WEEK 6: SALE OF LAND PART 1--TASKS

COUNCIL OF LEGAL EDUCATION

NIGERIAN LAW SCHOOL

LAGOS CAMPUS

PROPERTY LAW PRACTICE DEPARTMEMNT

2016/2017 ACADEMIC SESSION

WEEK 6: SALE OF LAND PART 1

DECEMBER 14, 2016

TASKS

Mr. Enefaa Chamberlain lives at 45, Teller Road, Onitsha and he is the sole importer of Latung laptops in Nigeria. He also has interests in real estate, telecommunications and agro-allied businesses. He is from Bayelsa State, Nigeria. He purchased the following properties through his estate consultant, Prince Ignatius Bako, of Brock Estate Brokers and Property Consultants:

(1)   The 4-bedroom duplex at 22, Bank Road, Ikoyi, Lagos with Title number: LO/986597;

(2)   The sixty-feet wide warehouse at 31, Kreku Street, Auchi Road, Benin City, Edo State;

(3)   The block of six flats at 44, Apple Avenue, Enugu, Enugu State;

(4)   A vacant plot of Land at Kilometre 77, Zaria-Kano Road, Kaduna, Kaduna State; and

(5)    The two-winged duplex at 13, Works Road, Wuse, Abuja registered as 87/87/2011

Mr. Enefaa Chamberlain had retained the services of Prof Owena Briggs, SAN, under a general retainership, which began in 2012. In 2013, Mr. Chamberlain applied for and obtained Certificate of Occupancy No 894546 dated 09/07/2013 and registered as 41/41/1034 in respect of the property in Benin. Prof Briggs acted for Mr. Chamberlain for this purpose. In view of the current economic recession in the country, Enefaa Chamberlain has decided to source for funds to expand and boost the liquidity of his businesses. To this end, he intends to do the following:

1. Obtain a loan of N350 million from Nigeria Agric Bank Plc (having its head office at 61 Abba Crescent, Area 10, Garki, Abuja), and plans to use the property in Ikoyi as security for the loan.
2. Dango Ventures Nigeria (a business outfit owned by Mr Terry Bam) having its address at 64, Ogu Lane, Enugu, has agreed to purchase the property in Enugu for N210 million;
3. Mr Terry Bam is personally negotiating purchase of the property in Benin City, Edo State. The property is to be sold for N300 million
4. Enefaa Chamberlain has just rounded off negotiations with the National Secretariat of National Association of Nigerian Students (NANS) in respect of the right wing of the property in Wuse, Abuja. NANS intends to take the property for a term of seven years, for use as its national headquarters.
5. Den-Cruz Nigeria Limited (of 13, Asokoro Road, Wuse, Abuja) has agreed with Enefaa Chamberlain to take the second wing of the property in Wuse on a three-year lease, which the company plans to use as the official residence for its Managing Director, Dr Oyin Mogaji.

Meanwhile, Enefaa Chamberlain has instructed his lawyer (Prof Briggs) to undertake the following:

(a)   to draft a document, for the purpose of authorizing Brock Consulting Limited to find a buyer and sell the property in Kaduna for a sum not less than N70 million within six months of receiving the instructions; and

(b)   to draft a document containing instructions on disposal of Enefaa Chamberlain`s assets and properties on Enefaa Chamberlain`s death. Enefaa Chamberlain wishes to be buried inside the sitting room of his residential house at 45, Teller Road, Onitsha, when he dies. He wishes also that his three children, Tom Chamberlain (19 years old), Mary Chamberlain (13 years old) and Rita Chamberlain (22 years), together with his friend, Prince Jibola Jaja to be in charge of managing his estate, after his death. Enefaa Chamberlain would want Prof Briggs to also reflect these wishes in the said written instructions.

For these two instructions, Prof Briggs has written Enefaa Chamberlain for a professional fee of N500,000:00 and has asked Enefaa Chamberlain to make a down payment to him N300,000:00 “on account.” Enefaa Chamberlain intends to object to Prof Briggs` demand for N500,000:00 as professional fees. Enefaa Chamberlain is of the opinion that since Prof Briggs has been collecting N1 million annually from him (Enefaa Chamberlain) as retainership fee, he is not obliged to pay Prof Briggs any other fees for the work he has just given to Prof Briggs.

Answer the following questions, based on the above scenario:

1. Highlight in the appropriate order, all the stages or steps involved, from the beginning to the end, for the purpose of effecting the transaction involving the property in Benin City.

2. Assuming that at the conclusion of initial negotiations over the transaction involving the property in Benin, the parties agreed to reduce to writing the essence of their negotiations pending completion of investigation and completion of the transaction. Mention the formal legal document the parties would execute to achieve this. Describe the legal status of the document you have mentioned, and identify the person that is responsible for drafting it.

3. List out the particulars of instruction the legal practitioner engaged to draft the document you identified in answer to question 2 above would need to take from the parties for the purpose of drafting the document. Draft the document, in its professional standard form.

4. With support of relevant legal authorities, comment briefly on the need for perfection in respect of the transaction at this stage?  Discuss also the usefulness or advantages (if any) of the document you have drafted in answer to question 3 above.

5. Advise the parties (involving the property in Benin) on when exchange of contract may be necessary in a transaction of this nature. Identify the legal effects or consequences (if any) of the exchange of contract on the legal position of the parties to the transaction.

6. Of what use is each of the following clauses in a formal contract of sale of land?

            a)         Payment of Deposit

            b)         Balance and interest on unpaid purchase sum;

            c)         Capacity of the vendor;

            d)         Provision on Risk and insurance        

            e)         Provision on Possession before completion

            f)          Provision on Date of Completion.

7. Comment briefly on the need for pre-contract inquiries in sale of land (Conveyancing) transactions.

8. In what specific ways is each of the following cases relevant to conveyancing procedure in Nigeria? Your discussion must commence with the facts of each case.

1. Odusoga v Ricketts [1997] 7 NWLR (pt.511) 7;
2. Kachalla v Banki (2006) ALL FWLR (Pt.309) 1420

9. Assuming Mr. Enefaa Chamberlain agreed to sell one plot of land he owns in his village (Otuoke, Bayelsa State) to one of the traditional High Chiefs in the village (High Chief Samabo Tellema) in consideration of two he-goats, 30-litres gallon of local palm wine and four kola nuts. High Chief Samabo Tellema in keeping with the agreement procured all the items and the sale transaction/ceremony took place at the palace of the traditional ruler, in the presence of five other High Chiefs and several village-men. On December 05, 2016 (about four months after the conclusion of the sale transaction), Mr. Chamberlain`s son who was called to Bar in November 2016 returned to the village and advised his father that such transaction has no place in law, because the parties failed to comply with relevant laws, especially as there was/is no written documentation of the transaction as required by law. He has advised his father (Mr. Chamberlain) to send a letter to High Chief Tellema, to announce his (Mr. Chamberlain`s) withdrawal from such “illegal deal.” Meanwhile, the purchaser had by that time commenced development of the property. With the aid of relevant judicial and statutory authorities, discuss all the legal issues arising and advise the parties on their respective rights and obligations.

10. Assuming that in respect of the transaction involving the property in Enugu, the parties did not execute any formal legal document, but after the initial negotiations, and in line with their understanding with each other, the proposed buyer paid a sum of N160 million as PART-PAYMENT to Mr Chamberlain, to pay the balance on 30 November 2016. Mr. Chamberlain then handed over to the buyer a written memo in the following form:

“It is hereby confirmed that today, February 19, 2016, I Mr. Enefaa Chamberlain of 45, Teller Road, Onitsha, Anambra State, received N160 million from Mr. Terry Bam (representing Dango Venutres of 64, Ogu Lane, Enugu), as PART-PAYMENT for the purchase of the block of six flats at 44, Apple Avenue, Enugu, Enugu State, covered by Certificate of Occupancy No 87345 dated 15/07/2014 and registered as 45/45/2013G in the Lands Registry.

Balance of N50 million to be paid on or before 30/11/2016.

Signed: …………………………

Mr. Enefaa Chamberlain”

However, on May 30, 2016, Mr. Chamberlain was offered N320 million by Afro-Pro Bank Limited of 56, Anayo Street, Port Harcourt for purchase of the same property. Mr. Chamberlain accepted the later offer and collected the sum of N320 million at once. The parties immediately thereafter executed a Deed of Assignment for this purpose. The Bank perfected its title to the transaction with five months. Meanwhile, Mr. Chamberlain had sent a letter to Mr. Terry Bam informing him of the later development (ie, that he had sold the property to another person) and attaching a draft in the sum of N160 million as refund for the money he had received from Terry Bam. Mr. Terry Bam is enraged, and has consulted you as his Solicitor, for advice and to take necessary legal actions in the circumstances. Answer the following questions, citing and discussing relevant legal authorities:

i)                    Advise all the parties and propose a solution based statutory provisions.

ii)                  Assuming that Mr. Terry Bam had failed to pay the balance of N50 million on or before 30/11/2016, as agreed, and also that the sale by Mr. Chamberlain to Afro-Pro Bank Limited had not taken place until 08/12/2016, what difference (if any) would it make to the legal opinion you have offered in answer to question 10 (i) above?

    INSTRUCTIONS:

1.                   All groups to consider ALL questions in groups.

2.                   Answers to group questions MUST be submitted online (as an attachment) to plp@lawschoollagos.org, not later than 9pm on Tuesday, December 13, 2016.

3.                   Hard copy to be submitted to any of the lecturers in the department not later than 9am on Wednesday, December 14, 2016.

4.                   Each student MUST study the topic (SALE OF LAND/ CONVEYANCING PRACTICE IN NIGERIA) in advance, and get ready for presentations in class and to answer questions on the topic as well as on the above tasks.

5.                  GROUP PRESENTATION IN CLASS:

a)      Groups 01 and 10 are to get ready for a PowerPoint presentation before the entire class of the solutions to Questions 09 and 10 respectively;

b)      Each group is expected to appoint group representatives (four each for each group) for this purpose; and

c)       Each presentation is strictly on PowerPoint, as is done by Lecturers during lectures.

6.                   Some relevant reading materials:

a)      Real Property Law & Practice In Nigeria (published in 2014 (by Felicia O. Eimunjeze);

b)      Understanding Legal Drafting & Conveyancing) (2012 edition, by Sylvester Imhanobe);

c)       Property Law Practice In Nigeria (3^rd edition 2105 by Y.Y Dadem);

d)      Source Book On Property Law Practice (by Ada Odor & F.J. Oniekoro ).