OVERVIEW OF A TITLE DEED IN PROPERTY LAW PRACTICE IN NIGERIA

ALL YOU NEED TO KNOW ABOUT A TITLE DEED TO A PROPERTY IN NIGERIA

REAL ESTATE AND PROPERTY LAW PRACTICE IN NIGERIA

CHAMAN LAW FIRM

2021-07-13 18 min read

Title deed in Nigeria. Deed of Assignment, Deed of Lease.

OVERVIEW OF A TITLE DEED IN PROPERTY LAW PRACTICE IN NIGERIA

·         Features of a deed

·         Identify when a deed is required

·         Various parts of a deed

·         Content of a deed

·         Draft a deed that will meet professional standard

·         IDENTIFY THE USE OF DEED OF RECTIFICATION

A DEED is a document in writing, signed, sealed and delivered from one person to another which is used to convey, ratify or revoke an interest in land. It may be written in any language in any character or form. Difference between a deed and other documents in writing, documents merely in writing and is not sealed and delivered but signed.

Every contract under seal is a deed.

USES OF A DEED

1)      To transfer legal or equitable interest( legal interest; mandatory… equitable optional)

2)      To ratify an interest or obligation already created.

3)      To extinguish an obligation or interest.

4)      To delegate, create or revoke  power or authority conferred on another. Example POA.

ESSENTIALS OR FEATURES OF A DEED.

1.      It must be in writing

2.      It must be signed

3.      There must be an intention that the document is under seal

4.      Must be delivered, which is an intention to create legal relations(assignor to be bound)

5.      Attestation

6.      It must be franked

7.      Endorsement for Governors consent

 

A.    WRITING:

v  A deed must be a document in writing. Section 4 Statute of Frauds Act; Section 79 PCL; section 5 Law Reform (Contracts) Act, 1961.

v  Formerly, the deed was required to be on a particular type of paper-  parchment (Vellum). Now use of a particular type of paper is not necessary. What is important is that it must be in writing

B.     SIGNED:

v  A deed must be signed by the parties.

v  Statute makes it mandatory. See section 97(1) of PCL which provides that where an individual executes a deed, he shall either sign or place his mark on it and sealing alone shall not be deemed sufficient. Section 83(4) Evidence Act; FARO BOTTLING CO LTD v. OSUJI.

v  When is a document deemed to be signed? Either by the persons handwriting, signature or initials, thumb print will suffice- section 93 EA 2011

v  ELECTRONIC SIGNATURE will also suffice- Section 93(2) EA 2011.

EFFECT OF SIGNATURE:

ü  Unsigned document is worthless and void- Omega Bank Nigeria Plc v OBC Ltd.

ü  Only a person who signed a document can enforce the benefits created therein.

ü  A legal document cannot be enforced against the person who did not sign the document as such person is deemed not to be a part to it.

ü  Inadmissible against the party who did not sign it.

v  If an illiterate or blind person is to sign a document always remember to insert an illiterate or blind Jurat to be attested to by a magistrate, notary public or a legal practitioner.

C.    SEALED:

v  Prior to now, a deed must be sealed by individuals. However what the courts now look out for is the intention to seal. The court de-emphasized actual sealing.

Thus, the general rule is that individuals need not affix a seal as what is important is the intention to seal.

v  There are ways of implying that parties intended that the document should pass as a document under seal:

a.       Placing the actual seal. Example a signet, ring, die or engraved emblem

b.      Deducing from the face of the deed:

·         Introductory part….THIS DEED OF ASSIGNMENT

·         Operative part….NOW THIS DEED WITNESSES as follows

·         Execution….SIGNED, SEALED AND DELIVERED

c.       The EA 2011 provided that where the deed has been duly signed and attested to by the parties witnesses, it is presumed tohave been sealed- SECTION 159 EA 201

d.      Use of the letters LS (standing for the latin phrase locus Sigili meaning the place of the seal. First National Security v Jones.

v  However NOTEfor a company, there must be actual sealing in the presence of a director and secretary of the company. There must be actual sealing and not presumption or intention of sealing for company and corporations only. Section 163EA, 2011 and section 98(1) PCL which both provide that a deed shall be deemed to have been duly executed by a company or corporation if its seal is affixed thereto in the presence of and attested by its secretary, director or other principal officer or his deputy.; WESTERN NIGERIA FINANCE CO LTD v. WEST COAST BUILDERS. Section 71 and 74 of CAMA.

 

D.    DELIVERED:

v  Delivery does not necessarily mean physical handing over of the document. The fact that there was a handover does not mean that there is delivery and absence of handover does not mean that there is no delivery.

v  It is an act done to evince an intention to be bound by the terms of the deed; intention to create legal relations.Awojugbabe Light Industries v Chinukwe

v  Words or conduct expressly or impliedly acknowledging an intention to be bound is sufficient -

v  A deedtakes effect upon delivery (Unconditional Delivery) - Brossete Manufacturing (Nig ) Ltd. V Ola Ilemobola Ltd Nig., section 95(2) EA.

v  Delivery could be in escrow: intention to be bound subject to the satisfaction of some conditions like completion of money or the happening of some specified event. The legal effect is that the deed takes effect from the date of delivery and not when the condition is satisfied. Dalfam (Nig.) Ltd v Okaku Int. Ltd.

v  THEREFORE, the delivery of a deed in escrow does not mean that the party executing it can withdraw from the deed in the intervening period between the execution of the deed and the date of performance of the condition because a delivery in escrow is a final delivery. Once a deed has been delivered, even in escrow, it is too late for the party executing the deed to escape from its effects provided that the other party performs the conditions within the specified time.

NOTE: the date of delivery is the date the deed became effective in the case a deed is delivered in escrow.

The Doctrine of Relation Back applies to a deed delivered in escrow. The doctrine invalidates adverse dealings on the property by the vendor, but does not validate acts of the purchaser during the period of the escrow- Alan Estate v W.G stores Ltd.

 

E.     ATTESTATION

v  Meaning: Witnessing of the deed.

v  The general rule is that attestation is not mandatory, UNLESS SO PROVIDED BY A STATUTE.

v  Thus, a deed is valid whether it is attested to or not because attestation is not essential for the validity of a deed except where the law expressly requires it.

However, it is necessary because:

ü  Attestation by independent persons of full age may facilitate proof of due execution where necessary- Section 154 EA 2011

ü  May raise presumption of sealing and delivery of a deed. –Section 159 EA 2011.

ü  Attestation of a judge, magistrate, commissioner for oaths, notary public without more raises the presumption of due execution.Section 150 EA 2011

v  However, there are certain exceptions where the law requires that certain deeds or documents be attested to. In those cases, attestation is required as a matter of law and its absence will vitiate the deed or document. They include:

a)      Where an illiterate is a party to a deed. The illiterate jurat must be attested to by a Magistrate,  Comm. For Oaths, Justice of the Peace or Notary Public. Section 8(1) Land Instrument Registration Law, Section 119 EA 2011, GILBERT EZEIGWE VAWAWA AWODU Here the illiterate jurat is mandatory and attestation is also mandatory. Section 3 ILLITERATE PROTECTION ACT.

b)      A blind person is a party to a deed – (blind person jurat): where a blind person executes a deed or document or where he is among those executing, his execution must be attested to by a Magistrate, Justice of the Peace, Commissioner for Oaths or Notary Public. See AKINBADE v. OLAYINKA

c)      Deeds or documents executed by a company or corporation UNDER PART A OF CAMA: section 98(1) PCL; section 163 EA 2011(for company: in the presence of a director and the secretary of the company, a clerk, principal member of the company.

d)     Deeds or documents executed by  incorporated trustees under PART C OF CAMA.: incorporated trustees, in the presence of the secretary and a trustee or two trustees).

e)      Wills: attestation by two or more witnesses is a mandatory requirement for the validity of a Will. This is because section 9 of the Wills Act of 1837 provides, inter alia, that the execution of a Will must be attested to by two or more witnesses in the presence of the testator.  WHITE v. WHITE.

f)       Where a statutory body is a party to a deed.

g)      A POA to be used outside Nigeria should be attested to by a notary public as it raises the presumption of due execution. SECTION 150 EA.

SPECIAL Execution – ILLITERATES AND BLIND PERSONS:

BLIND PERSONS: the execution of a deed/document by a blind person must contain a blind person jurat and must be attested to by magistrate, justice of the peace, commissioner for Oaths or Notary public after it must have been read over and explained.. See AKINBADE v. OLAYINKA

SIGNED,SEALED AND DELIVERED

By the within named Assignor:

The contents of this deed having been read over to the Assignor in the Igbo Language from English Language by me ECHEBIMA VIOLA C. of No 1, Adeola Hopewell Street VI Lagos state and he seemed perfectly to have understood same before affixing his thumbprint/mark/signature.

BEFORE ME

___________________________________-

Comm. For oath/notary public/magistrate/justice of the peace

ILLITERATES:

Deed executed by illiterates must contain illiterate jurat in compliance with the Illiterate Protection Laws. and must be attested to by Magistrate, Justice of the Peace or Notary Public. Failure to include the illiterate jurat vitiates the deed/document. See GILBERT EZEIGWE v. AWAWA AWUDU.

However, where the deed or document was prepared by a legal practitioner and was duly franked by him, it removes the document from the purview of the illiterate protection law and the absence of illiterate jurat will not invalidate the deed. See EYA v QUDUS (2001)

F.     FRANKING:

ESSENCE OF FRANKING:

v  Endorsement on the face of the deed of the name and address of the lawyer that prepared the deed pursuant to R. 10 RPC; SECTION 22 (1)(D) LPA, SECTION 4& 5 LAND INSTRUMENT PREPARATION LAW.

Compliance with the provisions of the law

v  Where a deed is franked, this displaces the need for an illiterate Jurat or blind person Jurat, EYA V QUDUS

 

G.    ENDORSEMENT FOR GOVERNOR’S CONSENT: SECTION 22 AND 26 LUA

v  Failure to make provision for this in a deed will constitute a material omission unless there is other evidence that consent was in fact obtained. Adedeji v NBN LTD

DATE

Ø  A deed takes effect on the date of delivery- section 157 EA 2011, Broseette Manufacturing Ltd v Ola Illemobola Ltd.

Ø  USEFULNESS:

v  The parties and the whole world will be aware of the transaction

v  The date inserted is deemed to be the date of execution

Ø  However, a deed must be left undated. BAR PART II. This is to prevent the time of stamping and registration( being 30 and 60 days respectively from running where the parties have not gotten consent of the Governor.

Ø  Secondly, to prevent the party from paying penalties for late stamping and registration. Section 23(3) and(4) of Stamp Duties Act.

Ø  Undated deed takes effect on the date of delivery, section 157 EA 2011; ANUKU V STANDARD BANK NIG.

Ø  EXCEPTION: A DEED OF LEASE , the commencement date must be inserted.

DIFFERENT PARTS OFA DEED

1.      Introductory part:

2.      Operative part

3.      Miscellaneous part

4.      Concluding part

INTRODUCTORY PART

Commencement: the nature of the transaction determines the commencement. ASSIGNMENT – THIS; MORTGAGE – THIS DEED OF LEGAL MORTGAGE.

Date: a deed takes effect from the date of its delivery and not on the date on which it is therein stated to have been made or executed. See section 157 EA, 2011; ANUKU v STANDARD BANK.

Parties: the party to a deed must be legal persons. Natural persons and entities with corporate personality. The party(s) to the deed must be described in detail. Name, address and status in the contract (in bracket). The description of the parties as to status is dependent on the nature of the transaction. Example:

THIS DEED OF ASSIGNMENT is made this___day of____20___ BETWEEN CHIEF EMEKA DANLADI ADISA of 64, Ikeja Street, Ikeja, Lagos (ASSIGNOR) of the one part AND  OGHO DAVID of 17, Udeh Street, Suru-Alaba, Laos (ASSIGNEE) of the other part.

NB: In drafting, always indicate the status of the parties. Note also that if you use OF THE ONE PART, it goes with OF THE OTHER PART. If you use OF THE FIRST PART, it goes with OF THE SECOND PART

Section 102(1) PCL and section 58(1) CA does away with the necessity to add “which expression shall where the context so admits…”

Recitals: the existence of recitals in a deed is determined by the word 'IS' used in the commencement - if it is - THIS DEED OF ASSIGNMENT IS, then a recital will be inserted. If it is - THIS DEED OF ASSIGNMENT made this ......, then there would not be recital. Recitals starts with the word WHEREAS, no matter the number of paragraphs. Recitals can be introductory or narrative.

A narrative recital usually comes before the introductory recital and it states the root of title in the property up till the person whom it is currently vested. That it, it narrates the history of how thee vendor came to own the property in question

An introductory recital usually comes below the narrative recital and it explains the vendor’s intention to transfer the property to the purchaser and the purchaser’s intention to acquire the property from the vendor.

Functions of recitals

·         A clear recital can help clear ambiguity(s) in the main body of the document.

·         Section 162 Evidence Act provides that when there is recital of fact in a document that is 20 years old at the date of the contract, it will be taken to be sufficient proof of title. Thus the statements of facts in such a recital are presumed to be true and correct. This is the ancient document rule.

·         Statements of facts in a recital may give rise to estoppel against the person making them. See section 169 EA

OPERATIVE PART

Testatum: a formal statement commencing the operative part. Either NOW THIS DEED WITNESSES AS FOLLOWS or THIS DEED WITNESSES AS FOLLOWS.

Consideration clause: when contract involves a consideration, it should be stated. The total amount of consideration must be stated in order to know how much is to be paid as stamp duties.The absence of consideration or consideration clause will not affect the validity of a deed because a deed derives its validity from its form and not from the presence or absence of consideration. However, when inserted, the consideration performs the following functions and is important for the following reasons:

·         It is used for the assessment of stamp duties ad valorem

“in consideration of the sum of _______ paid by the assignee to the assignor….”

Receipt clause: this is added to the statement of consideration and evidences that the vendor acknowledges reception of the consideration. The receipt clause should be in bracket. It is usually drafted “… (the receipt of which the vendor/assignor acknowledges)…”

The functions of the receipt clause are:

·         It is an evidence of payment of consideration

·         By section 54 CA and section 92 PCL, the inclusion of a receipt clause in a deed dispenses with the need to issue a formal receipt of payment. This is because it is a sufficient discharge between the vendor/assignor and the purchaser/assignee, without any further receipt for same being issued. See section 54 CA and section 92 PCL

·         SUFFICIENT DISCHARGE OF THE PURCHASERS LIABILITY

·         IT RAISES A REBUTTABLE PRESUMPTION THAT THE PURCHASE PRICE HAS BEEN PAID.

·         By section 55 CA and section 93 PCL, the inclusion of a receipt clause in a deed is sufficient evidence of payment of the whole amount in favour of a subsequent purchaser, not having notice whether the consideration acknowledged to be received was in fact paid or given. See section 55 CA and section 93 PCL

·         By section 56 CA and section 94 PCL, the inclusion of the receipt clause in a deed is sufficient authority to pay money to the vendor’s solicitor upon production of the deed that was executed by the person entitled to issue the receipt (that is, the vendor), without the solicitor producing any other direction or authority from the vendor and there is no liability for loss. See section 56 CA and section 94 PCL

The receipt clause is not conclusive evidence that consideration has, in fact, been paid. Therefore, oral/extrinsic evidence is admissible to show that consideration has not been paid or fully paid.

Capacity of the vendor/assignor and the Covenants of title implied thereby: The covenant of title in a deed are implied by into the deed by statute and the vendor/assignor’s capacity is what determines the type of covenants of title that will be implied. The capacity of the vendor/assignor is stated immediately after the receipt clause. The vendor/assignor may be expressed to assign either as beneficial owner, personal representative, settlor, trustee or mortgagee.

Where the vendor/assignor is expressed to have conveyed in his capacity as beneficial owner, the covenants of title implied by section 7(a) & (b) of CA and section 100(1)(a) &  (b) of PCL are:

a)      Right to convey: that the vendor/assignor has the right to convey the unexpired residue of his interest in the property to the purchaser/assignee

b)      Quiet Possession: that the vendor/assignor grants quiet possession and enjoyment to the purchaser/assignee

c)      Freedom from encumbrances: that the property is free from encumbrances other than those disclosed to the purchaser in the contract or at the time of the contract

d)     Further assurances.

Where it is a lease, then in addition to the four(4) covenants above, the following two covenants are added to make it six(6):

e)      The lease is valid and subsisting

f)       That  all the covenants contained in the head leasehave been observed and performed up till date.

Word of grant: this depends on the nature of the transaction. Assignment - assigns, Mortgage - mortgage, Lease – lease. NOTE THAT THE WORD OF GRANT IS DETERMINED BY THE NATURE OF THE TRANSACTION.

Parcel: this clause gives a detailed description of the property which is the subject matter of the deed. It is drafted as follows:

“ALL THAT property/piece of land/three bedroom bungalow at ___________ covered by C of O numbered _______ dated _______ and registered  as ______ in the Lands Registry office, Jos Plateau state together with all the rights, easements and things appurtenant to it.

Habendum: it is used to define the estate taken by the other party or the quantum of interest given. That is, the habendum is a clause in a deed that defines the quantum or extent of interest granted to the purchaser or lessee under the deed. See STEPHEN IDUGBOE v. ANENIH (2003) ALL FWLR (PT. 149) 1418 where it was held that the habendum is a clause in a deed that defines the extent of ownership in the thing granted to be held and enjoyed by the grantee.

The habendum clause is found in deeds of assignment and in deeds of leases. In a deed of assignment, it is drafted as follows:

“TO HOLD  UNTO the assignee/purchaser for the term unexpired on the R of O free of all encumbrances and subject to the provisions of the Land Use Act Cap L5, LFN, 2004.”

 “TO HOLD UNTO the lessee for the term of _____ years, commencing on the _______ day of ________, _________ and ending on the ________ day of __________, _______

In an assignment, the assignor conveys the entire residue of his interest in the property to the purchaser, while in a lease, the lessor retains some reversionary interest. THEREFORE, the absence of the habendum in a deed of assignment does not affect the validity of the deed because it is implied that the vendor/assignor is assigning all the unexpired residue of his interest in the property to the purchaser/assignee. HOWEVER, in a deed of lease, the absence of the habendum may convert the lease to an assignment. This is because a deed of lease must specify the duration of the lease by providing for the term and commencement date and the date it ends. See UBA v. TEJUMOLA & SONS; ODUTOLA v PAPERSACK NIGERIA LTD (2007) ALL FWLR (Pt. 350) 1214. Thus a deed of lease must contain the habendum.

MISCELLANEOUS PART

This will include covenants like

·         Covenant for indemnity (indemnity and insurance clause which is drafted as follows:

“the purchaser/assignee or any person deriving title under him covenants with the vendor/assignor from now on, to pay to the relevant authority all rents accruing to the title and due under the C of O for which the land is conveyed and to perform all the covenants and conditions contained to be observed and performed by the vendor/assignor, and also to keep the vendor/assignor indemnified against all proceedings, costs, claims, and expenses on account of any omission to pay rent or to observe and perform any of the covenants and conditions”

            On the question whether or not the indemnity clause must be expressly provided for in the deed depends on the lexsitus

. That is the law where the property is located. Thus:

Indemnity clause only required if property is in the eastern and northern Nigeria. Not required under PCL if consideration is paid - s. 101PCL. This is an undertaking by the assignee to pay the rates and observe the covenants and conditions stated in the certificate of occupancy.

CONCLUDING PART

Testimonium: this commences the concluding part of the deed and it is drafted as follows: IN WITNESS OF WHICH the parties have executed the deed in the manner below the day and year first above written

Schedule: provides additional information and clarity. It banish technicality. The survey plan would be in the schedule.

Execution: a deed must be signed, sealed and delivered. Where it is a company, the SIGNED, SEALED AND DELIVERED is replaced with “The common seal of Ononeze Nigeria Ltd was affixed to this deed and it was duly delivered in the presence of Director and Director/Secretary”

·         Attestation

·         Franking.

ENDORSEMENT FOR GOVERNOR’S CONSENT

SEE UDEMEZUE’S DRAFTS FOR DRAFT SAMPLES

TYPES OF A DEED

a)      DEED POLL: unilateral deed; it involves only one party e.g power of attorney. Change of name can be by deed poll.

b)      INDENTURE: it involves more than one person. In sale of family land, there is the head of family and principal members, all of the one part.

CASES WHEN A DEED IS REQUIRED

·         Transfer of interest in land e.g. Assignment- section 77(1) PCL

·         Power of Attorney to execute a deed – Abina v. Farhat;

·         A contract without consideration (deed of gift) –  Anyaegbunam v. Osaka

·         When statute require that a deed be made

·         To revoke, vary, modify, amend or rectify a POA by deed. Abina v. Farhat

·         Confirming right or interest that has already passed

·         Vesting declaration

·         Voluntary surrender

·         Lease above THREE YEARS.

·         Legal mortgage

·         Share transfer agreement of a company

NOTE: that there are only two instances where a POWER OF ATTORNEY must be by deed. They are: where it authorizes an attorney to execute a deed and where it is to alter or modify a power of attorney granted by deed.

CASES WHERE DEED IS NOT NEEDED:

·         Assent by the personal representative

·         Tenancy - under three years

·         Wills

·         Ordinary power of attorney

·         Surrender by operation of the  law

·         Disclaimer by executors

·         Receipts not required by law to be under seal, s. 135 PCL

·         Vesting orders of court; see Barclays Bank v. Ashiru

·         Transactions covered by the rule in Walsh v. Lonsdale

·         Conveyances taking effect by operation of  law such as Appointment of trustees in bankruptcy, Admission of Will to probate, and granting of letters of administration

PARTICULARS NEEDED FROM PARTIES IN RESPECT OF DEED OF ASSIGNMENT

·         Particulars of the parties (names, address, status)

·         Consideration paid in respect of the property

·         Survey plan, local authority and town planning authority of the area.

·         Description/particulars of the property (fittings & fixtures)

·         Particulars of witnesses

·         Covenants, completion date, nature of transaction, capacity

·         Nature of assignor's title

·         Legal practitioner’s fees

WRITTEN BY:

CHAMAN LAW FIRM TEAM

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