Crucial Insights: Understanding the Legal Restrictions to Sale of Land
Introduction
Land Use Act bestows allodial title in land (hitherto vested on the land owners) on the governor of the State and he holds it in trust for Nigerians-Abioye v Yakubu. What the Land Owners have is a Right of Occupancy which requires governor’s consent for valid alienation-See Section 22 and 23 LUA Kachalla v Banki. Section 1 LUA which converts hitherto unlimited rights to right of occupancy)-Abioye v Yakubu. Then Section 22 requires governor’s consent to be sought for alienation of interest in land-Savanah Bank v Ajiloh.
Illiterates Protection Law and Statute of Frauds, Conveyancing Act, Property and conveyancing law, etc. dealing with formal and substantive requirements like writing, execution, etc. Section 7 (requires parties to any alienation to have attained 21 years (unless guardian or trustee acts on his behalf), Section 46 which disentitles non-Nigerians from being granted a right of occupancy except with approval of the National Council of States.
1. Town Planning Laws and Regulations. Lagos State Urban and Regional Planing Law.
2. Contractual Restriction: these can come in form of agreements or covenants. E.g. Covenant not to assign lease (with or without consent), covenant that mortgagor shall not part with possession without consent of mortgagee.
3. Customary Law Restriction: e.g. Family land cannot be alienated without consent of Family head and principal members Ekpendu v Erika.
4. Properties held by ministries and statutory bodies may require additional consent of the Minister or authority in charge before alienation Rockonoh Property Co. Ltd v NITEL Plc.
5. Fraud, Misrepresentation, etc.
6. Liz pendens: where the court requires that the subject matter be preserved pending
subject matter be preserved pending determination of litigation.
Buying and selling land is one of the oldest forms of transaction known to humanity, but it is also one of the most legally regulated. The process of land sale is not simply a matter of two parties agreeing on a price and exchanging ownership; rather, it is governed by a complex web of legal restrictions that vary from jurisdiction to jurisdiction. Understanding the legal restrictions to the sale of land is crucial for buyers, sellers, investors, and even lawyers who are involved in property transactions. Without full compliance with these legal limitations, transactions may be rendered void or voidable, causing significant financial and emotional consequences for all parties involved.
Legal restrictions on the sale of land often stem from the need to ensure that ownership rights are transferred properly and that the land in question is legally capable of being sold. These restrictions also serve to protect public interests, third-party rights, and historical claims. For instance, there might be restrictions preventing the sale of communal land, government-acquired land, or land subject to existing mortgages or leases. In many jurisdictions, particularly in places like Nigeria, customary laws also play a significant role, adding another layer of complexity to land sales.
One of the most common legal restrictions is the requirement that certain formalities must be observed in any sale transaction. These formalities often include written contracts, execution of deeds, registration of title, and compliance with statutory requirements. Failure to adhere to these requirements could lead to disputes and even legal action. For instance, Section 4 of the Statute of Frauds requires that any contract for the sale of land must be in writing and signed by the parties to be legally enforceable. In countries like Nigeria, the Land Use Act also imposes statutory restrictions that must be observed when dealing with land sales.
In addition to formalities, there are substantive restrictions that affect the ability to sell land. One major category of substantive restrictions involves limitations arising from the nature of the land itself. Land may be designated for specific uses under planning laws—such as agricultural, residential, or commercial use—and selling land for a purpose inconsistent with its designated use may be unlawful. Also, land located within government acquisition zones or designated as public land cannot be freely sold without following prescribed governmental procedures.
Equally important are restrictions based on the seller’s title to the land. A seller must have a clear, marketable title to the property they intend to sell. If there are defects in the title, such as existing liens, encumbrances, or disputes over ownership, the sale could either be delayed or invalidated. In some cases, certain lands are jointly owned, and without the consent of all co-owners, a sale cannot validly proceed. Likewise, in family or communal settings, the sale of family land often requires the consent of family heads or principal members.
Another crucial legal restriction relates to the need for governmental or third-party consents. Under the Land Use Act of Nigeria, for example, the sale of land requires the prior consent of the Governor of the state where the land is located. Failure to obtain such consent can render the transaction null and void. Similarly, in many places, the sale of mortgaged land requires the consent of the mortgagee (usually a bank), and selling land without disclosing an existing mortgage may amount to fraud.
There are also legal restrictions arising from public policy considerations. For instance, land sales to foreigners may be restricted or subjected to special conditions to protect national interests. Certain categories of land may be reserved exclusively for citizens, and attempts by foreigners to acquire such land may be invalid. Environmental regulations may also impose restrictions, particularly where the land is located within protected zones such as wetlands or conservation areas.
Religious or cultural factors can further impose restrictions. In some jurisdictions, land that belongs to religious institutions or sacred grounds cannot be sold without special permissions or is entirely inalienable. The influence of customary law, especially in African contexts, cannot be underestimated. Customary law may dictate that land inherited through traditional lineage cannot be alienated without the consent of family elders or communal authorities.
Fraud is another key concern, and as such, many legal systems impose restrictions to curb fraudulent transactions. The need for proper verification of title documents, conducting due diligence searches at land registries, and obtaining solicitor certificates of title is part of the broader legal framework designed to protect against fraudulent land sales. Legal practitioners often advise clients to be extremely cautious, conducting exhaustive checks before committing to any land purchase.
In light of these complexities, it becomes clear that anyone involved in the sale or purchase of land must seek appropriate legal advice and be fully conversant with all applicable laws. Ignorance of the law, as the maxim states, is no excuse. Therefore, both sellers and buyers must be proactive in understanding the legal landscape, conducting necessary due diligence, and ensuring that all transactions comply with both statutory and customary laws.
Failure to observe the legal restrictions governing the sale of land can have dire consequences. Transactions may be set aside, investments may be lost, and parties may find themselves entangled in lengthy and costly litigation. Thus, it is not only a matter of good practice but also one of legal necessity to ensure that every sale of land is conducted in strict adherence to existing legal requirements.
Understanding these legal restrictions is not merely academic; it is a practical necessity for anyone wishing to engage in land transactions. Whether you are buying your first piece of property, selling inherited land, or facilitating large real estate developments, knowledge of the legal limitations involved in land sales is absolutely vital to protect your interests and to avoid pitfalls that could jeopardize your investment.
STEPS OR STAGES IN THE SALE OF LAND
International Textile Industries Nigeria Ltd v Aderemi.
Leases are usually prepared by the Lessor’s Solicitor because the lessor has reversionary interest to protect.
The stages are;
Solicitor for both parts should be diligent in obtaining instructions, negotiating, searching, inspecting, vetting, etc. and ensure the best interest of the client is preserved throughout the transaction.
1. Pre-Contract Stage:
Receive Instructions: details of property. parties, agents, fixtures, easements, profits, restrictive covenants, consideration, nature of title on the land (whether vitiated or there exists a Court dispute, etc), whether family land, survey plan, consent, exact nature of transaction, title (documents, title deeds, etc. be ascertained…), completion date, deposits, costs/Solicitor’s fees.
Parties negotiate. Pre Contract Inquires are sent to elicit more information (like boundaries, disputes/adverse rights, covenants and restrictions on land, reversionary interests, facilities, insurance provisions, etc. ) upon which the purchaser’s decision would be premised. The vendor hay not reply but he should not misrepresent-Walker v Boyle.
2. Contract Stage: which may be either of the three. The Sale agreement is Prepared in duplicate by vendor’s solicitor and copy sent to purchaser’s solicitor and then purchaser for signature where everything appears good. Due investigation and deduction of title should also be conducted here.
3. Post-Contract Stage: deed Of conveyance is prepared by Purchaser’s Solicitor with two copies sent to vendor’s solicitor for amendment and approval. When approved, the conveyance is engrossed in at least 5 copies (1 for Min of Land, 1 for Stamp Duty, 1 for Registration, 2 as original and counterpart).
4. Completion Stage: the procedure for completion of Sale of Land is thus; the vendor’s lawyer sends a completion statement (also called financial statement) to the purchaser. The purchaser’s lawyer drafts the deed of assignment/conveyance and sends it to the vendor for possible amendment, after which balance is paid and the deed is executed. The purchaser collects the original title documents, keys to the property, tax receipts, and a letter of introduction if tenants live on the property.
Post-Completion Stage: Purchaser’s solicitor obtains governor’s consent, stamps the deed of conveyance, registers the document and hands them over to his client (purchaser) bill of charges may also be sent here.
DOCUMENTS REQUIRED FOR GOVERNOR’S CONSENT: –
Consent Application Letter/Form, Purchase receipt, 6 copies of survey plan (signed by licensed. surveyor), Vendor’s 3years TCC, CTC of Deed of Assignment, receipts of consent and development fee. If the mortgagor is a company include memo-art, Form CAC 8, board resolution, and CTC certificate of incorporation.
STATE THE TYPES OF CONTRACT OF SALE OF LAND: The contract may be:
– Oral: which is generally unenforceable (Section 4 SOF 1677) except it is an alienation under Customary Law in the presence of witnesses and full purchase Letter/Form, Purchase receipt, 6 copies of survey plan (signed by licensed. surveyor), Vendor’s 3years TCC, CTC of Deed of Assignment, receipts of consent and development fee. If the mortgagor is a company include memo-art, Form CAC 8, board resolution, and CTC certificate of incorporation.
price has been paid and there has been sufficient acts of part performance Odusoga v Ricketts, Kachallah v Banki. Section 5(3) Law Reform (Contract) Act.
Although courts in their equitable jurisdiction may (whether under customary law or not) in the interest of justice order specific performance where there has been part performance by one party relying on the other party’s representations.
– Open: a written note, receipt or memorandum which only provides for parties, price and property. Signed by the party to be charged. Gaji v Paye E.g. Receipt, written offer, several documents connected together, etc.
– Formal: deal with parties, price, property and other terms/conditions mutually agreed upon by the parties. Like deposit, part payment-balance n interest, economic plants, insurance, covenant and reservation, existing restrictions (e.g. existing tenancy), survey, possession before completion, forfeiture of deposit upon default, The Capacity in which the vendor is conveying the property. (Whether as beneficial owner, mortgagee, trustee, settlor, PR), fittings, fixture, (don’t inflate to evade stamp) possession before completion (Odutola v Papersack Nig Ltd), insurance before completion etc.
ADVANTAGES OF CONTRACT OF SALE;
It is advantageous as there is more investigation, binding obligations (which cannot be unilaterally avoided or terminated by death) are created, default implications of law are avoided as parties cater for specifics, fixtures and fittings may be transferred ^ here and left out in the deed thereby reducing stamp duties, prevents unilateral increase in purchase price, easier to enforce.
Note void terms in the contract
EXCHANGE OF A FORMAL CONTRACT OF SALE OF LAND; PROCEDURE AND EFFECT
A deed takes effect upon delivery while a contract takes effect upon exchange Awojugbagbe Light Industries Ltd v Chinukwe.
A contract for sale of land takes effect/comes into existence/becomes binding once it is signed (by the parties) in several copies and exchanged physically (into their actual or constructive possession) Awajugbagbe Light Industries v Chinukwe.
Exchange may be like this: After negotiations, inquiries, consensus and deliberations on drafts… vendors solicitor prepares and forwards the contract document to purchaser’s lawyer who will sign and send the signed and stamped contract (with a cheque or payment for the deposit) to the vendor’s lawyer, who then sends the vendor’s part duly signed with a receipt for th deposit to purchaser’s solicitor.
A solicitor may act for both parties if title is sound, terms are clearly agreed, interest are not likely to conflict, price of property is decent, no other lawyer in vicinity is desirable to either party
If one lawyer represents both parties, exchange will occur once they sign on the contract document. Exchange over the telephone instruction to the solicitor was accepted in Domb v Isoz.
EFFECT OF EXCHANGE OF CONTRACT:
Once contract has been exchanged and governor’s consent gotten, the property is at the risk of the purchaser. Exceptions in Section 72 PCL; – The purchaser acquires an equitable interest; -death of either party would not affect/truncate the transaction and personal representatives should complete it; – Vendor becomes trustee (specific performance); – Vendor has lien over property for the balance of purchase pric Edosa v Zacalla,
Conclusion
The sale of land, while a seemingly straightforward transaction, is deeply embedded in a complex framework of legal restrictions. These legal hurdles are not arbitrary; they serve important societal functions such as maintaining order, protecting ownership rights, safeguarding public interest, and preventing fraud. Ignoring or overlooking these restrictions could lead to devastating financial, legal, and reputational consequences. Therefore, understanding and complying with legal restrictions to the sale of land is a responsibility that must be taken seriously by all involved parties.
Throughout history, land has remained a valuable and sometimes contentious asset, and governments, communities, and individuals have all recognized the necessity of regulating its transfer. The requirements for written agreements, proper documentation, the necessity for consent from appropriate authorities, and compliance with zoning and planning laws all combine to create a system where land transactions are not only lawful but also equitable. These safeguards ensure that ownership is clear, disputes are minimized, and the integrity of land tenure systems is maintained.
One cannot overemphasize the importance of verifying title ownership and conducting thorough due diligence before embarking on any land transaction. This process includes not only checking the authenticity of the documents but also ensuring that there are no hidden encumbrances, disputes, or legal claims that might affect the validity of the sale. As numerous cases have shown, courts are often called upon to undo sales where buyers neglected proper investigation or where sellers misrepresented the status of the land.
In Nigeria, for example, the case of Ogunbambi v Abowaba emphasized the legal necessity of obtaining the Governor’s consent before a land sale could be finalized. Courts have consistently struck down transactions that failed to comply with mandatory statutory requirements. Similarly, the Land Use Act continues to play a pivotal role by mandating processes and providing a regulatory framework within which land sales must occur. Compliance with such statutes is not optional; it is legally binding.
Moreover, there are various cultural and customary laws that coexist with statutory laws. Particularly in African jurisdictions, customary land ownership systems are recognized and protected. This dual legal framework means that parties to a land transaction must pay attention not only to written statutory laws but also to unwritten customary practices. A sale conducted without the necessary family or community approvals might be set aside, no matter how compliant it appears under statutory law.
Restrictions based on public policy are equally significant. National interest dictates that certain lands be restricted from sale to foreigners, and lands designated for conservation, infrastructure, or public use are usually protected from private sales. Environmental restrictions, zoning laws, and development control regulations further highlight the multifaceted legal environment within which land sales must operate.
Consent requirements also serve an important function. By requiring governmental approvals for certain land transactions, the law aims to prevent unlawful alienation, ensure proper urban planning, and secure the rights of all stakeholders. Consent requirements often act as a checkpoint where compliance with broader planning and development goals can be assessed before a sale is finalized.
Ultimately, the legal restrictions to the sale of land exist to protect the broader interests of society as well as the specific interests of individuals. They provide a framework within which land transactions can be safely and fairly conducted. Far from being unnecessary bureaucratic hurdles, these restrictions are vital elements of a well-functioning real estate system. They balance private rights with public good, stability with growth, and tradition with innovation.
For buyers and sellers alike, ignorance of these legal requirements can be catastrophic. Thus, engaging the services of experienced property lawyers and consultants is not just advisable but essential. Legal advisors bring the necessary expertise to navigate complex laws, conduct due diligence, obtain required consents, and draft ironclad agreements that protect their clients’ interests.
In a world where land values continue to appreciate and real estate investments remain a cornerstone of wealth accumulation, there is no room for laxity when it comes to the legality of transactions. Every piece of land sold or bought must pass through the crucible of legal scrutiny to ensure that it is fit for sale, properly transacted, and immune from future disputes.
Therefore, whether you are a first-time buyer, a seasoned investor, or a seller looking to divest a piece of property, it is imperative to familiarize yourself with the legal restrictions applicable to land sales. Equip yourself with knowledge, seek professional advice, and approach each transaction with the seriousness it deserves. In doing so, you not only safeguard your investment but also contribute to the stability and integrity of the property market.
In conclusion, legal restrictions to the sale of land should never be seen as obstacles but as necessary protections. They are the pillars that uphold the sanctity of ownership, the security of investments, and the fairness of transactions. Understanding and adhering to them is not just a legal obligation—it is a strategic advantage for anyone involved in the dynamic and rewarding world of real estate.