CONDITIONAL SALE OF LAND AS SECURITY FOR A LOAN IN NIGERIA: ARE YOU ESAU?
The story of Esau and Jacob is quite a familiar story, as we are told of how Esau traded off his birth right for a delicious plate of porridge, due to starvation which he could neither bear nor contend with.
One might wonder the relevance of this story to the issue of land acquisition and transfer in Nigeria. Just like Esau in the biblical story above, a lot of land owners are constantly trading off their rights in their landed properties in exchange for loan from ‘shylock moneylenders’, upon terms and conditions that rip off the landowner of his asset.
Note quickly, that mortgage of land/property is a recognized mode of striking a deal, where one of the party undertakes to give a loan facility to another and the other contracts to put his land or property in line, with an option to redeem the property where he or she liquidates the loan. In this situation, the right to redeem is always available provided the property is still available and the mortgagee has not exercised his right over the property.
This write up is not about mortgage but a clandestine arrangement which is otherwise known as ‘conditional sale of land’ which has been lashed on, to rip owners of their property in exchange for a financial loan.
What is Conditional Sale of Land?
A conditional sale in this context is an arrangement where a land owner ‘sells’ his land or property to a lender, with an option to repurchase the land, upon payment of the money borrowed and on a certain date. For a better understanding, let us relate the experience of a client on this matter:
On January, 2014, Mr. Akata Johnson was in dire need of Money to pay the hospital bills of his child, who had been diagnosed of an ailment and is needed to be flown abroad He then approached a money lender to borrow the sum of N5,000,000,00 (Five Million Naira). The money lender demanded for his house as pledge or security for the loan. Mr. Johnson agreed and deposited his original documents with the lender. The lender wrote the agreement and tagged it ‘DEED OF CONVEYANCE’. Though Mr. Johnson queried the heading of the agreement, he was assured that if he paid back the money on or before the 30th day of November, 2015, the property would be re-conveyed to him, but where he fails the sale would become absolute.
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