DIFFERENCE BETWEEN CONTRACT OF SALE AND DEED OF ASSIGNMENT
Both the contract of sale and the deed of assignment are legal documents used in Nigerian property transactions.
DIFFERENCE BETWEEN CONTRACT OF SALE AND DEED OF ASSIGNMENT
Both the contract of sale and the deed of assignment are legal documents used in Nigerian property transactions. The distinction between the two papers, despite the fact that they are both utilised in real estate transactions, may be found in their unique qualities and the roles that they each separately play in the acquisition of title to landed properties in Nigeria.
In Nigeria, the process of acquiring land typically involves five steps, from the pre-contract stage to the post-completion stage. The second stage of a land transaction involves the execution of the contract of sale, which is documented in writing but is not required to be sealed. It is a preliminary land document signed by both the seller and the buyer to transfer land ownership to the other party. Once it has been exchanged between the parties, a contract of sale comes into force and outlines not only the fundamental conditions but also the specific terms, payment, and obligations that the parties have agreed upon with regard to the purchase or sale of real estate. A contract of sale may include the following clauses:
Full details of the parties – (name and address).
Particulars of the property to be transacted (location, survey plan, etc).
Particulars of witnesses.
Purchase price of the property.
Payment of deposit, to whom it is to be paid, and in what capacity.
Balance and interest on unpaid purchase sum where the payment is to be paid in installments.
The capacity of the vendor.
Risk and insurance.
Possession before completion
Completion date of the transaction.
Provision for fixtures and fittings.
Specific terms, risks, etc.
When a contract of sale has been signed by both parties, the buyer has an equitable right to the title even if the seller still maintains the legal title to the property and is holding it in trust for the buyer. No vendor may deal with the land in a manner inconsistent with the terms of the contract, and no party may terminate the transaction without incurring liability for breach of contract.
CHARACTERISTICS OF A CONTRACT OF SALE
In a contract of sale, the vendor is committed to the transaction and the purchaser has sufficient time to investigate the title before the final completion of the transaction.
The death of either party to the transaction does not terminate the contract as personal representatives can proceed with the contract of sale.
A contract of sale prevents last-minute withdrawal as withdrawal would amount to a breach of the contract.
A contract of sale protects the equitable interest of the purchaser
It crystallizes the position of the parties as terms have been expressly agreed upon.
The vendor cannot unilaterally and subsequently increase the purchase price as the price has already been fixed in the contract.
Payment of lesser stamp duties.
On the other hand, the legal document known as a deed of assignment, which is subject to perfection, is signed by a buyer and a seller after the negotiation and closing stages of a sale of land transaction. It is typically required by the real estate buyer at the conclusion of the property transaction as the last legal document that conveys the interest of title in a land without any conditions attached, except from the payment of the consideration price of the property.
A deed of assignment and a contract of sale differ significantly in another important way: a deed of assignment requires the title to the land acquired to be perfected following the payment of the full consideration and execution of the deed. The assignee must complete the necessary actions to register the assignment deed with the relevant Land Registry in order for the title to be perfected. The following three stages are necessary for a deed of assignment to be perfected;
Obtaining Governors Consent.
Stamping of the deed of assignment, and
Registration of the deed of assignment.
Summarily, a contract of sale is the first document to be drafted in respect f any land purchase. When the buyer has made the full payment, the parties may go-ahead to prepare and execute the deed of assignment, also known as a deed of conveyance.
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. For information, please contact chamanlawfirm@gmail.com
WRITTEN BY CHAMAN LAW FIRM TEAM
EMAIL: chamanlawfirm@gmail.com
TEL: 08065553671, 08024230080