Property Law II Life Saver!

By Onimisi – fluent in silence!

Good evening, and how was the Torts examination? May Allah make it easy for us all.
Notwithstanding that some of us might not be happy with what we have written today, I pray the
result comes out favourably.

Like I initially said, this semester is entirely quite choked-up for me; it is the most hectic semester
ever. I had to squeeze my schedule to do this, and this should not in any way serve as an assurance
that there will be something in Company Law II. It is highly doubtful.

I will make 42 bullet points of some vital areas that I believe if we are able to print out tomorrow
morning, we can quickly review before we enter the hall.

Enjoy!

42 BULLET POINTS ON LAND LAW II.

1. The stages that parties to a mortgage transaction will go through to ensure that a valid
mortgage is executed are:
a. Negotiation stage — here, you have a proposal, searches and inspection of the
subject matter (depending on the nature of the subject matter), negotiation of the
amount of loan, and so on;
b. Agreement/contract stage;
c. Perfection stage — this is where all parties will execute the deed of mortgage.
2. Whenever the property involved in the case scenario to be used in the creation of a
mortgage is located in any of the following states: Ogun, Oyo, Ondo, Osun, Ekiti, Edo and
Delta; the Property and Conveyancing Law applies, and under this law, there are three
methods of creating a legal mortgage, which are: by demise, by sub-demise/sub-lease, by
legal charge.
3. If the property involved is located in any of the 19 Northern states, Rivers, Bayelsa, Cross-
River, Akwa-Ibom, Ebonyi, Abia, Imo, Enugu, Anambra, then, the Conveyancing Act
applies, and there are also three ways of creating a legal mortgage under this law, thus: by
assignment, by sub-lease/sub-demise, by deed of statutory mortgage [section 26(1)].

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 4. If the property is located in Lagos State, then, the methods of creation of mortgages under
the Mortgage and Property Law of Lagos State applies, which are provided under
section 15(1) and section 16(1) of the Law.
5. When a mortgage is created by a way of sub-demise under the Property and Conveyancing
Law, the mortgagee has a right to sell the property in case of default by the mortgagor. This
is by virtue of section 112 of the Property and Conveyancing Law. However, if the same
method is used under the Conveyancing Act, the mortgagee does not have the right to sell
the property in case of default by the mortgagor, unless any of the two remedial devices of
Power of Attorney and Declaration of Trust is inserted in the agreement. So, when asked
what is the most preferred mode of creation of legal mortgage under the Conveyancing
Act, go for sub-demise. The reasons being that the mortgagee does not have the right to
sell in case of default by the mortgagor, and that the mortgagor remains in privy of the
estate with the governor. Also, when asked the likely challenges a mortgagee might face
in exercising the right of sale when the mortgage is created by sub-demise under the PCL,
there is no challenge at all. The challenges only come in if it is created under the CA,
especially when there is none of the two remedial devices.
6. There are five ways of creating an equitable mortgage, by virtue of the decision of the court
in Ogundiani v Araba:
a. Deposit of title deeds;
b. Where there is a written agreement to create a legal mortgage;
c. Where there is a second or subsequent mortgage;
d. An imperfect legal mortgage;
e. A mortgage by a holder of an equitable interest.
7. The roles of a lawyer in a mortgage transaction are:
a. To negotiate for the loan with the lender on behalf of the borrower;
b. To investigate the title of the property sought to be mortgaged;
c. To draft the mortgage instrument(s);
d. To perfect the mortgage instrument(s);
e. To discharge the mortgage where the transaction is terminated.
8. The document required to execute a lease transaction is a deed of lease, and for a mortgage
transaction, it is a deed of mortgage. For assignment, it is a deed of assignment.

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 9. Generally, a legal mortgagee has a right to take possession of the mortgaged property from
the onset of the mortgage agreement, but the reason you are to advise your client not to
take possession of the mortgaged property is that, as held in White v. City of London
Brewery, a mortgagee in possession of the mortgaged premises will be called to account
strictly for any income generated by their possession. This means that the mortgagee will
be taken to have received not only the actual income generated by their management of the
property (which can go towards repayments), but also any income that should have been
received assuming the property had been managed to the high standard required. Any
shortfall between the actual income and the reasonably expected income will have to be
made up by the mortgagee, who may find that he actually owes money to the mortgagor if
the income that should have been received is greater than the money owed.
10. A legal mortgagee has a right to sell the mortgaged property only where:
a. The mortgage is by deed;
b. The loan has become due, and
c. There is no contrary intention in the mortgage deed.
11. At all point in time, there must be no covenant that indicates that the mortgagor cannot
redeem the property at the end of the mortgage transaction, or that makes redemption
impracticable. This is because, the basic principle of mortgage is that once a mortgage,
always a mortgage. Hence, there is always an equitable grace to redeem even after the
legal redemption period is over. Harris v Harris; Noakes & Co v Rice; Stanley v Wilde;
Samuel v Jarah Timber and Wood Paving Corporation.
12. A vital element that differentiates a lease from a licence is that a lease has exclusive
possession. So, if there is any covenant/clause/term in the lease agreement that indicates
that the lessee shall not have exclusive possession, such a covenant/clause/term is null and
void. Street v Mountford; Bosah v Oji; Errington v Errington.
13. The court will set aside a sale of a mortgaged property made by a mortgagee in exercise of
his right of sale in any of the four instances below:
a. Where there is corruption or collusion in respect of sell which amounts to fraud;
b. Sale at such a low value, that raises an inference that there is fraud;
c. Where the mortgage money has been paid in full, and
d. Where the mortgagee sells to himself or his privies.

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 14. The proceeds of the sale of a mortgaged property is applied in the following format:
a. Pay all the mortgages having priorities;
b. Pay expenses on the sale;
c. Pay up outstanding interests;
d. Pay up outstanding mortgage sum, and
e. Pay up the balance to the person entitled to the equity of redemption.
15. The reason it is important to insert a covenant of use in a lease agreement is in order for
the landlord to be able to control what the property will be used for. If it is not inserted in
the agreement, then, the property can be used for any purpose. Dawodu v Odulaja is
relevant here.
16. Leases are required to satisfy two conditions:
a. It has to be at least for a term of three years, and
b. It must be by deed.
17. Anything short of the two requirements above automatically converts the lease to a
tenancy.
18. The information you will require from a party who wants to create a lease are the same as
the essential elements of a valid lease, and they have been provided by Justice Niki Tobi
in Odutola v Paper Sack Nig Ltd, thus: parties (ask the name and address of the parties);
the property (ask for the description and location of the subject matter of the lease); term
of years (ask your client the duration he would want the lease to last for); ask of the date
of commencement; ask for the rent payable, and ask for the other terms the parties might
want to insert (like the term of repairs, insurance, use, and so on).
19. Failure to register a deed of assignment or a deed of lease or any other registrable
instrument does not render the transaction null and void, rather, such a failure has the
following effects:
a. The document loses priority over other documents on the same land/transaction that
has been registered;
b. The document is not admissible in court for the purpose of passing or
establishing interest in land or title to land, but could be admissible only as an
evidence of payment of a sum of money or if it is tendered to establish a fact
which one or both of the parties have pleaded. Section 15 of the Land

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 Instrument Registration; the cases of Abdullahi & Ors v Adetutu, and Yahaya
v Umaru are relevant to this effect;
c. A subsequent purchaser is put into unnecessary stress of trying to ascertain if the
assignor of the land actually has title to the land.
20. As held in Bosah v Oji, a lease said to commence on “the day the Onitsha Local
Government Council issues to the lessees a certificate of occupancy in respect of the
premises”, has a valid commencement date.
21. As held in Okechukwu v Onuorah, a lease should have a valid commencement date.
22. As held in Chime v Chime, the fact that a power of attorney was given by the donor of his
power to alienate the property does not divest the donor of the power from dealing with the
property himself. The sale by the donor of the power is an implied revocation of the power,
and the sale is very much valid.
23. As held in Amadi v Nsirim, if both the donor and the attorney exercises the power and
had sold to different persons, the priority rule will govern it as the only issue that will arise
is the priority in the competing sales.
24. A power of attorney does not transfer interest or title in land, not even possession, to the
donee. Ude v Nwara; Osakwe v Nwokedi & Anor; Abu v Kuyaban; Olorunfemi v Nig.
Bank Ltd.; Ezeigwe v. Awudu, and Amadi v Nsirim. It merely warrants the donee to do
acts on behalf of a principal.
25. There is no special precaution to take in executing a power of attorney except:
a. Where the donee is empowered to execute deeds on behalf of the donor or transfer
interest in land, the power of attorney must be by deed. Vulcan Gases Ltd v. G.E.
Ind A-G; Abubakar v. Waziri, and Abina v. Farhat.
b. Where it is executed outside the country, it should be attested by a notary public.
Section 150 of the Evidence Act, 2011, and Melwani v. Five Stars Industries
Ltd.
c. If a donor is an illiterate, there should be illiterate jurat and evidence that the content
was read and interpreted to him. Ezeigwe v. Awudu.
26. A power of attorney is always revocable except it is given for a valuable consideration
and/or coupled with an interest and/or coupled with a grant. Section 8(1) of the CA and

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 section 143(1) of the PCL, or except it is stated to be irrevocable in the instrument of
donation. Section 9(1) of the CA and section 144(1)(i) of the PCL.
27. The death of the donor revokes a power of attorney by operation of the law, except it is
irrevocable as in number (27) above.
28. The case of Osakwe v Nwokedi & Anor gives the types of a power of attorney.
29. Every transaction on land has to be by deed (executed), and if it is not by deed, such a
transaction is null and void. Awojugbabe Light Industries Ltd v P.N. Chinukwe & Anor
is relevant.
30. In Awojugbabe Light Industries Ltd v P.N. Chinukwe & Ors, the Supreme Court held
that a person who has benefitted from a transaction cannot subsequently seek to invalidate
same on the ground of lack of governor’s consent. The case of Adedeji v National Bank
of Nigeria Ltd & Anor is also to this effect.
31. By section 9(1) of the Land Use Act, the circumstances under which a governor may issue
a certificate of occupancy are:
a. When granting a statutory right of occupancy to any person;
b. When any person is in occupation of land under a customary right of occupancy,
and such a person has applied in the prescribed manner, and
c. When any person is entitled to a statutory right of occupancy by a way of a deemed
grant.
32. By section 9(2) of the Act, a Certificate of Occupancy is issued by the Governor in
evidence of a right which already exists. This means that a certificate of occupancy does
not confer any right to the receiver. The cases of Atanda v Iliasu; Otukpo v John; Adole
v Gwar; BAC Electrical Co. Ltd v Adesina. The effect of this position is that, if the
governor fails to carry out proper investigation and he issues the certificate to a person who
does not have the original right over that property, the certificate is just a worthless paper
in the hands of that individual, and the original person who has the original right on the
property can apply to the court ad adduce evidence to establish that he has the right of
occupancy over the property and the court would give an order that the certificate be
revoked from the wrong person.
33. By the provision of section 21 and 22 of the Land Use Act, any alienation of land has to be
done only with the prior written consent of the governor obtained by the holder of the right

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 of occupancy. If this consent is not obtained, the transaction is null and void by virtue of
section 26 of the Land Use Act and the case of Adole v Gwar, and it could even be a
ground for revocation of a right of occupancy by the provision of sections 28(2)(a) and
28(3)(d) of the Land Use Act.
34. The difference between registration of titles and registration of instrument is that
registration of title is about the registration of the whole title in land and not merely an
individual transaction. Registration of instrument is the registration of an individual
transaction in land.
35. The power of the governor to grant and revoke a right of occupancy is not absolute, rather,
it is qualified. This is because, in granting a right of occupancy on the one hand, the
governor can only grant it to Nigerian citizens and cannot grant it to foreigners, by virtue
of section 1 of the Land Use Act and the decisions of the court in the cases of Heubner v
A.I.E. & P. Company Ltd, and Chief S.O. Ogunola & Ors v Hoda Eiyekole & Ors.
Another qualification to the power of the governor to grant a right of occupancy is that he
cannot grant the right to a person below the age of 21 years, by the provision of section 7
of the Land Use Act. Finally, the governor cannot exercise this right with respect of a land
under the control and management of the Federal Government of Nigeria. This is by the
provision of section 49(1) of the Land Use Act.
36. On the other hand, in relation to the power of the governor to revoke a right of occupancy,
it is also qualified, as the revocation has to be in compliance with the provision of section
28 of the Land Use Act, which is mainly for overriding public interest. The governor cannot
revoke the land for the purpose of granting it to another. The cases of Adole v Gwar;
Dantsoho v Mohammed, and Olohunde v Adeyoju.
37. The mortgagor cannot sell the mortgaged property while the loan remains unpaid. This is
because the mortgagor does not even have the title deeds of the property with him anymore.
A valid sale of a property can only be made when the title deeds are with the assignor.
38. When a donee of a specific power of attorney carries out an act that is totally outside the
scope of his appointment, such an act is not valid, and it is not binding on the principal.
39. Priorities in mortgages in the satisfaction of their various interests take some natural
pattern, which is ‘first made, first paid’. However, this law of nature may be altered in

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 certain circumstances. The circumstances are: where there is fraud in the first made, where
the first mortgage is not registered, or even estoppel.
40. It is important to include indemnity clause in in a deed in order to protect the
assignee/mortgagee/lessee in an event it turns out that the assignor/mortgagor/lessor has
no valid title to transfer the property and someone with a better claim has come for it, or in
an event the governor revokes the right of occupancy during the pendency of the
mortgage/lease.
41. When drafting the execution clause of a deed, always know when to use
‘assignor/assignee’, ‘mortgagor/mortgagee’, ‘lessor/lessee’, etc.
42. A lessee generally needs the consent of the landlord before he can sublet the property,
unless it was already initially part of the lease agreement that the lessee can sublet without
the prior consent of the governor.

Dassol!

May Allah make it easy for us!

Onimisi – fluent in silence!

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