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How Important is Deed of Conveyance in Nigeria

    A deed of conveyance is a legal instrument used to transfer the ownership of real property from one person or entity to another.

    In Nigeria, the deed of conveyance plays a crucial role in property transactions, ensuring the legality and security of ownership transfers.

    If so.

    This article provides an in-depth understanding of the deed of conveyance in Nigeria, covering its definition, legal framework, significance, components, and the process involved in its creation and execution.

    Definition and Legal Framework

    A deed of conveyance, also known as a conveyance deed, is a written document that evidences the transfer of legal title to property from one party(the grantor) to another (the grantee).

    It serves as proof of ownership and is a critical document in real estate transactions.

    In Nigeria, the legal framework governing deeds of conveyance is primarily derived from common law principles, statutory provisions, and case law.

    The key statutes regulating deeds of conveyance in Nigeria include:

    1. The Land Use Act of 1978 is the primary legislation governing land ownership and administration in Nigeria. It vests all land in each state of the federation in the governor, who holds it in trust for the people. The act outlines the procedures for obtaining rights of occupancy, which are essential for land transactions.

    2. The Conveyancing Act of 1881: Although this act is a British statute, its provisions are applicable in Nigeria, especially in states that have not enacted specific conveyancing laws. The act regulates the transfer of property and provides guidelines for the creation and execution of deeds of conveyance.

    3. State Land Laws: Various states in Nigeria have enacted their land laws to address specific regional issues and supplement the Land Use Act. These laws may contain provisions related to deeds of conveyance and property transactions.

    4. The Property and Conveyancing Law of Western Nigeria: This law, applicable in some states, provides a comprehensive framework for property transactions, including the creation and execution of deeds of conveyance.

    Significance of Deed of Conveyance

    The deed of conveyance is a critical document in property transactions for several reasons:

    1. Legal Validity: It serves as evidence of the legal transfer of property ownership. Without a deed of conveyance, the transfer may be considered invalid, leading to potential disputes and legal complications.

    2. Security of Ownership: It provides security to the grantee by establishing their legal right to the property. This is crucial for obtaining loans, selling the property, or using it as collateral.

    3. Prevention of Fraud: The formal process involved in creating and registering a deed of conveyance helps prevent fraudulent property transactions. It ensures that the transfer is conducted transparently and under the law.

    4. Clarity of Terms: The deed of conveyance clearly outlines the terms and conditions of the transfer, including the rights and obligations of the parties involved. This clarity helps prevent misunderstandings and disputes.

    Types of Deeds of Conveyance

    In Nigeria, various types of deeds of conveyance are used depending on the nature of the property transaction. These include:

    Freehold Conveyance:

    This type involves the transfer of full ownership rights in perpetuity.

    It grants the grantee the maximum possible interest in the property.

    A freehold interest, also known as fee simple, represents the most complete form of ownership.

    It grants the owner absolute rights to the property, including the right to use, sell, lease, or bequeath it.

    A deed of conveyance transferring a freehold interest typically includes a habendum clause that specifies the transfer of full ownership rights to the grantee.

    Leasehold Conveyance

    This type involves the transfer of a leasehold interest, where the grantee obtains the right to use the property for a specified period, subject to the lease terms.

    A leasehold interest grants the grantee the right to use and occupy the property for a specified period, as outlined in a lease agreement.

    The leasehold interest is subject to the terms and conditions of the lease, and the ownership of the land remains with the lessor(grantor).

    A deed of conveyance for a leasehold interest must clearly state the duration of the lease and any renewal options.

    Mortgage Deed

    Although primarily a security document, a mortgage deed can also function as a deed of conveyance when it transfers conditional ownership to the mortgagee until the debt is repaid. 

    Gift Deed

    This involves the transfer of property ownership without any monetary consideration.

    It is often used for the conveyance of property between family members.

    Components of a Deed of Conveyance

    A well-drafted deed of conveyance typically includes the following components:

    1. Parties Involved: The names, addresses, and legal capacities of the grantor (seller) and the grantee(buyer) must be clearly stated.

    2. Recitals: This section provides a brief history of the property, including previous ownership and any relevant transactions. It helps establish the chain of title.

    3. Operative Clause: The operative clause is the heart of the deed and contains the actual transfer of the property. It includes a statement of the grantor’s intent to transfer ownership to the grantee.

    4. Description of Property: A detailed description of the property being conveyed is essential. This includes the location, boundaries, dimensions, and any unique features.

    5. Consideration: The consideration clause specifies the amount paid by the grantee to the grantor for the property. This may be monetary or non-monetary (e.g., exchange of other property).

    6. Habendum Clause: The habendum clause defines the extent of the interest being transferred. It specifies whether the transfer is for freehold, leasehold, or any other type of interest.

    7. Covenants: These are promises or guarantees made by the grantor to the grantee. Common covenants include the grantor’s assurance that they have the legal right to transfer the property and that the property is free from encumbrances.

    8. Boundary Disputes – Boundary disputes occur when there is ambiguity or disagreement over the precise boundaries of the property being conveyed. Such disputes can arise from inaccurate property descriptions, overlapping claims, or encroachments. To prevent boundary disputes, it is important to obtain a detailed survey plan prepared by a licensed surveyor and ensure that the property description in the deed of conveyance is accurate and clear.
    9. Signatures and Execution: The deed must be signed by the grantor and witnessed by at least two individuals. The signatures must be executed in the presence of the witnesses.

    10. Attestation and Seal: The witnesses must attest to the grantor’s signature, and the deed may require the affixing of a seal, depending on state laws.

    11. Registration: In Nigeria, it is mandatory to register the deed of conveyance with the relevant land registry. This step is crucial for the legal recognition of the transfer.

    The Role of Legal Practitioners in Deed of Conveyance Transactions

    Given the complexity of property transactions and the legal requirements involved, the role of legal practitioners in the creation and execution of deeds of conveyance is indispensable.

    Title Investigation

    Before drafting a deed of conveyance, a legal practitioner conducts a thorough investigation of the property’s title.

    This involves examining the chain of title to confirm the grantor’s ownership and identify any encumbrances, such as mortgages, liens, or pending litigation.

    The investigation helps prevent disputes and ensures that the grantor has the legal right to transfer the property.

    Drafting and Reviewing the Deed

    Legal practitioners are responsible for drafting the deed of conveyance, ensuring that it complies with legal requirements and accurately reflects the terms agreed upon by the parties.

    They include all necessary components, such as the operative clause, description of the property, consideration, and covenants.

    After drafting, the deed is reviewed by both parties and their legal representatives to address any concerns or necessary amendments.

    Facilitating Execution and Registration

    Legal practitioners oversee the execution of the deed, ensuring that it is signed by the grantor in the presence of witnesses and properly attested.

    They also facilitate the payment of stamp duty and the registration of the deed with the relevant land registry.

    Registration is a critical step that provides public notice of the transfer and ensures the legal recognition of the grantee’s ownership.

    Process of Creating and Executing a Deed of Conveyance

    The process of creating and executing a deed of conveyance in Nigeria involves several steps:

    Preliminary Investigation

    Before drafting the deed, it is essential to conduct a thorough investigation of the property.

    This includes verifying the grantor’s title, checking for encumbrances, and confirming compliance with zoning and planning regulations.

    This involves verifying the current ownership of the property and ensuring that the grantor has the legal right to transfer it. 

    The title search helps uncover any existing encumbrances, such as mortgages, liens, or easements.

    Drafting the Deed

    A qualified legal practitioner drafts the deed of conveyance, ensuring that all necessary components are included and that the document complies with legal requirements.

    Approval by Parties

    The draft deed is reviewed and approved by both the grantor and the grantee.

    Any necessary amendments are made to address concerns or clarifications.

    Survey Plan

    A licensed surveyor may be engaged to create a survey plan, which accurately delineates the property boundaries and provides a legal description.

    Execution of the Deed

    The deed is signed by the grantor in the presence of witnesses.

    The witnesses also sign the deed, attesting to the grantor’s signature.

    Stamp Duty Payment

    The deed must be stamped, and stamp duty is paid to the relevant tax authority.

    The amount of stamp duty depends on the consideration stated in the deed.

    Registration

    The final step is to register the deed of conveyance with the appropriate land registry.

    This involves submitting the stamped deed along with any required supporting documents and paying the registration fees.

    Challenges and Considerations

    While the deed of conveyance is a vital document in property transactions, several challenges and considerations must be addressed:

    1. Complexity of Laws: The legal framework governing deeds of conveyance can be complex, with overlapping statutes and regional variations. This complexity necessitates the involvement of qualified legal practitioners.

    2. Fraudulent Practices: Despite the formal process, fraudulent property transactions still occur. It is crucial to conduct thorough due diligence and verify the authenticity of documents and parties involved.

    3. Cost and Time: The process of creating and executing a deed of conveyance can be time-consuming and costly. This includes legal fees, stamp duty, and registration fees.

    4. Land Use Act Restrictions: The Land Use Act imposes certain restrictions on land transactions, including the requirement for the governor’s consent for the transfer of statutory rights of occupancy. Compliance with these requirements is essential to ensure the validity of the deed.

    Conclusion

    The deed of conveyance is an indispensable document in property transactions in Nigeria, ensuring the legal and secure transfer of ownership.

    Its significance cannot be overstated, as it provides legal validity, security of ownership, and clarity of terms.

    Understanding the components and processes involved in creating and executing a deed of conveyance is crucial for anyone involved in real estate transactions.

    By adhering to the legal framework and addressing potential challenges, parties can ensure that property transfers are conducted smoothly and in compliance with the law.

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