A land purchase agreement in Nigeria is a formal contract by which a vendor agrees to sell, and the purchaser agrees to buy a piece of land under specific terms and conditions spelled out in writing in the agreement signed by both parties.
A land purchase agreement is usually referred to as "Contract of Sale" or "Sale Agreement." It can be simple with little information, or it can be detailed containing all information and future obligations of the parties in respect of the land to be purchased.
It is important to note that where one of the parties defaults under any terms agreed upon in the land purchase agreement, then the contract can be terminated under the provisions contained therein.
ESSENTIAL ELEMENTS OF A LAND PURCHASE AGREEMENT
A land purchase agreement must contain the following terms:
a) Parties Clause
A land purchase agreement is created when two parties deal with each other. There is a minimum of two different parties involved in the land purchase agreement. i.e., the Vendor and the Purchaser. The land purchase agreement must contain the full details of the Vendor and the Purchaser, such as Names and addresses
b) Recital Clause
The recital clause in the land purchase agreement states the brief details about the land and how it was derived. Such clauses will explain how the vendor became the owner of the land he is about to dispose of.
c) The Purchase Price/Consideration Clause
The purchase price is the essential element of the land purchase agreement, and it should be mentioned clearly in the contract.
The method of payment of the purchase price must be equally mentioned, either to be paid in full or in installments.
d) Covenants/Indemnity Clause
The Vendor and the Purchaser must undertake specific responsibilities under the land purchase agreement. The vendor must agree to indemnify the purchaser against all claims, demands, disturbance, or interruption, which may arise from any defect in the purchaser's rights/title to the land. In contrast, the buyer must undertake to make the full payment for the land if the purchase price is to be paid on installments. The buyer must also undertake to abide by all other covenants stipulated in the agreement.
e) Termination Clause
It must be expressly stated the mode of termination of the agreement where one of the parties defaults under any terms agreed upon in the agreement.
DEED OF AGREEMENT FOR LAND
After the execution of the contract of sale by the parties and upon the payment of all the purchase price, the parties shall further execute between themselves a Deed of Assignment or Conveyance. A Deed of Assignment is the primary document that transfers ownership in the land from the vendor (now assignor) to the buyer (assignee).
The deed of assignment is a registrable instrument, and therefore, it must be perfected and registered with the state government where the property is located.
In summary, a contract of sale is the first document to be drafted in respect f any land purchase. When the buyer has made the full payment, the parties may go-ahead to prepare and execute the deed of assignment, also known as a deed of conveyance.
Before the purchase of land, the buyer must verify and conduct a search in respect of any properties to be purchased. It is crucial to retain the services of a lawyer to finalize the purchase of any property in Nigeria.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.