BARR, CHIGOZIE EZEKIEL
victorezekielc@gmail.com/+2348034997413
The consent of a Governor of a
State where the land is situated must be sought and obtained – Section 22 of Land Use Act; Savannah Bank v. Ajilo (1989) 1 NWLR (Pt.
97) 305; Awojugbabe Light Industries Ltd. v. Chinukwe (1995) 4 SCNJ 162; (1995)
4 NWLR (Pt. 390) 379.
Where the land is subject to a
customary right of occupancy, the consent of the appropriate local government
is required so long as the transfer is not one subject to the Sheriff and Civil
Process Law. Under this, section 21 states
that “it shall not be lawful for any customary right of occupancy or any part
thereof to be alienated by assignment, mortgage, transfer of possession,
sublease or otherwise howsoever – (a) without the consent of the Governor in
cases where the property is sold by or under the order of any court under the
provisions of the applicable Sheriffs and Civil Process Law; or (b) in other
cases without the disapproval of the appropriate Local Government.”
Failure to obtain the consent of
the Governor before actual mortgage itself makes the transaction null and void
– section 26 of Land Use Act.
The consent is only required
where the legal interest is transferred and not for an agreement to transfer
the interest.
The consent of the Governor is
also not required for creation of debentures, since a deed of debenture is a
charge on the floating assets of a company and not a charge on the land which
requires the consent of the Governor – Nig. Ind. Dev. Bank Ltd. v. Olalomi Ind.
Ltd. (2002) FWLR (Pt. 98) 995.
The consent of the Governor is
required by law to be granted by him although he can delegate his authority for
granting consent to a State Commissioner. In U. B. N Plc v. Ayodare & Sons
Nig. Ltd. (2007) All FWLR (Pt. 383) 1 at 23, the Supreme Court, per
Oguntade JSC, stated that “… section 22 of the Act postulates that the
Governor, shall sign the letter granting consent …” In Union Bank Nig. Plc. Ishola
(2002) FWLR (Pt. 100) 1253, the court held that where the Governor’s
power to grant consent are properly delegated vide a legal notice to the State
Commissioner for Housing and Environment who was in charge of land matter, the
consent granted by the latter to the mortgage transaction was proper and valid.
It should be noted that where the
approval for consent is to be granted to a mortgagee, the Governor should try
and sign the letter. Where however the Governor grants the consent through his
delegate (a State Commissioner), the Commissioner must convey the approval
under his hand and not under the hand of another state official. In Federal
Mortgage bank Plc. v. Babatunde (2000) FWLR (Pt. 3) 385, the court held
that there is no evidence to show that
the Governor delegated his powers under the Act to any body, let alone to the
Permanent Secretary, Ministry of Works, Lands, Housing and Environment, Kwara
State on whose behalf the letter of approval was written.
It is the duty of the mortgagor
to apply for the grant of the consent of the Governor and not the mortgagee. A
common problem in mortgagees is where the mortgagor has collected the money,
deposited the title deeds and executed the mortgage documents with the
expectation that he will apply for the consent of the Governor, but only to
turn round and alleges that the consent was not obtained or even to frustrate
the grant of the consent – Ugochukwu v. C. C. B (2000) 1 NLLC 361 at
383; Union Bank of Nig. Plc v. Orharhuge (2000) 2 NWLR (Pt 645) 795. The
courts have held that such person would not be allowed to turn round and claim
that because the consent was not obtained, the transaction was null and void.
However in practice, it is the mortgagee that seeks for the consent since he is
the one that stands to lose if the mortgage is set aside for lack of consent.
The most important documents required to procure the consent of the
Governor are:
1.
Application for consent by way of written letter
or a duly completed consent form.
2.
Duly executed deed conveying the agreement
between the two parties.
3.
Tax clearance certificate of the parties.
4.
Receipts of payment of ground rent, consent fee,
inspection fee, tenement rate and other charges imposed on the property.
SEARCH REPORT
The search report depends on
whether the borrower is a natural person or a company.
The search report should contain
the following where the borrower is a natural person –
1.
Date of the search
2.
Name of the borrower
3.
Name of the person giving security, if different
from borrowers
4.
Description of the property
5.
Name of the property
6.
Encumbrances (if any), Registrations and other
adverse facts as may be observed from:
a)
Physical inspection of the land or building,
that is, whether the property really exists and if it is vacant or occupied;
b)
The register at the land registry, that is, to
obtain the details of the property in the lands registry of the State; and
c)
Government acquisition, that is, whether the
property is within an area compulsorily acquired by government or proposed to
be acquired.
The search report should contain
the following where the borrower is a company and intends to use the property
as security –
1.
Name of the company (borrower)
2.
Date of the search
3.
Date of incorporation
4.
Registration number
5.
Name and address of Shareholders of the company
6.
Particulars of company Directors
7.
Borrowing powers of the Company
8.
Any registered charge against the company’s
assets
9.
Annual returns filed
10. Encumbrances,
if any.
1 comment:
Beautifully written counsel. Cheers
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