. Restrictive covenants
a. Not to assign without consent
b. Restriction that mortgagor shall not
part with possession without consent of
mortgagee
c. Restriction as to land subject to
customary law, e.g. communal of family
land (community head or family head)
• 7. Lis pendens
Implicit in the doctrine of lis pendens
is that a buyer who purchases a property
still subject of a determination of the
court has bought a big trouble as the
outcome can be against the vendor
Olori Motors Co. Ltd v UBN Plc
(2006) 10 NWLR (Pt 989) 586 at 610
8. Town planning regulations
 PROBLEMS OF
CONVEYANCING in Nigeria
•Difficulty of investigating title
•Failure to consult solicitors
•Professional incompetence
•Fraudulent activities of sellers
•Problems of the LUA
•Non uniformity of applicable laws
 CONTRACT OF SALE
• Is the initial stage of
transfer of title to land
• It precedes conveyance
• It is an agreement to sell
and buy land
STEPS IN CONVEYANCING
• Pre-contract
• Contract of sale
• Post contract
• Completion, and
• Post completion matters
• Pre-contract stage
–Pre-contract inquiries
–Negotiation
• Contract stage
–Agreement on terms of sale
–Preparation and execution of the
formal contract of sale
–Payment of deposit
–Exchange of contract
• Post contract stage
– Deducing title
–Investigating title
–Raising requisitions, if necessary
–Writing a search report
• Completion stage
–Preparation and execution of the Deed of
Assignment
–Payment of balance of purchase price
–Transmission of original title documents and
relevant documents from the Assignor to the
Assignee
 Post completion stage
–Governor’s consent
–Stamping
–Registration
ADVANTAGES OF Contract Of
Sale
• It prevents unexpected increase on
purchase price (gazumping)
• It affords purchaser opportunity to
investigate title of vendor
• It is a valuable document in the
hands of both parties
• It gives collateral advantages.
– The parties can confer special privileges
on each other, such as possession before
completion given to purchaser
• It prevents parties withdrawing
midstream from the contract
• It could be used to take care of
fixtures and fittings and thus reduce
the stamp duty payable on the
property at perfection stage
• The position of parties is made
more certain
• The death of any party will not
affect the completion of the
transaction
• By doctrine of conversion, a
vendor or his successor’s interest
is in terms of money (outstanding
purchase price) and not the land
 Pre-contract inquiries
• Preliminary inquiries
–Title would be investigated at a
later stage but preliminary
investigation are carried out to
verify the physical state of the
land
–Boundaries
 –Compliance with town planning
laws
–The vendor is under no obligation
to disclose any latent defects
unless by act or implication he
represents such defects not to
exist
–Caveat emptor
• Negotiation of price
Importance of pre-contract inquiries

–It helps to disclose latent defects

on the property
–It ascertains the suitability or
otherwise of the property based
on the proposed use
–It helps in deciding on whether
or not to enter negotiation
TYPES OF CONTRACT
OF SALE
• Oral contract
–Not enforceable
–Section 4 Statute of Frauds 1677
–Section 5(2) Law Reform
(Contracts) Act 1961
–Deposit is not recoverable
 EXCEPTIONS
• Alienation under customary law
–Key features:
Price
Possession
Witnesses
Alake v Awawu (1932) 11 NLR
• Sufficient acts of part
performance
–International Textile
Industries (Nig) Ltd v Aderemi
(1999) 8 NWLR (Pt 614)
–Aminu v Ogunyebi (2004)
–10 NWLR (Pt 882) 457
 OPEN CONTRACT
• It is enforceable once it contains
the essentials of;
–Parties
–Price, and
–Property
–Signed by the party to be
charged
FORMS of open contract
• Letter
–Akpara v UAC (1951) 20
NLR 17
• Receipt
• Yaya v Morgaji (1947) 12
WACA
• Rough draft of agreement
Gray v Smith (1889) 43 CH.D
208
• Joinder of document
Okoro v Ogara (1964 ) All
NLR 99
Telegram
Written offer
Defect of an open contract:

Lack of terms, thus, terms

are uncertain
Courts determine facts of
each case
 FORMAL CONTRACT
• EXPRESS stipulation of terms
by parties beside formal
requirements
• Prepared by the vendor’s
solicitor
 CONTENTS OF A
FORMAL CONTRACT
• Parties
• Date of completion
• Deposit or part payment
• Balance and interest on
unpaid purchase price
• Capacity of vendor
• Fittings and fixtures
• Vacant possession
• Possession before completion
• Insurance pending completion
Where solicitor acts for both parties
• The title is sound
• Parties have given their consent
• There is no likelihood of conflict of
interest on the part of the solicitor
• Consideration is small
• Where terms and conditions of the
transaction are already agreed upon,
settled and no likelihood of dispute
 Exchange of contract
• A contract of sale takes effect upon
exchange
• Vendor’s solicitor prepares and sends to
the purchaser’s solicitor for perusal and
amendment if necessary
• Once terms are agreed on, copies are
prepared and sent to purchaser’s
solicitor for purchaser’s execution
• Physical exchange is done in the
office of the vendor’s solicitor
• Where parties agree on post,
exchange is completed once
parties post their respective
copies and not when received
–Domb v Isoz (1980)1 AER 941
Where a solicitor represents
both parties
• No need to exchange contract
• Once executed by the parties,
exchange is effected
• It becomes binding
 Position of parties after
exchange of contract
• Purchaser acquires equitable interest in
property
• Death of either party does not affect the
transaction
• Vendor becomes trustee of a legal estate and
liable for breach of trust
• Vendor has a lien on property
 CONTRACT FOR SALE OF
LAND
• THIS AGREEMENT is made
this……………………………day
of……………………..2021 BETWEEN
…………….Dr Chinelu Bankele of No
5 Aminu Kano Crescent, Wuse II, Abuja
FCT (“The Vendor”) of the one part AND
Princess Franca Danjuma of Wadata
Plaza, Wuse Zone 5 (“The Purchaser”) of
the other part.
IT IS AGREED AS FOLLOWS:
• That the Vendor sells and the Purchaser buys ALL
THAT property situated at No 10 ECOWAS Crescent,
Asokoro, Abuja FCT covered by C of O No
ABJ/123/93 dated1st July 1993 subject to the
following terms and conditions:
– The consideration for the sale of the property is
N420,00,000.00 (four hundred and twenty million) naira
only.
– The sale includes fixtures and fittings and other items
specified in the schedule to this agreement which the
purchaser pays the sum of N3,000,000.00 (three million)
naira only.
• The sum of N24,000,000.00 (twenty four million)
naira shall be paid by the purchaser as deposit to
Chinda Fyne country Esq of Chinda & Associates,
3 Aso Crescent, Maitama, Abuja FCT upon the
exchange of contract who shall hold the deposit as
stakeholder pending completion
• The Vendor sells as beneficial owner PROVIDED
and it is hereby agreed that the covenants which
are by law implied by reason of assigning as
beneficial owner shall not be deemed to imply that
the Vendor has performed covenants for repairs
contained in the Vendor’s document of title
• The property is sold after its inspection by the
purchaser who agrees to purchase it as a result of
the inspection and on the basis of the terms
contained in the agreement without reliance on
any representation or warranty expressly or
impliedly made by or on behalf of the Vendor.
• The purchase shall be completed on 31 st March,
2021 when vacant possession of the property
except the boys quarters whose tenancy shall
expire on 31at July 2021 shall be given to the
Purchaser PROVIDED that upon default or
punctual completion, the party on default shall be
liable to pay interest at the rate of 22%.
• That the vendor agrees to execute in favour of the
purchaser, a deed of assignment and such other
documents as are required to vest legal title in the
purchaser and also to obtain the consent of the Governor
pursuant to the requirements of the Land Use Act 1978.
• The vendor agrees to indemnify the purchaser for any
loss incurred, money expended or damages suffered in
the event of defect in the vendor’s title.
• The purchaser shall pay all cost incidental to the
preparation and execution of this agreement and any
further instruments necessary and proper for carrying this
agreement into effect.
• The vendor shall insure the property in his name and the
purchaser shall pay the premium.
IN WITNESS WHEREOF the parties have set their hands and common
seal the day and year first above written.
SCHEDULE
All that property covered by Title No ABJ/123/93 and all instruments of
registration executed on the said properties up to the present Assignor.
 
Signed by the Vendor
 
……………………………………………………….
Chinelu Bankele

IN THE PRESENCE OF:

NAME:………………………………………………
ADDRESS:………………………………………….
OCCUPATION:…………………………………….
SIGNATURE:……………………………………….
 
Signed by the Purchaser

……………………………………………………….
Princess Franca Danjuma

IN THE PRESENCE OF:

NAME:………………………………………………
ADDRESS:………………………………………….
OCCUPATION:…………………………………….
SIGNATURE:……………………………………….
 
 
PREPARED BY:
CHINDA FYNECOUNTRY ESQ
CHINDA & ASSOCIATES
3 ASO CLOSE, MAITAMA
ABUJA FCT