Generally, property transactions vary according to the terms, the contracting parties, and the duration of the contract.
Also, the transaction could either be for commercial, residential, warehouse/industrial purposes. Let’s examine the different categories of property transactions under law.
It would be a TENANCY where it is between a landlord or landlady/tenants, and it is for a yearly duration, that is not more than 3 years in some instances.
Once a property transaction is above 3 years, the law states that it is a LEASE, and as such, it should be registered as an instrument. While the parties are denoted as Lessor and Lessee.
Also, there is an arrangement where the interest over a landed property could be used as a collateral security for loan. In a circumstance where the borrower failed, the legal or equitable interest would be transferred to the lending party for failure of repayment of the loan. This is called MORTGAGE, and the parties are known as Mortgagor and Mortgagee.
Technically, the law recognises the rights and legal interests of the owner(s) over their properties. That is enshrined in this legal maxim, “cuius est solum, eius est usque ad coelum et ad inferos” which ordinarily means, “whoever is the owner of the soil, it is theirs all the way to heaven and all the way to hell”.
The legal implication of this is that the land owner has a right within the law limit to sue any trespassers he/she suspects on his/her land. However, there are recognised rights that a legal occupant of a property transaction has, and they are as follows;
- Possessory Rights:
Under any property transactions, either lease, tenancy, or mortgage, the legal occupant has a right to possess the land or landed property for the sole purpose of the contract that was entered into.
However, the distinction in these arrangements is that possessory rights over the land would revert to the owner once the contract has been concluded.
Although, in mortgage transactions, the mortgagee would only be able to exercise such a right if the mortgagor has failed to repay the loan standing to his credit. That is only when the mortgagee would be allowed under the law to take possession over the security.
Exception to reversion of possession:-
A clear-cut exception to possession is where a legal occupant activates or exercises his/her right of first option to buy, which means, a contractual agreement that gives a potential buyer the first opportunity to purchase a property or asset at a specific price.
- Acquire Proper Title:
The cardinal pillar that property transactions thrives on is title acquisition or conveyance of title. Before a legal occupant proceeds to any property transactions within Nigeria. These are the precautions to observe;
- Ask a lawyer to conduct due diligence on the property at land registry, court, and other relevant institutions — AGIS & LIMS/Lagos State Land Administration Portal.
- Ensure the property is free from encumbrances — a pending court case or mortgage.
- Ensure you’re dealing with the proper parties. In circumstances where the land or landed property is jointly owned by a family or it is an estate.
- Right of way/Access Road:
It is a paramount factor to any property transactions that a right of way must be provided — also known as Access road.
A legal occupant of a property should be allowed a free ingress and egress to and fro of their property. It would be pointless if an occupant of a leased warehouse can not have access to the leased premises. That itself could amount to principal breach of the contract.
Conclusively, these rights are exhaustive, and it would be a daunting exercise if we examine all of it at a stretch.