certificate of occupancy offered under the Land Use Act 2004 PDF

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The certificate of occupancy issued under the Land Use Act 2004 is a prima facie
evidence of title to land in Nigeria, but its mere production does not by itself entitle the
party to a declaration of title....

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ASSESMENT COVER PAGE STUDENT’S/ASSESMENT DETAILS Law 402 Land Law II 20B BU/17C/LAW/2964 Anwar Auwal Sulaiman [email protected] Dr. Effiomg Esu 1953

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August 24th , 2020

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receipt_LAW 402 (2).pdf

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1 The certificate of occupancy issued under the Land Use Act 2004 is a prima facie evidence of title to land in Nigeria, but its mere production does not by itself entitle the party to a declaration of title. Discuss.

One of the most significant methods for making a claim for land ownership as well as in any landed properties exchanges is by having title documents that are important and recognized by different government rules and laws on such landed properties. Certificate of Occupancy is one of those. Certificate of Occupancy is a very important document when it comes to land. In fact, every owner of a land in Nigeria must acquire one in order for his ownership to be legal. A Certificate of Occupancy, also known as the C of O is a document issued by state governments in Nigeria to landowners and property buyers as a legitimate proof of ownership. Section 9 (1) of Land Use Act states1 “It shall be lawful for the Governor a. When granting a statutory right of occupancy to any person or b. When any person is in occupation of land under a customary right of occupancy and applies in the prescribed manner; or c. When any person is entitled to a statutory right of occupancy, To issue a certificate under his hand in evidence of such right of occupancy, as such certificate shall be termed certificate of occupancy…” This provision clearly states that the certificate is an evidence of right of occupancy not an absolute right. Moreover, in the case of Nkwocha v Governor of Anambra 2 State, where the court explained that, section 1 of the Act implies that it is unlawful for any private

1 LUA 2 (2000) 10 NWLR 116

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individual to proclaim outright rights over lands in Nigeria. Similarly, Savannah Bank v. Ajilo3 the Supreme Court of Nigeria declared as follows: “… with the promulgation of the LUA 1978 all the unlimited rights and interest Nigerians had in their lands were swept away and substituted with very limited right and rigid control of the use of their limited right by military Governors and local government.” When a person who has no title to the land in questions is issued C of O by the governor, the certificate becomes useless piece of paper. In the case of MULIMA v USMAN & ORS4 the Supreme Court per Okoro J.S.C. held: “The existence of a certificate of occupancy is merely a prima facie evidence of title to land it covers and no more nor does mere registration validate a spurious or fraudulent instrument of title or a transfer or grant which in law is patently invalid or ineffective” In that light, there are five legal ways to show ownership of land in Nigeria. These are; 1. By production of documents of title 2. By traditional evidence 3. By act of ownership on the land over a sufficient length of time to warrant the inference that the person is the true owner. 4. By act of long possession 5. By owning the adjacent land or connected land in circumstances rendering it probable that the owner of such connected or adjacent land would in addition, be the owner of the land in dispute.

3 (1989) I NWLR (Pt. 57) pg. 305 at 421 4 [2014] 16 NWLR Pt 1432 160 at 194

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The negligible certainty that an individual processions a C of O doesn't imply that such an individual has a superior title than someone else that doesn't have a C of O however whose foundation of title originates before the C of O in presence title to land lives in the land itself, where such a title is missing the acquirement of a report in the idea of C of O can't block the requirement for a substantial title before the property can be said to have been legitimately moved; in any case the individual is transferring what doesn't have a place with him, an individual can't give what he doesn't have this is called Nemo dat quad non habet. In conclusion, Certificate of occupancy alone is not absolute. In other words, a certificate of occupancy is not conclusive proof of title to land. In Adole v Gwar5, the Supreme Court, per Onu, JSC said: “A Certificate of Occupancy issued on the Land Use Act, it must be stressed, cannot be said to be conclusive evidence of any interest or valid title to land in favor of the grantee; it is only prima facie evidence of such right interest or title without more and may in appropriate cases be effectively challenged and rendered invalid, null and void”.

2. The intervention of equity in mortgage development has helped to streamline it as purely a security transaction but the Land Use Act has greatly impacted on its attraction. Discuss. 5 (2008) LPELR-189(SC) at page 17 of the E- Report

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A mortgage is a security interest in real property held by a lender as a security for a debt, usually a loan of money. It is a transfer of an interest in land (or the equivalent) from the owner to the mortgage lender, on the condition that this interest will be returned to the owner when the terms of the mortgage have been satisfied or performed. In other words, the mortgage is a security for the loan that the lender makes to the borrower. In most jurisdictions mortgages are strongly associated with loans secured on real estate rather than on other property (such as ships) and in some jurisdictions only land may be mortgaged. A mortgage is the standard method by which individuals and businesses can purchase real estate without the need to pay the full value immediately from their own resources. In Nigeria, we have two types of Mortgages. These are; 1. Legal Mortgage 2. Equitable mortgage 

Legal Mortgage transfers legal title to the mortgagee so that it prevents the mortgagor from dealing with the mortgaged property while it is subjected to the mortgage. This necessitates the creation of the mortgage to be under seal. Hence, it is the most secure form of mortgage.

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Equitable mortgage on the other hand, “involves the transfer of the borrower's beneficial interest in an asset to the lender by way of security for the performance of particular obligations, on the express or implied condition that such beneficial interest will be retransferred when the secured obligations are discharged. As only the beneficial interest in an asset is transferred, an equitable (rather than a legal) security interest is created”6

6 https://uk.practicallaw.thomsonreuters.com/9-378-7525? originationContext=document&transitionType=DocumentItem&contextData=%28sc.Default%29&comp=pluk

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There are laws that guide the creation of legal mortgage in Nigeria; 1. The conveyance Act 1881 which is applicable in states created from the old eastern and Northern Nigeria. 2. The Property and Conveyance Act 1951, applicable in old western and Midwestern regions. And 3. Mortgage and Property Law 2010 which is applicable in Lagos state. 4. Land Use Act 2004 which applicable in the whole nation. “The equity of redemption is different from the equitable right to redeem. Equity of redemption is the equitable interest which a mortgagor has in the land as the owner and arises in favor of the mortgagor as soon as the mortgage is created and continues until the property is sold or foreclosure occurs. Equity treats the mortgagor as continuing to be the owner of the property, subject only to the mortgagee's interest which is not a right to the mortgaged property but to the mortgage debt7. The mortgagor can redeem his property by paying the lender (mortgagee) the principal and the interest on the loan”. Mortgage is different from other forms of securities like lien, pledge, and charges. In some countries, lien and mortgage are the same thing since they all need the person who wants the loan to give out his property out. Pledge or bailment is giving out temporary possession of one’s property.

Mortgages and Land Use Act 2004 In the Land use Act, the law allowed the alienation of the right of occupancy by the way of mortgage. This is stated in section 21 of the Land Use Act where it says “It shall not be lawful

7 Okonkwo v. CCB (2003) 8 NWLR (pt. 822) 347; U.B.A. v. Okeke (2004) 7 NWLR (pt. 872) 393

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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 to be 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 approval of the appropriate Local Government.”8 However, this can’t be done without the consent of the governor or the appropriate local government permission. Again, in section 22 of the Lang Use Act where it states “It shall not be lawful for the holder of a statutory right of occupancy granted by the Governor to alienate his right of occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease or otherwise howsoever without the consent of the Governor first had and obtained: (1) Provided that the consent of the Governor(a) shall not be required to the creation of a legal mortgage over a statutory right of occupancy in favor of a person in whose favor an equitable mortgage over the right of occupancy has already been created with the consent of the Governor: (b) Shall not be required to the reconveyance or release by a mortgage to a holder or occupier of a statutory right of occupancy which that holder or occupier has mortgaged and that mortgage with the consent of the Governor: (c) to the renewal of a sub-lease shall not be presumed by reason only of his having consented to the grant of a sub-lease containing an option to renew the same. (2) The Governor when giving his consent to an assignment mortgage or sub-lease may require the holder of a statutory right of occupancy to submit an instrument executed in evidence of the assignment, mortgage or sub-lease and the holder shall when so required deliver the said 8 LUA 2004

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instrument to the Governor in order that the consent given by the Governor under subsection (1) may be signified by endorsement thereon.”9 A person does not need the governor’s consent when converting equitable mortgage to a legal mortgage. In the case of OKUNEYE VS FBN PLC10 it was held that “the deposit of a title document is an equitable mortgage not requiring the consent of the Military Governor on the basis that it is not alienation, but an agreement to alienate.” Consequently, the important thing is not the form of transaction i.e. mortgages, but the substance and its ability to alienate. It is suggested that any transaction that is incapable of alienating, transferring, conferring or vesting interest/title etc. would not come under the purview of S. 22, and therefore requires no consent. Also, when consent was given earlier on, no consent is required again. In the case of Moses Ola & Son LTD v Bank of the North11 it was held that “no additional or fresh consent is necessary when it was given earlier”. Another section to be conscience of is section 28(2)(a) where it says “the alienation by the occupier by assignment, mortgage, transfer of possession, sublease, or otherwise of any right of occupancy or part thereof contrary to the provisions of this Act or of any regulations made thereunder” which indicate that no consent of a governor is required here to alienate the right of occupancy by mortgage. The mortgagor has the duty to obtain the governor’s consent as indicated in the case of Ugochukwu v coop Bank Nig. Ltd12 In conclusion, proficiency of mortgage under the Act is a long way from being a fantasy. Be that as it may, it is likewise not in full acknowledgment. The Land Use Act ought to determine a time period inside which the consent of the Governor is to be given. This would reduce the

9 LUA 2004 10 (1996) 6 NWLR AT PART 457 11 (1992) 3 NWLR 377 12 (1996) 6 NWLR (pt 456)524

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postponements related with such consent giving procedure. All the more in this way, the Governor's ought to have more strong methods for confirming the case to right of inhabitance of any person before the issuance of the Certificate of Occupancy. This would add to the worth and weight of the endorsement and most likely make it a decent base of title.

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