Own a piece of land in Nigeria? Thinking of buying or selling?
Then understanding the transfer of real estate ownership agreement is key!
The transfer of real estate ownership agreement is an important legal document that transfers the legal rights of land and buildings from one person to another.
The person transferring the property is known as the seller, while the receiver is known as the buyer.
But before the keys change hands, there’s more to discuss than just price.
Let’s dive in and explore everything this agreement entails, with a helpful sample included at the end!
What is a Transfer of Ownership Agreement?
A transfer of ownership agreement, also known as a bill of sale or deed of sale, is a legal contract that formalizes the transfer of ownership of an asset from a seller (transferor) to a buyer (transferee).
This document serves as concrete evidence of the sale, outlining details like the transferred asset, purchase price, and agreed-upon terms. It’s vital for protecting both parties involved in the transaction.
The transfer of ownership agreement includes the price, the closing date (when ownership changes hands), how the buyer will pay (financing), getting the property inspected, any “what-ifs” (contingencies), and how the ownership will be transferred (deed).
Methods Involved in the Transfer of Ownership Agreement
There are several methods by which property can be transferred from one person to another. These methods include:
- By sale
- By mortgage
- By gift
- By probate
By Sale
With this method, property ownership rights and interests are transferred from one party to another. In most cases, this entails selling the property for a fee.
By Mortgage
A mortgage on your house can make transferring equity difficult. In reality, the process is quite straightforward with just a few extra steps.
You will usually receive assistance throughout the process from a conveyancing solicitor.
By Gift
This method is a voluntary transfer of property from one party (The Donor) to another (The Donee) without consideration.
By using this document, the donor transfers the legal ownership of their property to the donee by the way of gift.
For safety reasons, it is advised that anyone receiving a gift make sure he/she has some sort of proof that the land was given to them because the donor may die or regret giving it out and wish to rescind it.
By Probate
Using this method, the assets of the deceased person are gathered, debts paid, taxes paid, and the remaining assets are distributed to their heirs.
In most cases, there is a very little court supervision unless there is a dispute between family members of creditors. Probate is mostly a paper process.
In addition, if a person dies intestate, which means without a will, their property will be distributed according to law when they die.
A letter of administration will be issued to the personal representatives of the deceased by the probate court in respect of the assets of the transfer.
Documents Involved in Transfer of Ownership Agreement
When property ownership is transferred between people, there are some important documents that need to be transferred as well.
These documents provide proof of property ownership to the new property owner.
The most important documents needed in the transfer of property ownership in Nigeria include:
- Deed of Assignment
- Land Purchase Receipt
- Contract of Sale of Land
- Survey Plan
- Deed of Gift
- Grant of Probate
- Deed of Mortgage
- Certificate of Occupancy
1. Deed of Assignment
Real estate is legally transferred through the use of a deed.
A Deed of Assignment is an instrument of transfer which is used in real estate transactions to transfer legal title or the ownership interest in a land or building from the title holder (called the assignor) to another called the assignee, usually for a consideration (money or money’s worth).
In a deed, the parties transferring and acquiring interests are identified, and the property is described legally.
In addition, the document identifies what type of ownership interest is being transferred.
2. Land Purchase Receipt
The land purchase receipt is a document that reflects the receipt of payment for a particular house or land.
A receipt is usually issued to the buyer by the seller upon sale of a property.
Land transfers may, however, contain a clause exempting the receipt.
3. Contract of Sale of land
Parties use the contract of sale of land to agree on some terms before the transaction is finalized.
It must be followed by a different document transferring title to the relevant property because it is not a registrable instrument.
4. Survey Plan
The location and dimensions of landed property are shown on a survey plan.
It is simpler to check or search from the office of the Surveyor-General whether the land is actually under any government acquisition or not thanks to the descriptions and coordinates on the survey document.
5. Deed of Gift
It is proof that real estate has been given as a gift from one person (the Donor) to another (the Donee) through the use of a document.
Permanent interest in a landed property may be transferred through a deed of gift.
6. Grant of Probate
A grant of probate is a document obtained after establishing the validity of a decedent’s will in the probate registry through inheritance by will.
The will vests in the executors of the estate all of the assets, making them the legally recognized owners of the property.
7. Deed of Mortgage
A deed of mortgage is actually used in mortgage transactions to demonstrate that ownership of real estate has been transferred from the mortgagor (borrower) to the mortgagee (lender).
It is a temporary transfer in the sense that the mortgagor will have the right to reclaim the property from the lender after the principal balance of the loan and all accrued interest have been paid.
8. Certificate of Occupancy
A C of O is usually issued by the state government, indicating that a person owns a parcel of land or property.
It is given to people who have owned property since 1979. The recipients of government-owned land parcels receive them as well from state governments.
Instead of a new certificate of occupancy, an individual who later purchases land through a sale needs only a deed of assignment with the governor’s approval.
Other documents include:
1. Power of Attorney
This document may be necessary in some situations, such as when a party to a real estate transaction is located outside of Nigeria or is ill for some other reason.
A party to the transaction may delegate this document’s authority to another person to act on their behalf.
A person who plans to purchase land outside of Nigeria and likely manages it can give a power of attorney to an agent to assist him in carrying out specific duties related to the property.
2. Letter of Administration
The administrators of a specific estate are also given ownership of the assets listed in the letter of administration.
When a person dies intestate, it is given to the personal representatives of the deceased.
3. Assent
The administrators of an estate give their permission for a beneficiary or third party buyer to receive an interest in a specific estate.
4. Judgement of court
Another significant document that can be used to transfer ownership of a specific piece of property is a judgement of court.
It is useful when the title of a particular property is derived through a lawsuit.
Transfer of Agreement Sample
Final Thoughts
Congrats! With all the legal steps squared away, you’re on your way to finalizing that real estate transfer.
Remember, this guide provides a helpful roadmap, but consulting a lawyer is always recommended for a smooth and secure transaction.
Now go celebrate your new property (or successful sale)!
