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NLS - Property Law Practice > SALE OF LAND > Flashcards

SALE OF LAND Flashcards

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1
Q

Legislative restrictions on Sale of Land in Nigeria

A
  1. Governors consent - S22 Land Use Act
  2. Age - S7 Land Use Act prohibits Gov from granting statutory right of occupancy to persons under 21
  3. Ministers consent - prerequisite for valid alienation of land belonging to gov ministry
  4. Aliens - S46(1) Land Use Act alien cannot be granted statutory right of occupancy without approval of National Council of States
  5. Town planning laws
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2
Q

Contractual restrictions on Sale of Land

A
  1. Customary law: Head of Family’s consent needed
  2. Restrictive convenants
  3. Lis Pendens: no transfer of interest in land subject to litigation
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3
Q

Types of contract for Sale of Land?

A
  1. Oral
  2. Open
  3. Formal
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4
Q

When is an oral contract valid?

A

GENERAL RULE: Oral contract for Sale of Land prohibited as S4 Statutes of Fraud Act requires all contracts for sale of land to be in writing

EXCEPTION: Sale of Land under native law and custom

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5
Q

Requirements for recognition of oral contract?

A
  1. Payment of purchase price
  2. Possession by Purchaser
  3. Presence of witnesses during the transaction

ADEDEJI V OLOSO

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6
Q

Terms in an open contract?

A
  1. Parties
  2. Property
  3. Price
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7
Q

Examples of open contracts?

A
  1. Written notes
  2. Receipts
  3. Memos
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8
Q

Can a bona fide purchaser with receipt acquire interest that defeats a subsequent purchaser holding legal title?

A

Receipt is purchasers equitable right to property, combined with possession it may defeat the legal title of a subsequent buyer with knowledge of the equitable interest in land

KACHALA V BANKI

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9
Q

When is a contract said to be exchanged?

A
  1. When the parties have signed it

2. The signed contract is in actual possession or control

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10
Q

What are the effects of exchange of contract?

A
  1. Equitable interest vested in favour of the purchaser
  2. Vendor made trustee of purchaser in respect of equity of purchaser
  3. Purchaser may transfer equity to another
  4. P may sue V for specific performance or completion of transfer
  5. Vendor entitled to rents and profits until completion though he must account to the Purchaser (as he still holds legal interest)
  6. Death of either party does not affect the contract
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11
Q

Contents of formal contract

A
  1. Date of completion
  2. Deposit
  3. Balance and interest on unpaid purchase price
  4. Possession before completion
  5. Vacant possession
  6. Fixtures and Fittings
  7. Insurance
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12
Q

Advantages of formal contract

A
  1. Purchaser has more time to investigate title before execution of Deed of Assignment
  2. Party withdrawing from the contract will be liable for breach
  3. Rights and positions of parties are expressly states so no uncertainty
  4. Death of either party will not terminate contract as PRs can execute
  5. Fixtures and fittings may be transferred under contract this ensuring payment of stamp duty on deed of assignment charges only on real property
  6. Prevents gazumping (increase of price)
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13
Q

Remedies for breach of contract

A
  1. Non-defaulting party may repudiate the contract is breach is fundamental
  2. Non-defaulting party may institute action in court for damages
  3. Non-defaulting party may set side contract - rescission
  4. Specific performance
  5. Is Vendor is at fault may forfeit deposit paid and purchaser may recover the deposit
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14
Q

How important is the date of completion in a contract?

A

GENERAL RULE: time is not of essence in a transaction, however must be done within reasonable time

If parties fail to agree on date, law implies that completion is to take place within reasonable time - to be determined on the merits of each case

JOHNSON V HUMPHREY

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15
Q

What can a purchaser do to show his intention to complete the purchase of the property?

A

Pay a deposit as security

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16
Q

What happens where the purchaser changes his mind after paying deposit?

A

The deposit is forfeitable

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17
Q

What is the rate of deposit?

A

10% although parties may agree to a higher or lower amount

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18
Q

What is the implication of paying the deposit to the Vendor’s solicitor in the absence of any general or spiffing instructions?

A

Solicitor holds it as the Vendor’s agent

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19
Q

If a solicitor acts for both the vendor and purchaser in relation to deposit he does what?

A

Holds the deposit as a stakeholder

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20
Q

What are the advantages of paying the deposit to the Vendor’s solicitor as a stakeholder?

A
  1. Solicitor holds the money as a trustee
  2. Personally liable if he misused the money and so has a personal responsibility to keep the money safe
  3. In event of default, he is to pay the money to the non-defaulting party
  4. Not required to pay interest on the money for the duration the money remains in his custody.
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21
Q

In what instances may a solicitor act for both parties?

A
  1. Title to property is sound
  2. Transaction involves little consideration
  3. Parties are related
  4. Parties consent
  5. No other lawyer in vicinity

SMITH V MANSI

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22
Q

Difference between deposit and part-payment

A

DEPOSIT:
Token payment, usually non-refundable in event of default, form of security

PART PAYMENT:
Portion of purchase price, indicates that the payment has been finalised

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23
Q

What is the effect of a failure to pay the balance of a part payment on the agreed date?

A

If a part payment was made, the only option is specific performance. The Vendor cannot rely on default to withdraw from contract
*also delayed payment, common law presumption that interest rate fixed at 4%

Compare with deposit - can withdraw

24
Q

Can a purchaser take possession before completion?

A

GENERAL RULE: property delivered on completion. But where a P takes possession before completion, solicitor to ensure that he takes does so as licensee or as a tenant at will.

Failure to do so will lead to presumption that he takes possession as a tenant and he is entitled to statutory notices if the vendor wishes to evict him in event of default.

25
Q

Where does risk lie after exchange of contract before completion?

A

Generally, risk is transferred to the purchaser so vendor has no duty to insure

26
Q

What must the parties decide in terms of insurance?

A
  1. WHO to insure
  2. RISK to insure against
  3. APPLICATION of insurance money
  4. Insurance company
  5. AMOUNT to cover
27
Q

What is the implication of the Vendor insuring the property in his name?

A

He has the right to collect monies paid upon damage of property and cannot be compelled by the purchaser to use money to repair the property

ONLY EXCEPTION: if property is destroyed by fire: Insurance Act

28
Q

Stages in conveyance of land?

A
  1. Pre-contract stage
  2. Contract stage
  3. Post-contract stage
  4. Completion stage
  5. Post-completion stage
29
Q

What activities take place at pre-contract stage?

A

Pre-contract enquiries and preliminary investigation

30
Q

What is the importance of pre-contract enquiries?

A

Obtain full information that will guide decision on whether to enter contract.

May reveal patent defects (vendor not under duty to disclose these, only latent defects)

31
Q

Consequence of misrepresentation by vendor?

A

Liable for damages arising from misrepresentation

32
Q

Examples of questions asked during pre-contract stage?

A
  1. Boundaries of property
  2. Guarantees in respect of property
  3. Reversionary title or interest
  4. Insurance policy
  5. Disputes over property
  6. Service charge
  7. Convenants
  8. Facilities of the property
33
Q

What events happen at the contract stage?

A

Preparation of contract and exchange of contract

34
Q

Who drafts contract of sale of land?

A

Vendor’s solicitor

35
Q

What events occur at the post-contract stage?

A
  1. Deducing of title by Vendor
  2. Requisition of title
  3. Investigation of title
  4. Writing of search report
36
Q

What does it mean to deduce title?

A

After exchange, vendor shows he has good title

37
Q

What is good title?

A

CA: 40 years

PCL: 30 years

38
Q

What is the principle in the case of Majekodunmi v Abina ?

A

In Lagos state, the right of an owner of land ceases after 12 years of adverse possession but its must first be established that the owner has been dispossessed or has discontinued possession

39
Q

What is an abstract of title?

A

Contains a review of previous owners, liens, encumbrances, mortgages, easements or any other matter that affects ownership of the property

40
Q

What is epitome?

A

Contains a schedule of documents and events which constitute the title and is accompanied by photocopies of the documents

41
Q

What purpose do the abstract and epitome of title serve?

A
  1. Helps purchaser solicitor make réquisitions of title
  2. Prima facie evidence of defect in title
  3. Assists the purchasers solicitor when writing search report
42
Q

Elements of a good root of title

A
  1. Establish both legal and equitable ownership of land
  2. Adequately describe the property
  3. Clearly state or describe owner
  4. Nothing on the face of it to cast doubt on its authenticity
  5. Must not be subject to a higher interest
43
Q

Examples of good root of title?

A
  1. Deed of assignment
  2. Deed of Legal Mortgage
  3. Deed of gift
  4. Certificate of purchase
  5. Registered title
44
Q

Bad roots of title?

A
  1. Lease
  2. Equitable mortgage
  3. Will
  4. Certificate of occupancy
  5. Power of attorney
45
Q

Can a Certificate of Occupancy be a good root of title?

A

Soho v Foreign Finance - SC helps that a Certificate of Occupancy may be good root of title if issued in case of state land.

Certificate of Occupancy is a document showing prima facie right of occupancy however may be rebutted by someone with a better title to the property.

46
Q

What steps will you take to investigate title?

A
  1. Physical inspection
  2. Traditional Evidence: consent of Head of Family
  3. Search at the Land Registry
  4. Search at Companies Registry
  5. Search at Probate Registry
  6. Search at Court Registry
47
Q

What activities take place at the completion stage?

A
  1. Preparation of deed of assignment

2. Preparation of a completion statement

48
Q

What is a completion statement?

A

Statement of the financial commitment of the parties and any financial obligation they are expected to meet towards a successful completion of the transaction.

49
Q

Who prepares the completion statement?

A

Assignor’s solicitor

50
Q

Who prepares the deed of assignment?

A

Assignee’s solicitor

51
Q

What does Vendor usually hand over to the purchaser at the completion stage?

A
  1. Keys
  2. Copies of executed documents
  3. Certificate of Occupancy
  4. Survey plan
  5. Receipts
  6. All prior original copies of title documents relating to the land
52
Q

What activities take place in post-completion stage?

A
  1. Obtaining Governor’s consent
  2. Payment of Stamp duty
  3. Registration of title
53
Q

Who applies for Governor’s consent?

A

Holder of a right to occupancy has duty to obtain.

However, in practice, purchaser usually applies for Governor’s consent as he’s the party who has more to lose if the transaction fails

54
Q

What is the effect of failure to pay stamp duties on deed of assignment?

A
  1. It is not registrable
  2. It is inadmissible in court as evidence
  3. Penalty for late stamping

S22 STAMP DUTIES ACT

55
Q

Why would you advise your client to register his title to land?

A
  1. An indication that the tingle is encumbered
  2. It is admissible as evidence in court when registered
  3. It gives priority to the registered title holder where there are rival titles

*registration does not cure defect in instrument being registered, merely gives notice of defect

NLS - Property Law Practice (10 decks)

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