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VARIOUS REAL ESTATE TRANSACTION CONCEPTS IN NIGERIA

 

Real estate is a serious business with different thresholds, as lucrative as real estate is, without proper information a real estate owner might still not make many profits.

How you make profits from real estate depends on your knowledge base, astuteness and you’re branding.

There are different fields in real estate; one can venture into, to mention a few real estate agency, real estate marketing, real estate data analyst, real estate developer, building, survey and planning etc.

In Nigeria there are various real estate transactions you can find yourself in, getting an information about these concepts might prove precious at a moment.

Pledge- A pledge is a kind of indigenous mortgage by which the owner (occupier) of a real estate (land) armed with a need for money(in order to secure an advance of money or something of monetary value) gives possession and use of his land to the pledge creditor until the debt is fully discharged.

In the book titled “TITLE TO LAND IN NIGERIA” PUBLISHED BY EVANS BROTHERS LTD (1974)49. OLAWOYE stated that a “Pledge” is created when an owner of land transfers possession of his land to his creditor as security, or rather in consideration of a loan with the object that he should exploit the land in order to obtain the maximum benefit as consideration for making the loan. A pledge is perpetually redeemable and this reminds us of a well known legal phrase, once a pledge, always a pledge.

PLEDGE DISTINGUISHED FROM MORTGAGE-

Although a pledge is a customary mortgage, there is difference between the two, in pledge ownership in the property is with the borrower, the lender has possession; in mortgage the reverse is the case, in mortgage the ownership in the property is with the lender, while the borrower has mere possession until he pays the full mortgage sum and interest.

 

PARTITION-Partition is also a recognized form of alienation of real estate, one of the transaction concepts mostly witnessed in rural areas, happens mostly in family land. the family property is divided among individuals who are members of the family, so each person entitled to a land, becomes an absolute owner, he /she can do whatsoever with the land as a personal property.

PAWN UNDER CUSTOMARY TENURE-To pawn something is to use it as a collateral when you re borrowing money, there is this general tendency to think that a pledge and a pawn are one, under customary tenure, a pawner of land in some locations in Nigeria grants its possession and use to a pwanee who invariably occupies the land, the pawnee is entitled to the income or usufruct of the property until the debt is repaid. A pawnee must be in the possession of the land personally, he is however not expected to transfer his legal rights of occupation without first asking the pawnor to repay the loan. he can transfer right of possession, when and after he had informed the pawnor, and the pawnor could not repay the loan.

FIXED TENANCY UNDER  CUSTOMARY TENURE-there was this practice wherein the owner of economic trees such as kola nut trees, cocoa & oil palms, sells the anticipated yield for about twelve or more months to a purchaser who reaps the produce for that period only at the end of  the period, the purchaser must give up his right over the trees, remember that what is on the land is part of the land(QUID QUID PLANTATEUR,SOLO SOLO CEDIT).

REDEEMABLE SALE UNDER CUSTOMARY TENURE-instances arise when a man states that he has not pawned his farm, but has actually sold the farm, however with the condition that he might repurchase it, at the same price at an undefined later date. in a complete sale of land in Nigeria, there is usually a customary celebration with witnesses attending such, now such ceremony is now fading out, this ceremony distinguishes a perfect sale from sale under redeemable sale in customary tenure. These days it is expected where parties intend a complete sale, it must be clearly stated and signed in a deed of assignment/conveyance.

TENANCY UNDER CUSTOMARY LAW- it is worthy to note that before an interest qualifies as a tenancy under customary law, it must satisfy the following:

  1. There must be an intention to grant tenancy.
  2. There must be an agreement between the parties
  3. The tenant must enter into actual possession/or do something showing intent to enter into actual possession.

 

TENANCY UNDER STATUE-A tenancy agreement shall for the purpose of this law be deemed to exist,(a)where premises are granted by the landlord to a person for value whether or not it is express or (b)implied oral or written or partly oral or partly written, or (c)for a fixed period. This is the provision of section 3(1) of lagos state tenancy law 2011, defining a tenancy relationship under the statue.

The provisions of section 13 of the law above, specifically described the manner of notice a landlord gives to the tenant in their relationship.

Section 13(1) states –“Where there is no stipulation as to the the notice to be given by either party to determine the tenancy the tenancy: the following shall apply”

(a)A weeks notice for a tenant at will.

(b) one months notice for a monthly tenant

(c) three months notice for quarterly tenant

(d) three months notice for a half yearly tenant

(e) six months notice for a yearly tenant

 

MORTAGAGE-in a mortgage transaction, the borrower is known as the Mortgagor, the lender as the mortgagee, the borrower. There is a legal and equitable mortgage, we have distinguished mortgage and pledge above.

LEASE- A lease is the demise of property by the lessor (landlord) to the lessee for an interest which remains in the grantor, called “reversionary interest” usually in consideration of the payment of rent. it creates an interest in the property for a fixed period of time, that is, there must be certainty of duration. A lease may create a legal or equitable interest, with its duration depending upon the agreement. A lease could be for ninety nine years or even to less than a year. Possession is exclusive,a lease is different from a license because a license doesn’t carry with it ,the benefit of exclusive possession.

JOINT VENTURE- A joint venture is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

 

OFF PLAN PROPERTY-Off plan refers to a property or development that is still in its construction or planning phases, and remain uncompleted. there are risks involved with it, the investors are advised to first understand, the reputation of the developer, who you wish to entrust your money, the good news is that off plan property are mostly less expensive than, it is completed.

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