Deed of Assignment in Nigeria: What Buyers Need to Know

Buying land or a house in Nigeria involves more than paying the agreed purchase price and taking possession of the property. The transaction must be properly documented to establish the transfer of the seller’s interest to the buyer and to protect the buyer’s interest in the property.

One of the most important documents used for this purpose is a Deed of Assignment.

A Deed of Assignment is the legal instrument through which a person who holds an interest in land transfers that interest to another person. It is commonly used in the sale of land, houses and other interests in real property.

However, signing a Deed of Assignment does not mean that a buyer can ignore title verification, Governor’s Consent, stamping or registration. The document forms part of a broader property transaction and must be properly prepared and perfected.

This article explains what a Deed of Assignment is, what it should contain, when it is required, and the important steps a buyer should take before and after signing one.

What Is a Deed of Assignment?

A Deed of Assignment is a formal legal document by which the holder of an interest in land or property transfers that interest to another person.

The person transferring the interest is called the Assignor, while the person receiving the interest is called the Assignee.

For example, where Mr A owns a property and sells it to Mr B, the Deed of Assignment records the transfer of Mr A’s interest in the property to Mr B.

The deed normally identifies the property, the interest being transferred, the consideration paid or agreed to be paid, the parties to the transaction and the terms governing the transfer.

The document therefore provides formal evidence of the transaction and the interest which the buyer has acquired.

When Is a Deed of Assignment Required in Nigeria?

A Deed of Assignment is generally used where an existing interest in land is being transferred from one person to another.

Common situations include:

• Sale of a completed house;
• Sale of a parcel of land;
• Transfer of an existing right of occupancy;
• Transfer of an interest acquired under a previous Deed of Assignment;
• Transfer of property from one entity or person to another;
• Certain commercial property transactions.

The appropriate document depends on the nature of the transaction and the interest being transferred. A lease, sublease, deed of assent, deed of gift, mortgage or other instrument may be appropriate in different circumstances.

A lawyer should therefore determine the correct instrument from the title and nature of the transaction rather than simply using a standard document.

What Does a Deed of Assignment Transfer?

A Deed of Assignment does not create ownership out of nothing.

The Assignor must have an interest capable of being transferred. The deed transfers the Assignor’s existing interest, subject to the terms of the transaction and applicable law.

For example, if the Assignor holds a statutory right of occupancy with a particular unexpired term, what is being transferred is the Assignor’s interest in that right of occupancy.

This is why title verification must come before execution of the Deed of Assignment.

A beautifully drafted deed cannot cure a defective root of title.

What Should a Deed of Assignment Contain?

A properly prepared Deed of Assignment should accurately reflect the transaction and the property being transferred.

Although the precise contents will depend on the circumstances, important provisions commonly include the following.

1. Date of the Deed

The deed should state the date on which it is executed.

The date is important for identifying when the instrument was made and for determining the applicable legal and procedural requirements.

2. Details of the Assignor and Assignee

The full names and relevant addresses or descriptions of the parties should be clearly stated.

Where a company is involved, its proper corporate name and relevant particulars should be used.

The person executing the deed on behalf of a company must also have proper authority to do so.

3. Recitals

The recitals explain the background to the transaction.

They may identify:

• How the Assignor acquired the property;
• The title document under which the Assignor holds the property;
• The location and description of the property;
• The agreement between the parties;
• The consideration for the transaction.

The recitals are particularly useful because they provide the background against which the operative provisions of the deed are understood.

4. Description of the Property

The property must be sufficiently identified.

Depending on the transaction, this can include:

• The location;
• Plot number;
• Block number;
• Survey plan details;
• Land size;
• Beacon numbers;
• Description of buildings or improvements;
• Title registration details.

A vague or inaccurate description can create serious problems when the document is submitted for registration or when the parties later dispute the property transferred.

5. Consideration

The consideration paid or agreed to be paid should be properly stated.

Where the transaction is a sale, the consideration will ordinarily be the purchase price.

The deed should also reflect the actual commercial arrangement between the parties rather than an artificial figure inserted merely to reduce fees or taxes.

6. Operative Clause

The operative part of the deed is the provision by which the Assignor formally assigns the relevant interest to the Assignee.

It should clearly identify the interest being transferred and the property to which that interest relates.

7. Covenants and Representations

The deed may contain promises made by the Assignor concerning the property and the title.

Depending on the transaction, these can address matters such as:

• The Assignor’s authority to transfer the property;
• Absence of undisclosed encumbrances;
• Quiet enjoyment;
• Further assurance;
• Indemnity against specified title defects;
• Delivery of title documents.

The precise covenants should be drafted according to the risks identified during due diligence.

8. Execution and Attestation

The parties must execute the deed in accordance with applicable legal requirements.

The execution clause should also provide for proper witnessing and attestation.

Where a company is involved, the execution requirements applicable to companies should be observed.

What Should a Buyer Check Before Signing a Deed of Assignment?

A buyer should not wait until after signing the deed before investigating the property.

Before execution, the buyer should establish that the seller actually has the interest being transferred and that there is no legal or practical impediment to the transaction.

Conduct a Title Search

The buyer should conduct an appropriate search at the relevant Land Registry and obtain available title information.

This can reveal important matters such as:

• The registered owner;
• Existing assignments;
• Mortgages;
• Charges;
• Cautions;
• Restrictions;
• Registration particulars;
• Other interests affecting the property.

For Lagos property, the relevant land records and applicable land administration procedures should be properly investigated.

Verify the Seller’s Root of Title

Do not rely solely on the seller’s Deed of Assignment or Certificate of Occupancy.

The buyer should investigate the root of title and determine how the seller acquired the interest.

Depending on the circumstances, this could involve examining:

• A Certificate of Occupancy;
• Deed of Assignment;
• Deed of Assent;
• Governor’s Consent;
• Allocation documents;
• Previous title documents;
• Survey plans;
• Court judgments;
• Probate documents;
• Other instruments forming part of the title history.

Confirm the Survey

The survey should correspond with the property being purchased.

The buyer should confirm the location, dimensions, boundaries and survey particulars and, where necessary, investigate whether the land is affected by government acquisition or other planning restrictions.

Check for Existing Encumbrances

A property can be subject to a mortgage, charge, caution, litigation, tenancy, family claim or other interest.

The buyer should investigate these matters before committing the purchase price.

This is particularly important because possession of the property does not necessarily mean that the person in possession has an unencumbered title.

Is Governor’s Consent Required for a Deed of Assignment?

Where the transaction involves the assignment of a statutory right of occupancy, section 22 of the Land Use Act requires the Governor’s consent before the right is alienated by assignment, subject to the statutory provisions and exceptions in the Act. Section 26 further provides that a transaction or instrument purporting to confer or vest an interest in land contrary to the Act is null and void.

This is why Governor’s Consent is an important part of property title perfection in transactions involving statutory rights of occupancy.

The buyer should therefore not assume that signing the deed completes the transaction.

The transaction should be properly processed for the requisite consent and registration.

For a fuller explanation, see “Understanding Governor’s Consent” and “Property Title Perfection and Governor’s Consent.”

Does a Deed of Assignment Have to Be Registered?

Proper registration is an essential part of perfecting a land transaction.

Registration provides an official record of the instrument and protects the buyer’s interest against competing claims and subsequent dealings, subject to the applicable law.

In Lagos, land transactions are administered under the applicable land registration framework and procedures of the Lagos State Government.

A buyer should therefore ensure that the Deed of Assignment is not simply signed and kept in a drawer.

The necessary steps should be taken to have the transaction properly stamped, consented to where required and registered.

What Is the Difference Between Signing a Deed of Assignment and Perfecting Title?

These are not the same thing.

Execution refers to the parties signing the Deed of Assignment.

Stamping concerns the payment and endorsement of the applicable stamp duty on the instrument.

Governor’s Consent concerns the statutory consent required for the alienation of a statutory right of occupancy.

Registration involves recording the transaction in the appropriate land registry.

These steps form part of the process of perfecting the buyer’s interest.

A buyer should therefore distinguish between having a signed Deed of Assignment and having a properly perfected title.

Does a Deed of Assignment Need to Be Stamped?

Yes. A Deed of Assignment is a dutiable instrument.

The current federal stamp-duty framework specifically lists Deeds of Assignment and deeds of conveyance or transfer on sale of property among chargeable instruments.

The current tax framework also provides for the stamping of chargeable instruments within the prescribed period and restricts the evidential use of an unstamped dutiable instrument, subject to the applicable statutory provisions.

Stamp duty is therefore not simply an administrative formality to be ignored after the transaction.

How Much Does It Cost to Register a Deed of Assignment in Lagos?

The cost depends on the transaction, the property’s assessed value and the applicable charges.

Lagos State’s published land-service schedule currently identifies:

• Consent Fee — 1.5% of Fair Market Value;
• CGT on Land Services — 0.5% of Fair Market Value;
• Stamp Duty on Land Services — 0.5% of Fair Market Value; and
• Registration Fees on Land Services — 0.5% of Fair Market Value.

These charges should not be confused with the professional fees of the lawyer, surveyor or other professionals involved in the transaction.

For a more detailed explanation of the current Lagos figures, see “How Much Does Governor’s Consent Cost in Lagos?”

Who Pays for the Deed of Assignment?

The parties can agree on how the costs of the transaction will be shared.

However, the buyer should not assume that every charge is automatically the buyer’s responsibility, or that every cost described as a “documentation fee” is a statutory government charge.

The parties should establish in advance:

• Who pays the legal fees;
• Who pays stamp duty;
• Who bears the consent and registration costs;
• Who pays applicable taxes;
• Who bears survey and search expenses;
• Who is responsible for obtaining outstanding title documents.

The agreement between the parties should be clear on these matters.

Common Mistakes Buyers Make With Deeds of Assignment

Signing Before Conducting Due Diligence

This is one of the most serious mistakes.

A buyer should not sign first and investigate later.

See “How to Conduct Due Diligence Before Buying Property in Lagos” and “Five Legal Checks Before Buying Land in Nigeria.”

Assuming a Certificate of Occupancy Guarantees Everything

A Certificate of Occupancy is an important title document, but a buyer should still investigate the title, identity of the seller, encumbrances, location and other relevant matters.

See “How to Verify a Certificate of Occupancy in Nigeria.”

Using an Incomplete Property Description

The property description in the deed should correspond with the survey and title documents.

Errors in plot numbers, survey particulars, dimensions or location can create serious complications.

Using a Generic Deed Without Reviewing the Title

A Deed of Assignment should reflect the actual transaction.

A template downloaded from the internet cannot replace proper title investigation and transaction-specific drafting.

Failing to Obtain Governor’s Consent Where Required

A buyer who signs the deed but does not properly process the required consent has not completed the title-perfection process.

Failing to Register the Instrument

Keeping an executed deed without completing the necessary registration process leaves the transaction improperly perfected.

Paying the Full Purchase Price Without Proper Documentation

The payment structure should be considered alongside the documentation and title-perfection process.

Where appropriate, the transaction should contain safeguards that protect the buyer if a title defect or other problem is discovered.

Can a Deed of Assignment Be Used to Transfer Family Land?

A Deed of Assignment does not by itself cure a lack of authority to sell.

Where the property belongs to a family, the persons authorised under the applicable customary law and circumstances must be properly identified and involved.

A buyer should therefore establish that the persons executing the deed have the legal authority to transfer the family interest.

This is one reason why family land transactions require particularly careful due diligence.

Can a Deed of Assignment Transfer Disputed Land?

A deed should not be treated as a substitute for resolving a title dispute.

Where there is an existing dispute, litigation, adverse claim, government acquisition or other serious defect affecting the property, the buyer should understand the risk before proceeding.

A seller cannot give a buyer a better title than the seller is legally capable of transferring.

Where the property has a disputed title, legal advice should be obtained before money is paid or documents are executed.

What Documents Should a Buyer Keep After the Transaction?

A buyer should maintain a complete transaction file containing, where applicable:

• Executed Deed of Assignment;
• Evidence of payment of purchase price;
• Previous title documents;
• Certificate of Occupancy or other root title;
• Survey plan;
• Governor’s Consent;
• Evidence of stamping;
• Registration evidence;
• Search reports;
• Receipts and official payment evidence;
• Relevant correspondence;
• Building approval documents where applicable;
• Other documents relating to the transaction.

These documents can become extremely important if the property is later sold, mortgaged, inherited or involved in litigation.

Final Checklist Before Signing a Deed of Assignment

Before signing, a buyer should be able to answer yes to the following questions:

1. Have I verified the seller’s identity?
2. Have I established the seller’s authority to sell?
3. Have I investigated the root of title?
4. Have I conducted an appropriate search?
5. Have I confirmed the survey and location?
6. Have I checked for government acquisition?
7. Have I investigated mortgages, cautions, litigation and other encumbrances?
8. Does the property description in the deed match the title and survey?
9. Have I reviewed the consideration and payment terms?
10. Does the deed properly protect my interests?
11. Have I established the applicable consent, tax, stamping and registration requirements?
12. Have I agreed who will bear the transaction costs?
13. Have I made arrangements for proper title perfection after execution?

If any of these questions cannot be answered satisfactorily, the transaction should not simply proceed because the seller is demanding immediate payment.

Conclusion

A Deed of Assignment is one of the most important documents in a Nigerian property transaction because it records the transfer of an existing interest in land from the Assignor to the Assignee.

But a Deed of Assignment is only as reliable as the title behind it and the legal process used to perfect the transaction.

Before purchasing property, the buyer should verify the seller’s title, investigate the property, confirm the survey and boundaries, check for encumbrances, ensure that the deed accurately reflects the transaction, and complete the applicable stamping, Governor’s Consent and registration requirements.

If you are buying land or property in Lagos or elsewhere in Nigeria and need your title investigated or your Deed of Assignment reviewed, drafted or processed, Lexforte Attorneys can assist with the transaction from due diligence through documentation and title perfection.