A deed of assignment is an important document to have when transferring of ownership of land or property from one party to the other. There has to be document agreement between a buyer known as assignor (the seller) and assignee (the buyer or the purchaser)before transaction can be completed.
What is A Deed of Assignment?
A Deed of Assignment is an essential legal land document that records a sale of land. Besides that, it transfers interest and title in real property from one party to another, starting from the commencement date stated in the document.
A deed of assignment’s major function is to transfer an interest in or assign the title of property from a seller (an assignor) to a new buyer (the Assignee). A good deed of assignment must include some details and they are listed below:
- Names, address, status of the transaction’s participants.
- Day on which they transferred the property from the seller (vendor) to the buyer.
- The nature of the assignor’s (vendors’) title.
- Entire description/ specifications, including any fittings and fixtures of the property.
- The history of the property being transferred from the time it was initially obtained to the current moment of sale, including all preceding documentation.
- Details about a verifiable document the property bears.
- The amount of money paid in a property transaction (buy price) and the vendor’s readiness to accept the price paid for the property.
- The nature of the transaction and the assignor’s capacity (vendor).
- Both parties to the transaction agree to keep the agreements.
- The parties’ signatures, as well as the signatures of the witnesses to the transaction, are necessary.
- Plan for the survey.
- Information about the lawyer who prepared the deed.
- The Governor’s assent must be signed and validated in this section.
What is The Importance of A Deed of Assignment?
It a legal contract between two parties to a real estate transaction therefore you can not overemphasize its important. Some of its important are:
1. It is Essential For Transferring Land To The Other Party Before It Expires
It covers not only the basic requirements but also the precise terms agreed upon by the transaction’s participants. A real estate lawyer should draft a deed of assignment to ensure that it accurately represents the interests of all parties involved in the transaction. The assignee’s legal counsel creates the deed of assignment, which is subsequently vetted and executed by the assignor (vendor). The assignor’s lawyer may prepare the deed for scrutiny by the assignee’s lawyer if the property is part of an estate.
2. It Acts As A Legal Root of Title To The Property
A deed of assignment is also important since it serves as a valid root of title to the land.
It serves as valid evidence of transfer, particularly when the legitimacy of the land is disputed or a third party attempts to claim ownership of the same land.
Note: It’s also crucial that they register the deed of assignment with the relevant land registry. Especially where the land is located for perfection once they have exchanged it between the parties to the transaction. Perfection comes at the post-completion stage, which includes receiving the governor’s approval, stamping the deed of assignment, and ultimately, registration of the document to establish legal proof that the property has changed hands and to inform the public that the property has a new owner.
What Is The Purpose of The deed?
It’s essential to always discuss issues like this with your lawyer for clarifications, especially if you want to buy land. A deed’s purpose is to transfer legal ownership of a property or asset from one person or corporation to another.
Who Needs To Sign A Deed of Assignment?
The assignor and the assignee(s) must both sign the deed, and they must tick the corresponding box (or boxes) for each signature. However, if there is a joint tenancy and two people own the policy. Therefore, both policyholders must act as assignors.
How Much Does The Deed of Assignment Cost in Nigeria?
A Deed of Assignment can only be prepared by a lawyer in Nigeria.
There is a scale of charges to checkmate the charges of lawyers for handling land matters. But because this scale of charges is primitive. Lawyers would rather negotiate their percentage in real estate transactions based on the value of the assets to be purchased. This is because they also permit them to engage in a simple contract for any services, including deed preparation.
Several criteria determine the percentage a lawyer may charge to produce a deed of assignment. Expertise or experience, as well as the value of the property to be purchased, are among these criteria.
Most lawyers in Nigeria typically charge between 5% to 10% of the cost of the property to prepare a deed of assignment. Therefore, for a property being purchased at N40,000,000, a lawyer may charge N2,000,000 (5%) of the cost to prepare deeds and other necessary documents.
In some situations, the higher the property’s worth, the lower the percentage. There could be situations where a lawyer may charge above 10% of the total cost of the property. That’s if the purchase price is very low, or even less than 5%. Or if the property’s value is very high, or other circumstances such as an existing relationship between the lawyer and the purchaser.
Finally, in Nigeria, there is no set fee or cost for creating a deed of assignment. The price of the property typically decides the cost of a deed of assignment. Besides that, other factors, such as a prior relationship, could influence its cost.
Who Prepares The Deed of Assignment?
To avoid misunderstanding along the way, you should know who has to prepare the deed of assignment. The assignee’s legal practitioner drafts the deed of assignment, which they hand to the assignor (vendor) for vetting and execution. If the property is part of an estate, the assignor’s lawyer may prepare the deed for examination by the assignee’s lawyer.
Deed of Assignment in Nigeria – How To Register
Following the execution of the Deed of Assignment, the Governor must properly register and approve it in compliance with the Land Use Act, LFN 2004.
In essence, after parties to a property transaction execute a deed of assignment, the procedure, and steps for registering the executed deed of assignment in Lagos State or any other Nigerian jurisdiction entail three primary steps: Obtaining Governor’s Consent, Stamping of Deed, and Registration.
1. Obtain A Governor’s Consent
When they already registered the purchased land in the seller’s name at the registry. They should apply with the landform 1c accessible at the lands registry. The purchaser and the vendor should sign the form.
List of Things To Submit Your Governor’s Consent Application With
- A covering letter to the Director of the Lagos State Department of Lands and Housing.
- After inspecting the property and its values, they’ll pay the consent fee.
- Both parties’ current tax clearance certificates. They only require the mortgagor’s information in the case of a mortgage.
- When one party is a corporation, the corporation must provide the government with revenue certificate papers for its employees and current tax clearance certificates for the directors.
- There will be a demand for the building plan in the case of developed property.
- The Deed of Assignment for which they requested its consent in six (6) copies.
- Proof of up-to-date ground rent and legal charges payment.
- Proof of payment of development levy.
- Payment of charting and endorsement fees receipt.
- A Certified True Copy (CTC) of the assignor’s land document is accessible from the land’s registry.
2. Pay Stamp Duties
Following the Governor’s approval, the solicitor must guarantee that they pay for the transaction’s stamp duty. They recommend that consent be obtained prior to the payment of stamp duties, as you cannot recover the duties you paid if the Governor rejects consent. They levy stamp duties on a variety of transactions, one of which being the transfer of a property interest.
The Consequences of Failure To Pay Stamp Duties
- They will not accept the instrument for registration.
- The instrument will be inadmissible in evidence in court as they stipulated it under section 22 of the Stamp Duties Act.
- In cases of late registration, it will attract a penalty.
3. Register The Deed
A deed of assignment or conveyance that alienates a land interest is important to register. This is because it is a document that affects land in which one party confers or extinguishes a right or title interest in land in favor of another party.
Although registration does not cure defects in title, a deed of assignment is a registrable instrument that they must register within 60 days after execution. This is according to section 25 of the Lagos State Land Instrument Registration Law.
Advantages of Registering A Deed of Assignment
There are several advantages to registering a deed of assignment, they include:
- It shows that the title is free of entanglements.
- It is difficult to plead an instrument that has not been registered since it is inadmissible in evidence.
- Where there are competing instruments registered, it gives priority to the first in time.
Who Pays For The Deed of Assignment?
As with any other commercial transaction, sellers provide receipts to buyers as confirmation of payment. In this context, the deed of assignment is also relevant. The buyer does not pay for receipts, rather the seller owes the buyer the responsibility of receiving a receipt. The Nigerian law compels the seller to execute a deed of assignment to the buyer.
In this scenario, the family’s leader and the most important members owe you a duty to sign the paper.
In any land transaction in Nigeria, a deed of assignment is crucial because it serves as the main document between the vendor and the purchaser.
It highlights that they have completed all negotiations, investigations, and other necessary due diligence. Besides that, it shows that they’ve paid the purchase price and the parties to the transaction have met all other necessary conditions. Also that the vendor has transferred all of his rights to the property.
The parties involved must record the deed of assignment with the state government. They should do it where the land is located once all parties to a land transaction have signed it. The land-use legislation states that the registration of a land’s title must start with the governor’s approval.
Need a property, then check out the list of various estate that we have by clicking on https://www.bayhanhomes.com/
Call 08138623765 or CHAT ME ON WHATSAPP