C3347/UNIT5/1

UNIT 5

LAND DEALINGS

OBJECTIVES

General Objective To understand the concepts of land dealings under the National Land Code 1965 Specific Objectives !t the end of the unit "ou #ill $e a$le to% state the &eaning of land dealings list the t"pes of dealings under the NLC state the &eaning of Transfers' Leases and Tenacies define the i&portance of land registrations and dealing in land list the dealing instru&ents that re(uire registration under the NLC state the &eaning of Charges and Liens state the &eaning of )ase&ent state the &eaning of ca*eat and its t"pes state the &eaning of prohi$itor" order and its effect

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INPUT

The term dealing is defined in section 5 NLC to mean any transaction with respect to alienated land effected under the powers conferred under Division IV of the NLC It includes any similar transaction effected under any previous land law It does not include any caveat or prohi!itory order" which are actually restraints on dealings

Under ,i*ision I- of the Code' onl" four t"pes of dealings are recogni.ed and these are% a/ $/ c/ d/ 5. Transfers0 Leases and tenancies0 Charges and liens0 and )ase&ents T!E I"#O$TANCE O% $EGIST$ATION IN LAND DEALINGS.

!ll dealings ha*e to $e registered and no instru&ent effecting an" such dealing shall operate to transfer the title to an" alienated land until it has $een registered 1o#e*er' e*en $efore registration is $eing effected the dealing is still effecti*e since the parties are $ound $" contractual o$ligations According to section 304 of the NLC, the registration of any instrument of dealing is effected by the Registrar making, under his hand and seal, a memorial of the dealing on the register document of title, under his hand and seal, on the instrument of dealing itself. The memorial consists of a short descri tion of the nature and effect of the instrument, the identity of the arties thereto, and a statement of its number in the !"resentation #ook$, the reference under %hich it is filed, and the time and date from %hich the registration is effecti&e. 213 4alleh'1959/

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The effect to registration is that the la# confers on the transferee' leasee or chargee or the person or $od" in #hose fa*our an ease&ent has $een granted and registered' as the case &a" $e' the seal indefeasi$ilit" 64ee section 34721/ NLC 5.& T$ANS%E$S

8hat &a" $e transferred9 !ccording to section +14 NLC' the follo#ing are capa$le of $eing transferred under the Code na&el"' a/ the #hole' $ut not part onl"' of an" alienated land $/ the #hole' $ut not part onl"' of an" undi*ided share in an" alienated land c/ an" lease of alienated d/ an" charge and e/ an" tenanc" e:e&pt fro& registration 5.&. #'(ers 'f Transfer an) its $estricti'ns

The po#er to transfer is su$3ect to li&itations and prohi$itions #hether i&posed $" the National Land Code or an" other #ritten la# for the ti&e $eing in force It is also li&ited $" an" restriction in interest to #hich the land is for the ti&e $eing su$3ect and in relation to leases' charges and tenancies e:e&pt fro& registration' the pro*isions thereof' e:press or i&plied Note% No lease or charge &a" $e transferred to t#o or &ore persons or $odies other#ise than as trustees or representati*es Transfer of land &ust $e effected $" ;or& 14! and the title passes and *est in the purchaser upon the registration of the transfer The purchaser also gets the $enefits of an" registered interest then en3o"ed #ith the land

5.* LEASES AND TENANCIES ! lease is defined as a con*e"ance $" #hich the proprietor of land 2lessor/ grants to another person 2lessee/ an interest in the land less than a freehold and less than that to #hich the lessor is hi&self entitled The NLC pro*ides for t#o distinct t"pes of leases and the" are a ter& not e:ceeding three "ears and for a ter& e:ceeding three "ears The first t"pe is referred to as a tenanc" e:e&pt fro& registration and it is not a registera$le interest If all leases #ere registera$le the title to the land #ould *er" (uic<l" $e filled up #ith a great deal of short tenancies

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8ith regard to leases for ter& e:ceeding three "ears' the" &a" $e granted either o*er the #hole or o*er part onl" of the land Leases for a part of the land &a" $e granted for a &a:i&u& of thirt" "ears If the proprietor = lessor is holding the land under a 4tate lease he &a" not grant a lease to another person for longer than is tenanc" has still to run Leases for a part of the land &ust include a plan and description of the land so that the portion &a" $e accuratel" identified

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Activit+ 5a

TEST ,O-$ -NDE$STANDING >);?@) A?U C?NTINU) 8IT1 T1) N)BT INCUTDE %ill in t.e blan/s (it. t.e c'rrect ans(er. # The NLC pro*ides four &ain t"pes of dealing These are transfers0 leases and tenanc"0 charges and lien0 and + The NLC does not re(uire the granting of tenanc" for a period not e:ceeding "ears to $e registered in the land titles 3 4 ! for& to $e used for transfer of land' share or lease is !s pro*ided in section +752+/ of the NLC' person / $odies in #hose fa*our dealings are capa$le of $eing effected are those listed in section FFFFFFFFFFFF of the NLC 5 4ec +1423/ of the NLC prohi$its the transfer of lease or a charge to t#o or &ore person / $odies other#ise than as FFFFFFFFFFFFFFFFFF or representati*es

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%ee)bac/ t' Activit+ 5a

. &. *. 1. 5.

ease0ent t.ree %'r0 1A 1* tr2stees

I hope you are still o$ey and steady% Let&s go to another input%

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INPUT

5.1 C!A$GE$S AND LIEN The NLC recogni.es t#o t"pes of securit" dealings #ith land and the" are charges and liens ! charge is a transaction 2or a dealing for the purposes of the Code/ #here$" registered proprietor of an alienated land or a lease con*e"s it as a securit" for the repa"&ent of a loan' an annuit" or an" other periodical pa"&ent' to another The proprietor of the land or lease is <no#n as the GchargorH and the person #ho& the propert" is con*e"ed or in #hose fa*our the charge has $een effected is called the GchargeeH ! lien is not a registera$le dealing Under section +5121/ of the NLC' it can $e created in respect of an" alienated land or an" lease or su$6lease of alienated land ! lien is created #hen the proprietor of an" alienated land or the lessee or the su$lessee for the ti&e $eing of an" alienated land deposits #ith another his I,T' duplicate lease or duplicate su$lease respecti*el" as securit" for a loan The person #ith #ho& the I,T' duplicate lease or duplicate su$lease is deposited is <no#n as the lien6holder and to protect his interest he &a" appl" for the entr" of a lien6holderIs ca*eat ! lien can also $e created in respect of an undi*ided share in an" alienated land and the docu&ent that needs to $e deposited is the cop" of the I,T 5.5 EASE"ENT 4ection +5+21/ of the Code defines ease&ent si&pl" as Gan" right granted $" one proprietor to another' in capacit" as such and for the $eneficial en3o"&ent of his landH The land for the $enefit of #hich the ease&ent granted is called the Gdo&inantH land and the land of the proprietor $" #ho& the ease&ent is granted is called the Gser*ientH land @ights of ease&ent are either positi*e or negati*e in nature Thus under section +5321/' the Code e:plicit" states that the rights capa$le of $eing granted as ease&ent are% an" right to do so&ething in' o*er or upon the ser*ient land and an" right that so&ething should not $e so done 4ection +532+/ then states that the said rights do not include% % an" right to ta<e an"thing fro& the ser*ient land an" right to the e:clusi*e possession of an" part thereof

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)*er" ease&ent &ust possess the follo#ing characteristics' na&el"% there &ust $e a do&inant land and a ser*ient land 5.3 the right grants &ust $enefit or acco&&odate the do&inant land the proprietors of the do&inant land and ser*ient land &ust $e different persons and the right &ust $e capa$le of for&ing the su$3ect &atter of a grant INST$-"ENTS O% DEALING

!ccording to section +7621/ NLC pro*ides that e*er" dealing shall $e effected $" the rele*ant instru&ent prescri$ed for that purpose and &ust $e properl" registered #ith the co&petent authorit" There are fourteen t"pes of instru&ent that re(uire registration under the NLC These are as follo#s%6 a/ $/ c/ d/ e/ f/ g/ h/ i/ 3/ </ l/ &/ n/ 5.4 Transfer of land' share or lease 2;or& 14!/ Transfer of charge 2;or& 14>/ Lease of land 2;or& 15!/ 4u$6lease of land 2;or& 15>/ 4urrender of lease 2;or& 15C/ Charge = to secure pa"&ent of a principal su& 2;or& 16!/ Charge = to secure pa"&ent of a periodic su& 2;or& 16>/ Costpone&ent of a charge 2;or& 16C/ Certificate of sale $" Court 2;or& 16;/ Certificate of sale $" L! 2;or& 16I/ ,ischarge of charge 2;or& 16N/ Jrant of ease&ent 2;or& 17!/ Jrant of cross6ease&ent = in respect of a part"6#all 2;or& 17>/ @elease of ease&ent 2;or& 17C/

CAVEAT AND #$O!IBITO$, O$DE$

! ca*eat is an entr" in the @,T to an" land &ade $" @T / L! on his initiati*e 2in the case of a @egistrarIs ca*eat/ or upon recei*ing an application for itIs entr" fro& a certain person or $od" 2in the case of an" other ca*eat/ It has the effect of pre*enting certain instru&ent of dealing fro& $eing registered $" the @T / L! The purpose of a ca*eat depends on its t"pe The NLC pro*ides four t"pes of ca*eats These are the @egistrarIs ca*eat' pri*ate ca*eat' lien6holderIs ca*eat and the trust ca*eat

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5.4.

$e5istrar6s Caveat

! @egistrarIs ca*eat is entered $" the @egistrar on the registrar docu&ent of title 2@,T/ 4o long as the ca*eat is in force no dealing &a" $e effected in regard to that piece of land )*en dealings pending registration are fro.en ! @egistrarIs ca*eat also ta<es precedence o*er all other ca*eats >asicall"' the @egistrarIs ca*eats ser*e four &ain functions To pre*ent fraud or i&proper dealings To protect the interests of the ;ederation or the 4tate authorit" or an" person #ho is under disa$ilit"' e g &inorit"' &ental disorder' or unsoundness of &ind or an" person #ho is a$sent fro& the ;ederation To secure that land #ill $e a*aila$le to satisf" the #hole or an" part of an" de$t due to the ;ederation or the 4tate !uthorit"' #hether such de$t is secured or unsecured and #hether or not 3udge&ent thereon has $een o$tained To correct errors #hich appear to the registrar to ha*e $een &ade in the register or issue docu&ent of title to the land or an" other instru&ent relating thereto !ccording to section 31921/2$/ of the NLC the @egistrarIs ca*eat prohi$its the follo#ings%6 @egistration of an" instru&ent of dealing )ndorse&ent of an" clai& to the $enefit of tenanc" e:e&pt fro& registration )ntr" of an" lien6holderIs ca*eat 1o#e*er' under section 31923/ of the NLC the @egistrar &a" #ai*e the prohi$ition #here he is satisfied that such an action #ould not $e inconsistent #ith the purpose of the ca*eat 5.4.& #rivate Caveat

! pri*ate ca*eat &a" $e entered either to $ind the land itself or &erel" an interest therein The persons and $odies #ho &a" enter pri*ate ca*eat are%6

!n" person or $od" clai&ing title to' or an" registera$le interest in an" alienated land or an" right to such title or interest !n" person or $od" clai&ing to $e $eneficiall" entitled under an" trust effecting and such land or interest The guardian or ne:t6of <in of an" &inor clai&ing to $e entitled

!ccording to section 3++2+/ of the NLC a pri*ate ca*eat #hich is e:pressed to $ind the land itself prohi$its the follo#ing%6 @egistration of an" instru&ent of dealing e:ecuted $" or on $ehalf of the proprietor @egistration of an" certificate of sale

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)ndorse&ent of an" clai& to the $enefit of tenanc" e:e&pted fro& registration granted $" the proprietor )ntr" of lien6holderIs ca*eat in respect of the land 5.4.* Lien7 !'l)er6s Caveat 4ection +51 of the NLC pro*ides that an" proprietor of land or an" lessee for the ti&e $eing &a" deposit #ith an" other person or $od"' as securit" for a loan' his issue docu&ent of title of duplicate lease Upon such deposit $eing &ade' the depositee &a" thereupon appl" to the @egistrar for the entr" of a lienIs holder ca*eat in respect of the land or lease Upon entr" of such ca*eat' the depositee $eco&es entitled to a lien o*er the land or lease 8here the lien6holder has o$tained 3udge&ent against the land o#ner or the lessee for the a&ount due to hi& as secured $" the lien' he shall $e entitled to appl" to the court for an order for the sale of the land or lease !ccording to section 33725/ of the NLC' the effects of lien6holderIs ca*eat are the sa&e as those of the pri*ate ca*eat Therefore if the lien6holderIs ca*eat e:pressed to $ind the land itself' it prohi$its the follo#ings%6 @egistration of an" instru&ent of dealing e:ecuted $" or on $ehalf of the proprietor @egistration of an" certificate of sale )ndorse&ent of an" clai& to the $enefit of tenanc" e:e&pted fro& registration granted $" the proprietor )ntr" of an" lien6holderIs ca*eat in respect of the land 5.4.1 Tr2st Caveat ! trust ca*eat &a" $e entered $" the @egistrar in respect of an" land or interest #hich is e:pressed to $e held $" an" persons or $odies as trustees The effect of the trust ca*eat shall $e precisel" stated therein and &a" $e to prohi$it' either a$solutel" or e:cept su$3ect to conditions' the registration' endorse&ent or entr" of all or an" of the follo#ings%6 an" instru&ent of dealing' or class or description of instru&ent of dealing' directl" affecting the trust propert" an" lien6holder ca*eat in respect of the land 5.4.5 #r'.ibit'r+ Or)er !ccording to section 334 of the NLC' Kprohi$itor" orderI &eans' #here land or interest in land held $" a 3udge&ent6de$tor is to $e sold in e:ecution proceedings' an order &ade pursuant to the rules of court $" a court of co&petent 3urisdiction prohi$iting the 3udge&ent6de$tor fro& effecting an" dealing there#ith or fro& effecting such dealing there#ith as &a" $e specified in the order

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'nce the (egistrar has entered a caveat he must serve notice of it on the proprietor of the land The caveat is effective until it is cancelled !y the (egistrar of his own motion or on an application in !ehalf of the proprietor of the land affected) on pursuant to an order of court made on an application !y the proprietor *hen the caveat has !een cancelled the proprietor must !e notified

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Activit+ 5b

TEST ,O-$ -NDE$STANDING >);?@) A?U C?NTINU) 8IT1 T1) N)BT INCUTDE %ill in t.e blan/ (it. c'rrect ans(er 1 The NLC recogni.es t#o t"pes of securit" dealings #ith land and the" are FFFFFFFFFFFFand FFFFFFFFFFFFFF The NLC pro*ides four t"pes of ca*eats These are the @egistrarIs ca*eat' FFFFFFFFFFFFFFF' lien6holderIs ca*eat and the FFFFFFFFFFFFFFFFFF The land for the $enefit of #hich the ease&ent granted is called the GFFFFFFFFFFFFFFFH land and the land of the proprietor $" #ho& the ease&ent is granted is called the GFFFFFFFFFFFFFH land ?ne of &ain @egistrarIs FFFFFFFFFFFFdealings ca*eat function is to pre*ent fraud or

!ccording to section 33725/ of the NLC' the effects of lien6holderIs ca*eat are the sa&e as those of the FFFFFFFFFFFFca*eat

Try you !est to get all the answers correct% +''D L,C-..

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%ee)bac/ t' Activit+ 5b

1 + 3 4 5

charges' lien pri*ate ca*eat' trust ca*eat do&inant' ser*ient i&proper pri*ate

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KEY FACTS 1 + 3 The pro*isions in the NLC re(uire certain dealings in land or interest in land to $e registered This is to ensure that dealings can $e done efficientl"' cheapl"' and #ith certaint" The issue of land dealings co*ers the aspects of transfer of land' leases and tenancies' charges and liens and ease&ents The purpose of ca*eats and prohi$itor" order is to pre*ent land dealings to $e carried out #ithout prior <no#ledge $eing infor&ed to the ca*eator or the Court 2as in the case of prohi$itor" order/

Congratulations !!! you have finished with all the inputs and activities. Now move on to the self-assessment!!! Lets have a look at it now!!!

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Self7Assess0ent 5

Aou are approaching success Tr+ all t.e 82esti'ns in this self6assess&ent section and chec< "our ans#ers #ith those gi*en in the ;eed$ac< on 4elf6!ssess&ent gi*en on the ne:t page If "ou face an" pro$le&s' discuss it #ith "our lecturer Jood luc<E 1 + 3 4tate the functions of the @egistrarIs ca*eat ,efine the i&portance of land registrations and dealing in land 4tate the &eaning of these follo#ing ter&%6 i Charges ii )ase&ent iii leases

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%ee)bac/ T' Self7Assess0ent 5

1a*e "ou tried the (uestions99999 If GA)4H' chec< "our ans#ers no# 1 >asicall"' the @egistrarIs ca*eats ser*e four &ain functions To pre*ent fraud or i&proper dealings To protect the interests of the ;ederation or the 4tate authorit"' or an" person #ho is under disa$ilit"' e g &inorit"' &ental disorder' or unsoundness of &ind' or an" person #ho is a$sent fro& the ;ederation To secure that land #ill $e a*aila$le to satisf" the #hole or an" part of an" de$t due to the ;ederation or the 4tate !uthorit"' #hether such de$t is secured or unsecured and #hether or not 3udge&ent thereon has $een o$tained To correct errors #hich appear to the registrar to ha*e $een &ade in the register or issue docu&ent of title to the land or an" other instru&ent relating thereto

The pro*isions in the NLC re(uire certain dealings in land or interest in land to $e registered This is to ensure that dealings can $e done 82ic/l+' c.eapl+' and #ith certaint+ for good de*elop&ent of the land i/ ! charge is a transaction 2or a dealing for the purposes of the Code/ #here$" registered proprietor of an alienated land or a lease con*e"s it as a securit" for the repa"&ent of a loan' an annuit" or an" other periodical pa"&ent to another The proprietor of the land or lease is <no#n as the GchargorH and the person #ho& the propert" is con*e"ed or in #hose fa*our the charge has $een effected is called the GchargeeH ii/ 4ection +5+21/ of the Code defines ease&ent si&pl" as Gan" righgranted $" one proprietor to another' in capacit" as such and for the $eneficial en3o"&ent of his landH The land for the $enefit of #hich the ease&ent granted is called the Gdo&inantH land and the land of the proprietor $" #ho& the ease&ent is granted is called the Gser*ientH land iii/ ! lease is defined as a con*e"ance $" #hich the proprietor of land 2lessor/ grants to another person 2lessee/ an interest in the land less than a freehold and less than that to #hich the lessor is hi&self entitled