Introduction
CONTRACT OF SALE OF LAND AND WHAT IT TAKES
One of the few assets that can bring in money for its owners without the owners needing to do any labor themselves is land. Landed property appreciates on its own, hence it has always been the subject of transfers, assignments, leases, and mortgages because of this.
Landed property conveyance is very important. It goes much beyond just buying the land and taking ownership; thus, every buyer must make a conscious effort to safeguard their investments with supporting documentation and legal arguments. Every buyer wants to obtain the correct title documents when purchasing land and ensure that the seller’s title is properly transferred to him. Legal professionals frequently need to write contract of sale agreements for parties, and it is occasionally unclear to parties because they must sign a contract of sale agreement rather than a deed of assignment.
WHAT IS CONTRACT OF SALE
In International Textile Industries Limited v. Aderemi (1999), 8 NWLR Part 614, 268 the Supreme Court ruled that the transfer of an interest in land can be broken down into two portions, namely.
The contract stage
The conveyance stage.
A contract for the sale, or other disposition, of an interest in land is void unless it complies with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (LP(MP)A 1989). This provides that it must:
Be in writing
Contain or incorporate all of the terms expressly agreed by the parties in one document or, where contracts are exchanged, in each, and
Be signed by or on behalf of each of the parties to it
At the contract stage, the parties sign a document called a contract of sale agreement. The parties have already agreed to transfer ownership of the property, but some agreements have not yet been reached. There’s always a chance that the parties are still looking into the origins of the titles, the buyer is still making payments in instalments, the parties haven’t decided on the fixtures and amenities that will go on the property, the reversionary interest, etc.
The contract of sale agreement’s legality depends on fundamental contract principles like offer, acceptance, considerations, etc. Once these basic guidelines have been established, it can be argued that the parties have reached the contract stage and should now proceed to execute the contract of sale agreement.
There are three fundamental elements that must be included in any contract of sale agreement: the parties’ contact information, a description of the property, and the purchase price they have agreed upon. Although the buyer may have made a down payment, a portion of the purchase price, or the entire amount at the time the parties sign the contract of sale, the buyer is not yet considered the property’s legal owner.
The buyer continues to own all legal rights to the property. But that does not provide the seller the authority to transfer the property to a third party. The buyer will have an equitable claim to the property, be able to occupy the space, and have the legal authority to complete the title paperwork. The buyer will have the opportunity to place a lien on the property and protect it against future buyers’ interests.
The West Africa Court of Appeal stated at page 224 in Ogunbambi v. Abowab, (1951) 13 WACA 222 Per Acting President, that any document that contains the essential elements of a contract of sale described earlier is “an agreement for sale coupled with a receipt for purchase money and a covenant to execute a conveyance on demand: Equity is said to look as done that which ought to be done.
As a result, even though you will be in possession of the land when your lawyer creates the contract of sale agreement, you won’t actually own it until that point, but you will be 90% there. For a buyer who wants to pay the purchase price in instalments or who does not want to lose the property during the negotiation process, a contract of sale agreement is always ideal.
As a result, even though you will be in possession of the land when your lawyer creates the contract of sale agreement, you won’t actually own it until that point, but you will be 90% there. For a buyer who wants to pay the purchase price in instalments or who does not want to lose the property during the negotiation process, a contract of sale agreement is always ideal.
There will be a lien put in place in the buyer’s Favour, and the seller won’t be able to back out. On the other hand, the seller will continue to be the rightful owner and be able to demand specific performance if the buyer doesn’t pay. Additionally, the seller retains the ability to file a claim against the seller to reclaim possession.
NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only.
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