2013 NIGERIAN LAW SCHOOL BAR FINALS QUESTIONS AND ANSWERS IN PROPERTY LAW PRACTICE
THE NIGERIAN LAW SCHOOL
BAR PART (FINAL) EXAMINATIONS
PROPERTY LAW PRACTICE
MONDAY 9TH MAY, 2013 TIME: 3 HOURS
INSTRUCTIONS
THIS PAPER IS DIVIDED INTO 2 SECTIONS AND 2 ANSWER BOOKLETS ARE PROVIDED.
QUESTIONS 1 AND 4 ARE COMPULSORY. ONE OTHER QUESTION FROM EACH SECTION SHOULD BE ATTEMPTED.
QUESTIONS FROM EACH SECTION SHOULD BE ANSWERED ON A SEPARATE ANSER BOOKLET
WRITE YOUR EXAMINATION NUMBER ON EACH ANSWER BOOKLET
QUESTION 1 (COMPULSORY)
Your services have been engaged by Chief Solomon Agama who is the holder of a statuory right of occupany in respect of a three storey building at 5, Ido Lan, Ikoyi, Lagos State. He wants to sell the house. The asking price is N20million and the prospective purchaser is Madam Atinuke Adebowale.
a. Set out in the correct order, the steps that you would take from the beginning to the end to effect the transaction.
b. Assuming you act for the purchaser, state the documents you need to collect from Chief Agama for the purpose of investigating title to the property.
c. Describe briefly the steps you would take to investigate the title to the property.
d. Complete the attached form. (DETACH FORM AT PAGE 2A AND ATTACH TO YOUR ANSWER SCRIPT)
e. Mention any five laws that will regulate the transaction.
f. Mention three taxes Madam Adebowale will need to pay in respect of the transaction.
g. Assuming that after the completion of the transaction, Madam Adebowale decides to create a term of 7 years in favour of Mallam Banwo in respect of the property.
i. What advice would you give Madam Adebowale on rent?
ii. What document will be required to complete the transaction
iii. Assuming the property is located in Enugu, draft the commencement of the document.
h. Using the scale below and assuming the consideration in the lease is N2million, calculate the Solicitors fees where he acts for both the Lessor and Lessee.
The Lessors legal practitioners scale of charges for preparing, setting and completing the lease and counterpart shall be as follows:
Amount of Rent Amount of consideration
a. Where the rent does not exceed N100 N37.50 on the rental but not less than N25 in any case
b. Where the rent exceeds N100 but does not
Exceed N1,000 N7.50 in respect of the first N100 of rent and N25 in respect of each subsequent N100 of rent or part thereof.
c. Where the rent exceeds N1,000 N37.50 in respect of the first N100 of rent and N25 in respect of each N100 of rent or part thereof up to N1,000 and then N12.50 in respect of every subsequent N100 or part thereof
Which Gambo should fulfill before he may be exempted from charging his fees under scales I & II of the Legal Practitioners (Remuneration for Legal Documentation and other Land matters) Order of 1991.
ii. Where Gambo is exempted from charging under Scales I and II of the Order, state any three items which Gambo should take into consideration while charging under Scale III of the Order.
iii. Assuming Gambo was representing Jimoh only and he failed to properly investigate Boses tittle, state briefly the advice you would give Jimoh, if he suffered any damage.
QUESTION 3
Senator Buka had lost his eat at the Senate in the just concluded 2011 Senatorial elections. To consolidate on his financial gains amassed in office, he instructed his Solicitor to prepare a Deed documenting his purchase (through his company, Rec-no Limited of No, 5 Bello road, Kano) of the unexpired residue of the term of a Certificate of Occupancy for 99 years granted on the 20th February, 1995 to one Alhaji Sanni, an illiterate businessman of No. 2 Zoo Road, Kano.
Senator Buka had also executed a lease agreement with one Alhaji Bello over one of his properties in Abuja. The lease agreement contained among others the following:
1. THIS LEASE made………, Yielding and paying thereafter the net yearly rent of N300,000.00…..
2. The lessee hereby covenants with the lessor as follows:
I. To use the demised premises for commercial purposes only
II. Not to assign, sublet or otherwise part with possession of the demised premises.
III. To pay all rates, taxes, assessments, charges and outgoing legally payable in respect of the demised premises.
Answer the following questions:
1. Draft the commencement of the Deed between Senator Buka and Alhaji Sanni
2. Draft the execution clauses of the Deed referred to in (1) above.
3. Comment on the phrases in the lease agreement, Yielding and paying….
4. Why was clause 2(i) inserted?
5. Comment on the adequacy or otherwise of clause 2(ii) from the point of view of the lessor and the lessee. Offer a re-draft to adequately protect the lessees interest.
6. What is the legal implication of clause 2 (iii).
QUESTION 3 (b)
I. Dr. Waziri wants to sell/assign his property at No. 2 Entach Close, Wuse Abuja. He is worried about how to deal with potential purchasers who come to inspect the property; what he should tell them and what he should not. He has tenants in occupation, the roof leaks a lot in very heavy rain which he does not think is worth bothering about as he is selling: Advise him on how to handle the prospective purchasers.
II. Assuming Dr. Waziri has now found a purchaser who agreed to enter into a binding contract in respect of the purchase of his property at Wuse Abuja, of what purpose would the following clauses be in the contract of sale?
a. The date of completion.
b. The payment of deposit.
c. Possession before completion.
SECTION 2
PLEASE USE ANOTHER ANSWER BOOKLET FOR THIS SECTION.
QUESTION 4 IS COMPULSORY. ONE OTHER QUESTION FROM THIS SECTION SHOULD BE ATTEMPTED.
QUESTION 4 (Compulsory)
The parcel of land know as Plot 18, Isiokwe street, Asata, Enugu, was Granted to Madam Oby Okolo by the Enugu State Government in 2005 vide a certificate of occupancy No. EN/NW/987/05 DATED 5th August 2005 under the hand of the Executive Governor, for residential purpose for 999 years. In December 2009, she sold the said plot of land to Chief Dennis Odumolu and his wife, Chief (Mrs.) Ijeoma Odumolu, all of No. 5, Egerton Street, Old GRA, Enugu for the sum of N2,000,000.00. the couple developed the land by erecting on it a two-storey building consisting of 6 shops on the ground floor and four 3-bedroom flats on the 1st and 2nd floors. Princess Amaka Ezeh through her company, Beauty World Resources Ltd. Of No. 8, Ogui Road, Enugu, wants to have an exlusive possession of one of the shops for 5 years to market her range of beauty products and the owners have agreed with her for an annual rent of N200,000.00. Meanwhile the Odumodus have entered into an agreement to sell the said land to Chief Santos Onoja for a consideration of N10 million out which a deposit of N1million has been paid by Chief Onoja on the condition that completion will be upon a successful investigation of the title and suitability of the property in question by Chief Onojas Solicitors. Chief Onoja later used the property to secure a loan of N10 million from Skye Bank Plc. It was a legal mortage, in which Onoja covenanted to repay the loan by 15th October, 2010. He was unable to repay it as agreed. He later converted the property into his palace when he became the Otaro of Igele, his home town and has refused to pay approriate tax on the property to government.
A (i) Draft the testimonium, execution and attestation clauses of the Deed of Lease in respect of the shop taken by Amaka Ezeh.
(ii) Assuming you were the Solicitor to both parties in the Lease transaction, calculate your professional fees, using the scale figures N37.50;N25 and N12.50.
(iii) What procedure would you adopt to recover your fees if after the completion of the transaction your fees remain unpaid?
QUESTION 4 (b)
(i) If you were the Solicitor to the Odumodus, in what capacity would you prefer to receive the N1 million deposit? With the aid of authorities, give reasons for your choice.
(ii) Who bears liability if the N1 million deposit is misappropriated by your office clerk who saw the money in your office the following day as he came first to clean the office?
(iii) What are the consequences, if any , where the solicitor that received the deposite appropriated loan be discharged.
QUESTION 4 (c)
(i) If Onoja had used his company, Onoja & Sons Ltd. To obtain the loan, how ould the loan be discharged?
(ii) What options are available to Skye Bank Plc, if Onoja sold the property notwithstanding that the loan remains unpaid after the date agreed for repayment?
QUESTION 5
Mrs. Amaka Johnbull has several properties in some cities of Nigeria. One of such properties is a parcel of land and known as Plot 112, Residential Layout, Enugu, which she bought from Chief Nnamdi Wachukwu in September 2008 vide a Deed of Assignment registered as No. 6 at page 6 volume 242 of the Land Registry at Enugu on 20/11/2008 in the name of her company-Popsie Ventures Ltd. Mrs. Amaka Johnbull used the said property to obtain a loan of N25 million from Zenith Bank Plc, Enugu in March 2010 with a repayment period of 6 years.
Chief Nnamdi, now deceased, was granted the said plot by the Governor of Enugu State vide a certificate of Occupancy No. EN/PL4/98 dated 12/8/98 for residential use for 99 years commencing from January 1998.
Mrs. Amaka Johnbull also owns plot 25, Kadiri Mba Avenue, Garki, Abuja on which she built 15 blocks of two sotrey buildings.
In the meantime, Mrs. Amaka Johnbulls husband, Engineer Araba Johnbull, a renowned civil engineer, who lives in Texas also owns propoerties in Nigeria and abroad, wishes to purchase two properties in Nigeria, one in Port Harcourt to build a petrol station and another in Abuja for residential purppose, as he intends to return to Nigeria to contest election to the Senate in 2015. He briefed his childhood friend, Dr. Damillola Andrea, to handle the negotiation, purchase and perfection of the titles to the properties on his behalf.
On his return to Nigeria, Enginner Araba idscovered that he needed money to refurbish the property in Abuja to suit his taste and also to complete the petrol station in Port-Harcourt. He approached Diamond Bank Plc for a loan of N60 million which the Bank advanced to him. He used the property in Abuja as security for the loan of N25 million from Diamond Bank Plc using the same property as security. The wife, Mrs. Amaka Johnbull died in February 2011 leaving behind the husband, a son, Chukwuma, and two daughters Maureen and Chioma. She made her son the sole executor through a Will she executed and dated 14/2/2009.
ANSWER THE FOLLOWING QUESTIONS:
a) Mrs. Amaka Johnbull has agreed to sell Plot 112, Presidential Layout, Enugu to Chief Kelechi Nelson and you act as his solicitor to investigate Mrs. Amaka Johnbulls title. Mention the places you would visit in the course of your investigation.
b) Draft the search report to be sent to Chief Kelechi Nelson in respect of the above property.
c) What is the implication of Chukwuma being the only executor of his late mothers Will? Would his appointment be appropriate if he is a minor?
d) Assuming the deceased died intestate, what would the husband and children do in order to legally administer the estate of the deceased?
e) Draft the document Engineer Arba Johnbull needs to execute in favour of Dr. DamilolaAndrea to enable the later Carry out the instructions of the former.
f) What are the options open to Zenith Bank Plc in creating a legal mortgage in respect of N25 million loan advanced to Mrs. Amaka Johnbull?
g) What would be your advice to Diamond Bank Plc on the step to take to secure the additional laon of N23 million granted to Engineer Araba Johnbull?
QUESTION 6 (a)
Alhaji Adebayo Sanusi Okafor bought a plot of land located at 6, Lawrence Road, Ikoyi, Lagos from the Lagos State Government in 1990 for N200,000.00, He completed a building consisting of a twin duplex on the property. He spent N800,000.00 in order to secure a buyer for the property. He renovated the property for N500,000.00. Eventually, he sold the twin duplex to Chief Yinka Obi, the Galadima of Aniocha for N5 million.
In 2007, he decided to sell the property for funds to expand his business. He placed an advert in the National Enquirer for N550,000.00 in order to secure a buyer for the property. He renovated the property for N500,000.00 Eventually, he sold the twin duplex to Chief Yinka Obi, the Galadima of Aniocha for N5 million.
Vike Idris, Esq. Is the solicitor handling the sale. Vike Idris, the vendors solicitors advised his client to pay the Capital Gains Tax. Alhaji Adebayo Sanusi Okafor not willing to pay such money into governments treasury has debriefed Vike Idris, Esq after paying him N500,000.00 for the sale transaction.
Alhaji Adebayo Sanusi Okafor has briefed and Paid kemi Risi, another solicitor to represent him in appealing against the tax assessment and has paid her N500,000.00.
(i) Compute the capital gains tax
(ii) List five taxes payable on transactions related to land.
(iii) State two ethical considerations for solicitors in respect of taxation
(iv) State the mandatory contents of a bill of charges.
(v) List the types of fees applicable to a solicitor in respect of property transaction.
(vi) State the pre-requisite to recovery of solicitors charges by an action in court.
(vii) In computing Capital Gains Tax, what is regarded as ällowable income?
QUESTION 6 (b)
(i) Assuming you are Chief Yinka Obis solicitor, where will you undertake a search in respect of this property? And why will you undertake the search there?
(ii) Assuming the property is located at No. 10, Ring Road, Oyo State, mention where you will undertrake a search in respect of the property and draft the search report: the property certificate of Occupancy is dated 12/10/70 with registration No. 14/13/70.
(iii) What is the difference between an abstract and epitome of title?
NIGERIAN LAW SCHOOL
BAR FINAL EXAMINATIONS
MAY 2013
PROPERTY LAW PRACTICE
MARKING SCHEME
SECTION 1
QUESTION 1 (a)
– Pre-contract (negotiation and preliminary investigation/PRE-CONTRACT ENQUIRIES):
– Contract stage;
– Post-contract stage(deducing of title, investigation of title and writing of search report);
– Completion (preparation, execution of deed of assignment and exchange of original title documents); and
– Perfection (post completion) —consent; stamping and registration
2 ½ marks
QUESTION 1 (b)
i. Letter of consent from vendor;
ii. copy of title document (land certificate);
iv. statutory declaration. (1 ½ Marks)
QUESTION 1 (c)
The property is within the Registration District, the solicitor will investigate Title by conducting search at Land Registry; and make physical visitation to the property (2 Marks).
QUESTION 1 (d)
Filling of form (see annexture) (3 Marks)
QUESTION 1 (e)
Laws affecting land transaction
a. Land Use Act
b. Land Instrument Registration Law
c. Legal Practitioners (Remuneration for Legal documentation and other land matters) Order, 1991.
d. Rules of Professional Conduct in the Legal Profession
e. Legal PractitionersAct
f. Stamp Duties Act
g. Capital gain Tax
h. Illiterate Protection
i. Land Use Charge Law
j. Personal Income tax Act
k. Registration of titles Law
(ANY FIVE ) (2 ½ Marks)
QUESTION 1 (f)
i) Consent fees;
ii) Stamp Duties;
iii) Land Use Charge,
iv) personal Income Tax and
v) Registration fee ( Any Three) (1 ½ Marks)
QUESTION 1 (g) (i)
Madam Adebowale should be advised on:
a. Meaning of rent: consideration for lawful occupation of the demised premises as a tenant.
b. Types of rent: Rack/Economic; Ground Rent and Premium. She should prefer Rack rent;
c. Need for Rent Review Clause — should insert rent review clause
d. Not to charge several years of rent in advance, to avoid the adverse effect of the following:
(i). Inflation
(ii) Higher taxation
(ii). Statutory prohibition (for eg in Lagos, where payment of rent in advance for more than one year is illegal, and punishable as an offence)
(5 marks)
QUESTION 1 (g) (ii)
Use RTL Form 4 for Leases under the RTL (2 Mark)
QUESTION 1 (g) (iii)
This Deed of Lease (or This Lease) made.. (1 Mark)
QUESTION 1 (h)
Calculation of the professional fees
a. For Lessor
i. Rent N100 = N37.50k
ii. Above N100 and rent for N900=900/100×25/1=N225
iii. Balance where rent exceeds N1000=1,999,000/100 x 12.50/1=N249,875.00
iv. Total for lessor = N249,875.00 +N225+37.50=N250,137.50 (2Mark)
b. For Lessee: N250,137.50/4=N62,534.38 (1 Mark)
c. Total fees: N250,137.50 +N62,534.38=N312,671.88 (1 Makr)
QUESTION 2
a. The Mortgagee has right to several to several remedies that are cumulative. The use of any of the remedies does not foreclose the use of any other. The sale of the security by the bank notwithstanding the pendency of the suit is legal though not advisable- Olori Motors Nig Ltd v UBN (1 ½ Marks)
b. (i). Letters of Administration (with Will annexed) (1 Mark)
(ii)
1. When the sole executor predeceases the testator
2. When the sole executor is absent (abroad)
3. When the sole executor/executors renounces probate
4. When the sole executor is mentally incapacitated
5. When the sole executor is a minor
6. When the grant is subject to litigation
(2 Mark)
(ANY FOUR)
c. (i) The consent of the Govenor is not required at the contract stage-International Textiles Nig Ltd v Aderemi; Awojugbagbe Light Industries Ltd v UBA (1 ½ Marks)
(ii) Power of Attorney does not ransfer interest in land to the donee and thus does not require the consent of the Governor-Abu v Kuyabana. (1 ½ Marks) thus, in both instances, failure to obtain the consent of the Governor would not affect the transactions. (1 Mark)
d. For a donee to transfer a property by deed, the instrument appointing him must be by deed. The Donee of the power of attorney, Jimoh, cannot make a transfer of the interest of the donor, to his son Negro. Abina v Farhat; Powell v London Provincial Bank Ltd (3Marks)
e. i. The fee is percentage fee. To charge outside scales 1 and 11, he must have notified the client in writing that he wishes to opt out of scales I and II. (1 Mark).
ii. Where Gambo decides to charge outside scales I and II, he should take into consideration the following things:
1. The complexity of the matter
2. The skill, labour and specialised knowledge required
3. The number and importance of documents prepared and or perused
4. The place the transaction took place
5. The amount of money involved
6. Importance attached to the matter by the client (any Three) (1 ½ Marks)
iii. A client can sue the solicitor for prfessional negligence where he fails to conduct thorough investigation. (1 Mark)
QUESTION 3 (a)
1. THIS DEED OF ASSIGNMENT (is) made ……………..(1/2 mark)
2. SIGNED, SEALED AND DELIVERED BY THE ASSIGNOR
…………………………………………ALHAJI SANNI
THE CONTENTS of this Deed having been first read and interpreted from English into Hausa language by me…………………………(sworn interpreter) and when he appeared to perfecdtly understood and approved same affixed his thumb impression.
……………………………………………….
Magistrate/judge/Notary Public
(1 ½ Marks)
THE COMMON SEAL OF the Assignee (Rec-No Ltd) was affixed to this Deed and the Deed was duly delivered in the presence of :
……………………………… ……………………………….
DIRECTOR SECRETARY
(1 ½ Marks)
3. This is the rent clause. It specifies the rent payable and the time for such payment. (1 Mark)
4. Clause 2(1) in the lease is the user clause. It specifies the purpose for which the demised premises is granted to the leessee. Without it, the lessess can use the premises for any lawful purpose Inuwa Wada v Thomas Byrne; (1 ½ Mark).
5. Clause 2(ii) in the lease is not adequately drafted. On the side of the lessor, it appears to give an absolute restriction. This will affect the consideration as it makes the property unattractive to prospective lessess. It also absolutely restricts the lessee from assigning of subletting However, it does not provide adequate restriction as the lessee can still validly assign or sublet a apart of the demised premises without being liable for breach of the covenant=Cook v Shoesmith; Ishola Williams v Hammond Projects; Ideal Film Renting v Neilsen (2 Marks).
A better draft should read:
The Lessee Covenants not to assign or sublet or in anyway part with possession of the demised premises or any part thereof without the written consent of the lessor and such consent not to be unreasonably withheld in case of a reasonable or respectable person. (2 marks).
6. Clause 2(iii) clearly specifies the party that owes the obligation to pay the rates at anytime. It does not specify any time limit. Thus, the lessee would be liable to pay only the rates and taxes in existence at the commencement of the lease-Smith v smith (1Mark)
QUESTION 3 (b)
(i) A vendor only owes duty to disclose latent defects. All defects that are visible or patent need not be disclosed by the vendor-Yandle v Sutton. Dr. Waziri need not bother about the tenants that are in the property. But he may need to disclose the leaking roof unless the leakages are clearly visible. (1mark)
(ii)
a. The date of completion determines the right of the vendor to rescind where the purchaser is unable to pay the balance of the purchase price or seek interest (usually 4 perc0 on the purchase price. Without it, a contract of sale would be concluded within a reasonable time (uncertain duration which is subject to court determination) Tilley v Thomas; Johnson v Humphrey (1 Mark).
b. Payment of deposit is an indication of commitment to the transaction by the purchaser; and the agreement of the vendor not to transfer the property to another person-Re Houyle; Thomas v Brown. Where it is provided, the purchaser may forfeit it if the contract falls through at his instance Chllingworth v Esche; Thomas v Brown (1mark)
c. Possession before completion It allows a purchaser to take possession before the completion of the transaction. A purchaser has no such right to take possession before conclusion of the transaction, in the absence of express agreement and he should be expressed as a licensee- A.P Ltd v Owodunmi (1 Mark).
FORM 7
TRANSFER
TITLE NO: ……………………………………………………..
DATE:……………………………………………………………..
In consideration of the sum of …………………………………………………………………………………………….
……………………………………………………………………..) paid by the Transferee to the transferor (the receipt of the transferor hereby acknowledges), I ………………………………………………………………….
………………………………………………………………………………….(transferor), BENEFICIAL OWNER, by this Deed transfer to ……………………………………………………………………………………………………..
………………………….(transferee) ALL THAT piece of land/property situate at …………………………..
………………………………………………………….. being the land/property comprised in the title above referred to TO HOLD the same unto the transferee for the unexpired residue subject to the Land use Act, 1978.
(include any other terms & conditions as agreed by the parties)
AND I the said Transferee hereby apply to be registered as owner of the charge land/property created.
SIGNED AND DELIVERED by the said registered transferor
……………………………………………….
(name of transferor/registered owner of land/property)
This ………………day of ……………………………20………………. IN MY PRESENCE:
Name;…………………………………………………………………………..
Sign;…………………………………………………………………………………
Address: ……………………………………………………………………………
Occupation:…………………………………………………………………………….
SIGNED AND DELIVERED by the said owner of transferee
…………………………………………….
(name of transferee)
This ………………day of ……………………………20………………. IN MY PRESENCE:
Name;…………………………………………………………………………..
Sign;…………………………………………………………………………………
Address: ……………………………………………………………………………
Occupation:…………………………………………………………………………….
SECTION 2
QUESTION 4 (a) (i)
TESTIMONIUM-
IN WITNESS OF WHICH the parties have executed this deed the day and year first above written.
OR
IN WITNESS OF WHICH the Lessors have set their hands and seals and the Lessee has caused its common seal to be affixed the day and year first above written.
(2 Marks)
EXECUTION CLAUSE
SIGNED SEALED AND DELIVERED by the
Lessors
……………………………………………………
CHIEF DENNIS ODUMODU
…………………………………………………………………………
CHIEF (MRS) IJEOMA ODUMODU
IN THE PRESENCE OF
NAME
ADDRESS
OCCUPATION
SIGNATURE
(3 MARKS)
THE COMMON SEAL OF THE LESSEE (BEAUTY WORLD RESOURCES LIMITED) WAS AFFIXED AND THE DEED WAS DULY DELIVERED IN THE PRESENCE OF
……………………………………………… ……………………………………
DIRECTOR SECRETARY
(2 MARKS)
QUESTION 4 (a)(ii)
LESSORSSOLICITORS FEES (where student calculate based on N200,000)
=N=100 =N=37.50
=N=900/100 X 25/1 =N=225.00
=199,000/100 X 122.50/1 =24,875
Total=N24,875 +225 +37.50 =N25,137.50 (2 marks)
Lessees fee N25,137.50/4 =N=6,284.38 (1 Mark)
Grand Total =N=31,421.88 (1 Mark)
OR
(Where a student calculate based on N1m rent)
N100 = N37.50
N900 =900/100 X 25/1=N225
=N=999,000/100 X 12.50/1 =N=124,875.00
TOTAL =N=124,875.00 +2255+37.50
=N=125,137.50
LESSEES SOLICITORSFEES
N125,137.50/4=N31,284.38
TOTAL FEES PAYABLE TO THE SOLICITOR = N125,137.50/4 + N31,284..38
=N= 156,421.88
QUESTION 4 (a)(iii)
To be able to recover his fees from a client, a solicitor must:
a. Prepare a dated bill of charges containing particulars of principla items, addressed to the client and signed by the solicitor or by one of the partners in the firm.
b. The bill of charges must be sent to the client at his last known address.
c. The solicitor must wait for one month after sending the bill of charges
d. Institute the action at the State High Court
OYEKANMI V NEPA; BAKARE V OKENLA; SECTION 16 (1) LPA (3 Marks)
QUESTION 4 (b)
(i) The money will be received as a stakeholder. This is to ensure that the solicitor does not bear the burden of interest-SORREL V FINCH; POTTERS V LOPPERTS (2Marks)
(ii) where the solicitor recives the money as a stakeholder, he is personally liable. Where he recives the money as an agent of the vendor, the vendor is liable to the purchaser being the solicitors principal. The vendor can however sue the solicitor for the loss. (2 Mark)
(iii) He will be guilty of professional misconduct. He is liable to be admonished, suspended, have his name struck off the roll and be compelled to refund the money. He can also be criminally liable and charged with the commission of a crime. (2 Marks)
QUESTION 4 (c)
(i) The legal mortgage can be discharged by executing and filing a deed of surrender/a deed of release. (2 Mark)
(ii) A sale of a mortgaged property by the mortagor merely transfers an equitable interest and the equity of redemption to the purchaser. Notwithstanding the sale, the mortgagee can still do any of the following;
• Sale of the mortgaged property
• Action for the principal and interest
• Action for foreclosure
• Appointment of a receiver
• Take possession
(3 Marks)
QUESTION 5 (a)
1. Lands Registry
2. Corporate Affairs Commission
3. Court Registry
4. Probate
5. Land itself
6. Inquiries from the community of family of the vendor.
ANY FOUR (2 Marks)
QUESTION 5 (b)
(we have drafted one above; see it)
SEARCH REPORT
Location of the Property; PLOT 112, PRESIDENTIAL LAYOUT, ENUGU
Particulars of Property: Deed of Assignment registered as 6/6/242, Enugu
Date of Search: 9th May, 2011
Place of Search: ENUGU
Name of Registered Owner: MRS AMAKA JOHNBULL
Nature of interest of Registered Owner: RIGHT OF OCCUPANCY FOR 99 years.
Existing encumbrances on the Property: undischarged mortgage
Observation and Comment by Solicitor: The property is encumbered because of the existing mortgage of N25m
Name and Signature. (2 Marks)
QUESTION 5 (c)
A single person can validly be an executor of a will even though in practice not less than two persons are usually appointed. The appointment of Chukwumah as sole executor of his mothers will if he is not a minor, is within legal bounds and he can duly carry out his responsibilities as an executor under the will.
There are however certain disadvantages of appointing a sole executor under a willl. First is that at the death of a sole executor who dies before a testator, the testator must appoint a new executor which is not the case where there are more than one executor in which case the others will continue. Secondly, where there are more than one executor, they all share in the responsibility of the will
If Chukwurah is a minor, he will not be granted representation until he reaches full legal age. (1 ½ Makrs)
QUESTION 5 (d)
Where a person is married under the Act but dies in testate, the estate will be distributed according to the provisions of the Administration of Estate Laws and not customary laws. The court has the discretion to grant administration having regards to all the rights of the parties. Therefore, the husbnads and children can apply for letters of Administration to enable them legally administer the estate of the deceased.
If the deceased was not married under the Marriage Act, but is subject to Islamic Law or the Customs of the land, then these will determine the Administration of the Estate (1 ½ Mark)
QUESTION 5 (e)
(We drafted a power of attorney already, above; see it)
BY THIS POWER OF ATTORNEY made this day…of ……………………………….2011, I, Engineer Araba Johnbull of ……………………………………………………
APPOINT Dr. Damilola Andrea of …………………………………………………………………………to be my Attorney in my name and on my behalf to do all or any of the following things:
1. To negotiate, purchase and handle all the perfection of the title in respect of the properties I am purchasing in Abuja and Portharcourt at these respective addressess on my behalf.
2. To do all such things necessary and incidental to the powers herein conferred.
I hereby declare that this Power of Attorney shall be irrevocable for one year
IN WITNESS of which I Engineer Araba Johnbull has set my hand and seal the day and year firstr above written.
SIGNED SEALED AND DELIVERED by Engineer Araba Johnbull.
In the presence of :
Name:
Address:
Occupation: Notary Public
Signature:
(5 Marks)
QUESTION 5 (f)
The options open to Zenith Bank PLC in creating a legal Mortgage in respect of N25 million loan advanced to Mrs. Amaka Johnbull are:
1. Assignment
2. Sub-demise or sub-lease
3. Statutory Charge. (1 ½ Marks)
QUESTION 5 (g)
Where there is additional facility granted on the same mortgaged property, there will be the need for úp stampingto reflect the increased facility. I would advice Diamond Bank Plc tto up stamp the mortage deed of N23 million granted to Engineer Araba Johnbull Owoniboys Technical Services Ltd v UBN (1 ½ Marks)
QUESTION 6 (a)
i. Considereation Received -=N=5,000,000
Gain Made -=N=4,800,000
Less Allowable Income
– Cost of purchase -=N=200,000
– Cost of Building -=N=800,000
– Cost of Renovation -=N=500,000
– Cost of Advertisement -=N=550,000
– Solicitors Fee for sale -=N=1,000,000
– Total Allowable Expenditure -=N=3,050,000
– Profit (Less allowable expenditure) =N5,000,000-N3,050,000-=N=1,950,000
Capital Gain Tax 10% of =N=1,950,000=N195,000 (1 ½ Marks)
ii. Capital gains Tax
Stamp Duties
Personal Income Tax
Land Use Charge (Tenement Rates)
Consent Fees
(2 ½ Marks)
iii. A solicitor must not collude with clients to avoid or evade taxation.
A solicitor must advice clients to pay taxes on property transaction
A solicitor must pay his tax when he receives an income
He must also remit VAT as appropriate(1 Mark)
iv. A bill of charges must contain particulars of principla items, dated, address to the client, signed by teh solicitor or a partner in the firm: (1 Mark)
v. The types of fees applicable to a solicitor in respect of property transactions are
Scale Fees
Fixed Fees
Appearance Fees
Hourly Fees
Percentage Fees
Contingent Fees
(2 Marks)
vi. Counsel must prepare a bill of charges which should contain particulars of principal items, must be served on the client personally and the counsel must wait for one month after delivery of the bill of charges before commencing the action.
Section 16 (2) LPA, OYEKANMI V NEPA (1 Mark)
vii. Allowable income is income that is wholly, exclusively and necessarily incurred for the acquisition of the asset together with incidental cost. Generally, allowable income includees:
– Cost of acquisition
– Incidental cost of acquisition
– Expenditure incurred for enhancing the value
– Expenditure for establishing and defending title
– Incidental cost towards disposal of the asset
– Fees, commission and remuneration paid to professionals.
(1 ½ Marks)
QUESTION 6 (b)
i. A search in respect of the property will be conducted at the Registrar of Titles, Lagos Lands Registry. This is because the property is located in Ikoyi, Lagos where the Registration of Titles system applies. Under the registration of Titles system, registration is conclusive proof of title. A physical inspection of the land will also be necessary. (1Mark)
ii. (1) Assumming the property is located in Ibadan, Oyo State, the search will undertaken at the Lands Registry, Ibadan Oyo State and Physical inspection of the Property. (1/2 Mark)
(2) Draft of SEARCH REPORT
9TH MAY 2011
DESCRIPTION OF PROPERTY: 10, RING ROAD, IBADAN OYO STATE
PARTICULARS OF PROPERTY: CERTIFICATE OF OCCUPANCY
DATED 12/10/1970 AND REGISTERED AS 14/13/70 AT THE LANDS REGISTRY, IBADAN, OYO STATE
NAME OF REGISTERED OWNER: ALHAJI ADEBAYO SANUSI OKAFOR
NATURE OF INTEREST:
ENCUMBRANCE:
OBSERVATION/COMMENTS:
NAME AND SIGNATURE OF COUNSEL
(see the search report we already drafted above, for the format)
(2 Marks)
iii. Both documents contain a summary of evidence of the history and types of the title of the vendor. An abstract of title contains a review or previous owners (lien, encumbrances, mortgages, easements) or any other matter that affects the ownership of the property. An epitome of title contains a schedule of documents and events which constitute the titel and is acoompained by photocopies of the documents. (1 Mark)
