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11 Jan

LAND LAW 1.8 THE RIGHT OF OCCUPANCY

ALIENATION OF RIGHT OF OCCUPANCY.

Section 21 and 22 LUA prohibit alienation of customary or statutory right of occupancy (respectively) without the requisite consent of the governor.

:: Note however that such consent shall not be required where:

  • A prior equitable mortgage of the land had been created with the consent of the governor.
  • In a re-conveyance or release of mortgage which mortgage was created with the consent the governor[1].

Failure to validly obtain the Governor’s consent… what happens?

In Savannah Bank V Ajiloh, the mortgagor mortgaged his land acquired before the Land Use Act to secure a loan. Where he failed to repay, the mortgagee sought to exercise the right of foreclosure over the property. The mortgagor alleged that he had not obtained the governor’s consent as required by Section 21 and 22. The counsel however argued that the Land Use Act provision relating to governor’s consent does not apply to deemed grantees under Section 34. The court held that failure to obtain governor’s consent rendered the mortgage void. The conclusion of the court in this case has been criticised for enabling a party benefit from his wrong. As in this case, the mortgagor was able to escape the liability of repaying the mortgage loan because he did not obtain governor’s consent.

In the later case of National Bank of Nigeria V Adedeji, the court applied the volenti non fit injuria and ex trupi causa non oritur actio doctrines to similar facts holding that a party cannot be allowed to rely on his own illegality to use a statute as an engine for fraud especially where consideration has passed. This position was followed in the case of Ugochukwu V Co-operative and Commerce Bank. In essence, the NBN and Ugochukwu case have the effect of allowing the alienation on justifiable and equitable grounds notwithstanding that the consent of the governor had not been obtained.

A radical departure was however made by the Supreme Court in the case of Union Bank Plc and Another V Ayodare and sons Ltd. In this case, the mortgagor secured a loan facility from the mortgagee and executed deeds of Legal mortgage in respect of his two properties at Lokoja and Kabba. When he failed to repay the loan and the mortgagee sought to foreclose, he alleged that the governor’s consents obtained by him were invalid. As the persons who gave consent for the alienation of his property were not the appropriate persons to give such consents. The trial and Court of Appeal rejected this argument. The Supreme Court, (reversing the lower decisions) held that the transactions were void as the rule delegatus non potest delegare applied. What happened in this case was that there was an application for the governor’s consent. This power to grant was delegated to the Commissioner of Land and the commissioner of lands delegated this power to another who signed on his behalf. The court held that this amounted to a violation of the rule; delegatus non potest delegare. Thus the consent was invalid.

The Ayodare’s case seems to have taken us back to the strict position in Ajiloh’s case[2]. Although both cases are distinguishable in that; In the Ajiloh’s case, there was no consent at all while in the Ayodare’s case, although there was consent, it was invalidated for running contrary to the rule against sub-delegation. This distinction is merely an academic exercise. The long and short of the story is that: the governor’s consent must be validly sought and obtained before alienation of land.

In practice, Mortgage institutions and buyers usually obtain the consent by themselves and the mortgagor/vendor bears the liability for expenses incurred in obtaining the consent.

There is no need for consent where the parties merely enter into an agreement to alienate (assign, sublet, mortgage or licence)-Awojugbagbe Light Industries V Chinukwe. However, the consent would be required where there is actual alienation- Solanke V Abed.

:: Note also that consent is discretionary. The governor cannot be mandated to give his consent… it is at his discretion.

Alienation without consent makes the transfer ineffectual. Punishment may be levied where the alienation violates the provisions of the LUA like the half-hectare rule discussed above. Also all lands situate in non-urban areas shall not be fragmented and transferred-section 36(5). Imprisonment of one year or fine of 5000. Any alienation contrary to the provisions of the Act may be a ground for revoking the Right of occupancy for overriding public interest-Section 28(2 and 3).

Finally, note that the requirement of consent under Section 21 and 22 applies to both actual and deemed grantees.

 

DEVOLUTION OF RIGHT OF OCCUPANCY ON DEATH.

By Section 24:

  • Customary right of occupancy: the customary law of the place where the land is situate shall determine.
  • Statutory: the customary law of the deceased at the time of his death. Unless non-customary law or other customary law has been made applicable.

REVOCATION OF RIGHT OF OCCUPANCY

How can the right of occupancy be taken/annulled/invalidated…?

Grounds for revocation:

  1. OVERRIDING PUBLIC INTEREST-Section 28(2):

:: In the case of a statutory right of occupancy

  • Where there is unlawful alienation.
  • Acquisition by state, local or federal government for public purpose.
  • Requirement of land for mining purposes or purposes connected therewith[3].

:: In the case of customary right of occupancy the requirement of land for the extraction of building materials is added to the list. (above listed).

Public purpose includes:[4]

  • For government or general use.
  • For use by a body corporate in which the government owns shares debentures or other interest.
  • For or in connection with:
    • Sanitary improvements.
    • Construction of public works like roads, railway and the likes.
    • Telecommunication or provision of electricity.
    • Mining purposes.
    • Planned rural or urban settlement. (get cases for all the above listed).
    • Educational or other social services.

In Ereku V Military Governor of Midwestern State, the court held that the purpose (for which the Right of Occupancy is granted) must be truly “public”. In Osho V Foreign Finance Corporation, the right of occupancy was revoked and granted to another for private business. The court declared the revocation as invalid.

Granting the land to a private company would not make the revocation invalid if the company is using the land for public purpose-Lawson V Ajibulu, in this case, the Ogun State government acquired an area of land which included the plaintiff’s land. The notice did not disclose the purpose for revocation. Later a lease of the land was granted to a private company for public purpose. The revocation was held to be VALID. As the private company was a mere agent of the government and was carrying out public purpose.

Where the new leasee is not fulfilling the purpose for which the lease was granted, the grant can be revoked-Osho V Foreign Finance Corporation.

  1. Public purpose by the Federal government: The FG would tell the governor to revoke a right of occupancy where it wishes to use it for some public purpose. The governor should obey the directive of the Federal Government-AG Lagos V NEPA.
  2. Breach of terms and conditions: Breach of the provisions implied by Section 10 LUA, (refusal to accept and pay for a Certificate of Occupancy) and those expressly provided for in the Act and certificate. Section 28. Alienation without consent-section 21 and 22…

PROCEDURE FOR VALID REVOCATION.

By the interpretation of Section 7 and 28 of the LUAct, The following should be noted:

  1. Only a duly authorised person can revoke: the governor or a public officer so authorised by the governor.
  2. Notice of revocation must be made and served to the holder. The notice should state the reason/particular purpose for revocation. The notice can be served on the holder in person or at his last known place of abode. For companies, the notice can be served on the secretary or clerk of the company. Where the name and address of the holder cannot be traced and there is no one within his premises, a copy of it shall be affixed to a conspicuous part of the property.
  3. There must be receipt of such notice: as title can be extinguished upon receipt of notice or on a later date. The aggrieved should however be accorded fair hearing-Section 36 of the 1999 Constitution.

Note however that revocation does not extinguish any debt due to the government under such right of occupancy. Meaning that the person whose Right of Occupancy has been revoked can still be liable to pay debts due to the government.

RIGHT TO COMPENSATION

By virtue of Section 44 of the 1999 constitution and Section 29 of the Land Use Act, compensation should be paid where a person’s right of occupancy has been revoked. Where the revocation is penal[5], there is no need to pay compensation.

Just note the following points in relation to compensation:

  • The Act provides that the “holder” or “occupier” shall be entitled to compensation.
  • Compensation is for unexhausted improvements on the land: Unexhausted improvement means any attachment to land resulting from expenditure of capital or labour like buildings, fence, and so on- see Section 51?
  • The amount to be paid is the estimate value of improvements on the land at the date of revocation.
  • It follows that compensation is not payable in respect of a vacant land which has no improvement.

 

REFERENCES

PROFESSOR I.O.SMITH LAW OF REAL PROPERTY IN NIGERIA.

B .O.NWABUEZE, 1972, Nigerian Land Law, Nwamife Publishers Limited Enugu.

Omotola, 1984, Essays on the Land Use Act , Lagos University Press

Olawoye ,1970, Meaning of family property,NJCL vol 2 p300

Oluyede, 1989,Modern Nigerian Law, Evans Bros,(Nigerian publication)Ltd.

 

[1] As in, where a mortgage was created over the land with the consent of the governor, the consent of the governor would not be needed for its redemption and re-conveyance because it still forms part of one transaction.

[2] No consent, no valid alienation.

[3] Remember that minerals in Nigeria belong to the Federal Government. Rich lands may be acquired for mining and extraction of the natural resources

[4] Meaning that the list is not exhaustive so long as the reason is related to public purpose.

[5] i.e. it was revoked for contravention of some provisions of the Act.

Isochukwu

Quite eccentric really

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