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WHAT IS THE IMPORTANCE OF DEED OF ASSIGNMENT IN LAND TRANSACTIONS?
Everything you need to know about Deed of Assignment.
CHAMAN LAW FIRM
5/11/20245 min read
WHAT IS THE IMPORTANCE OF DEED OF ASSIGNMENT IN LAND TRANSACTIONS?
INTRODUCTION:
A Deed of Assignment is an important legal land document that records a sale of land and transfers interest and title in real property from one party to another starting from the commencement date stipulated in the document.
A deed of assignment refers to a legal document that records the transfer of ownership of a real estate property from one party to another. It states that a specific piece of property will belong to the assignee and no longer belong to the assignor starting from a specified date. In order to be valid, a deed of assignment must contain certain types of information and meet a number of requirements.
AN ASSIGNMENT:
An assignment is similar to an outright transfer, but it is slightly different. It takes place when one of two parties who have entered into a contract decides to transfer all of his or her rights and obligations to a third party and completely remove himself or herself from the contract.
Also called the assignee, the third party effectively replaces the former contracting party and consequently assumes all of his or her rights and obligations. Unless it is stated in the original contract, both parties to the initial contract are typically required to express approval of an assignment before it can occur. When you sell a piece of property, you are making an assignment of it to the buyer through the paperwork you sign at closing.
A DEED OF ASSIGNMENT:
A deed of assignment refers to a legal document that facilitates the legal transfer of ownership of real estate property. It is an important document that must be securely stored at all times, especially in the case of real estate.
In general, this document can be described as a document that is drafted and signed to promise or guarantee the transfer of ownership of a real estate property on a specified date. In other words, it serves as the evidence of the transfer of ownership of the property, with the stipulation that there is a certain timeframe in which actual ownership will begin.
The deed of assignment is the main document between the seller and buyer that proves ownership in favor of the seller. The party who is transferring his or her rights to the property is known as the “assignor,” while the party who is receiving the rights is called the “assignee.”
A deed of assignment is required in many different situations, the most common of which is the transfer of ownership of a property. For example, a developer of a new house has to sign a deed of assignment with a buyer, stating that the house will belong to him or her on a certain date. Nevertheless, the buyer may want to sell the house to someone else in the future, which will also require the signing of a deed of assignment.
This document is necessary because it serves as a temporary title deed in the event that the actual title deed for the house has not been issued. For every piece of property that will be sold before the issuance of a title deed, a deed of assignment will be required.
REQUIREMENTS FOR A DEED OF ASSIGNMENT
In order to be legally enforceable, an absolute sale deed must provide a clear description of the property being transferred, such as its address or other information that distinguishes it from other properties. In addition, it must clearly identify the buyer and seller and state the date when the transfer will become legally effective, the purchase price, and other relevant information.
In real estate transactions, contracting parties usually use an ancillary real estate sale contract in an attempt to cram all the required information into a deed. Nonetheless, the information found in the contract must be referenced by the deed.
INFORMATION TO INCLUDE IN A DEED OF ASSIGNMENT
A deed of assignment is considered a must for the transaction of ownership in land. The main purpose of a deed of assignment is to transfer an interest or assign the title of property from the seller (an assignor) to a new buyer called (the Assignee). For a deed of assignment to fit the above purpose, it must contain certain details or particulars that will be briefly discussed below:
« Particulars of the parties to the transaction (names, address, status).
« Date of transfer of ownership of the property from the vendor to the purchaser.
« Nature of assignor's (vendors) title.
« The full description/particulars of the property with fittings & fixtures where applicable.
« History of the property being transferred from the first time it was acquired to the current time of sale, including documents it previously had to date.
« Details of a verifiable document that the property possesses.
« The consideration paid in respect of the property transaction (purchase price) and the willingness of the vendor to accept the price paid for the property.
« The nature of the transaction and the capacity of the assignor (vendor).
« Covenants both parties to the transaction undertake to fulfil.
« Signature of the parties and that of the witnesses to the transaction.
« Survey plan.
« Details of the Legal practitioner who prepared the deed.
« Section for the Governor's consent to be signed and verified.
The importance of a deed of assignment cannot be overemphasized, as it is a formal contract duly entered and executed between two parties to a real property transaction, to transfer all the unexpired residue of land to the other party. It contains not only the basic requirements but goes further to include detailed terms of what the parties to the transaction have agreed upon.
It is important that a deed of assignment is drafted by a property lawyer, to ensure that the best interests of the parties to the transaction are duly represented. The deed of assignment is usually drafted by the assignee's legal practitioner and given to the assignor (vendor) for vetting and execution. Where the property falls within an estate, the assignor's legal practitioner may prepare the deed for the assignee's lawyer to review.
Another great importance of a deed of assignment is that it serves as a valid root of title to the land. It acts as valid evidence of transfer, especially where there is a contention as to the validity of the land or where a third party tries to claim ownership of the same land.
It is also important that when the deed of assignment has been exchanged between the parties to the transaction, it is recorded or registered with the appropriate land registry where the land is situated for perfection purposes. Perfection comes at the post-completion stage which involves obtaining the governor's consent, stamping of the deed of assignment, and finally, registration of the document to show legal proof that the property has exchanged hands and also to create public awareness that the property belongs to a new owner.
In Conclusion, A deed of assignment is important in any land transaction because it acts as the main document between the vendor and the purchaser to show that all negotiations, investigations, and other necessary due diligence have been done; the purchase price has been paid; other necessary conditions have been fulfilled by the parties to the transaction and the vendor has transferred all his rights in the property to the purchaser.
