PROPERTY TRANSACTION IN NIGERIA; LEASES

We shall be discussing a specific property transaction in Nigeria which does not transfer title in land from one person to the other and which is not the day to day tenancy agreement that is common. This is no other form of property transaction than lease.

A leasehold relationship exist between two or more parties where one party gives out or let his property to another to use for a period and usually, though not always, in consideration of payment of rent. This is a contract for exclusive possession and profit of land for some definite period.

The property reverts back to the owner at the expiration of the term; a consideration is usually paid by the party who want to lease the property to the owner. 

A leasehold agreement is different from rent, any agreement beyond three years is not rent but lease, there are some features that distinguish leasehold agreement from other forms of property transactions and it is only where these are present that a lease agreement is said to be valid.

There must be a demise property for exclusive use and possession, there must be a consideration it is mostly done by payment of rent but not necessarily paid by user of the property, the parties must/may enter into specific terms to relate these transaction, this is often referred to as covenants’, the relationship between both parties is for a fixed period of time and there is a right of reversion of the property to the owner.

I will advise that there must be a written agreement between both parties but that does not mean parties cannot do otherwise (parol) this will enable them set out terms agreed to by parties .it will make it   ascertainable and enforceable against the defaulting party.

Where the lease agreement is beyond three years it is required to be under seal,in such a case it must be signed, sealed and delivered. This is in line with the requirement of all conveyances in land or property transactions in Nigeria, anything that falls short of these shall be void. We help in drafting lease agreements and comply with the basic requirement of law to have a valid agreement and look out for covenants’ (a promise by the parties in which either of them pledges himself to the other that something is either done or to be done) in the best interest of our clients, consult us for these and all property transactions in Nigeria.

The law went ahead to make provision for what constitute a valid lease and there must be definite understanding in respect of the following matters.

There must be parties to the lease agreement,they must have capacity to contract the lease agreement.

A property must be involved, that is it must be properly described i.e. address, size and so on.

A valid agreement without ambiguities, word of demise, rent payable, duration and commencement and expiration date must be spelt out, a certain beginning and a certain end.

Thank you.

Oyenike Alliyu-Adebiyi LLB(hons)BL