Imagine purchasing a property for 300 millions of Naira, believing you are acquiring ownership, only to discover that you have merely secured a leasehold interest. This is the harsh reality for those who mistakenly receive a Deed of Sublease instead of a Deed of Assignment
Emmanuel Thomas l Monday, April 14, 2025
LEKKI, Lagos – Purchasing a property is a significant milestone, often representing a lifetime of savings and dreams.
In Nigeria, like many other countries, the legal documentation surrounding property transactions is crucial for securing ownership.
However, a seemingly minor detail in the documentation can lead to a major discrepancy: the issuance of a Deed of Sublease instead of a Deed of Assignment or Deed of Conveyance.
This seemingly technical difference can transform a supposed property owner into a mere tenant, despite investing substantial sums of money.
Understanding the distinction between these two documents is paramount.
Deed of Assignment: True Ownership Transfer
A Deed of Assignment is a legal instrument that transfers the remaining interest of the assignor (the seller) to the assignee (the buyer). Essentially, it conveys the entire residue of the assignor’s interest in the property.
When a Deed of Assignment is properly executed, the buyer steps into the shoes of the seller, assuming all the rights and responsibilities associated with the property’s title. This signifies a complete transfer of ownership, subject to any existing overriding interests.
Deed of Sublease: A Temporary Arrangement
On the other hand, a Deed of Sublease creates a landlord-tenant relationship. It grants the sublessee (the buyer) the right to occupy and use the property for a specified period, as stipulated in the sublease agreement. Importantly, the sublessor (the seller) retains the superior title and ownership rights. Upon the expiration of the sublease, the property reverts to the sublessor.
The Pitfalls of a Deed of Sublease When Expecting Ownership
Imagine purchasing a property for 300 millions of Naira, believing you are acquiring ownership, only to discover that you have merely secured a leasehold interest. This is the harsh reality for those who mistakenly receive a Deed of Sublease instead of a Deed of Assignment.
The consequences can be severe:
* Limited Ownership Rights: Sublessees do not have the same rights as owners. They cannot freely sell, mortgage, or significantly alter the property without the sublessor’s consent.
* Time-Bound Interest: The sublease is for a fixed term, and upon its expiration, the property reverts to the sublessor. This means the investment is not a permanent asset but a temporary right to use.
* Potential for Disputes: The sublessor may impose restrictions or conditions on the sublessee’s use of the property, potentially leading to disputes and legal battles.
* Reduced Property Value: A property with a sublease interest is generally less valuable than a property with full ownership rights.
Why Does This Happen?
Several factors can contribute to the issuance of a Deed of Sublease instead of a Deed of Assignment:
* Lack of Legal Awareness: Some buyers may not understand the difference between the two documents, leading them to unknowingly accept a sublease.
* Fraudulent Practices: Unscrupulous sellers may intentionally issue a sublease to deceive unsuspecting buyers.
* Complex Land Ownership Structures: In some cases, the seller may only hold a leasehold interest, limiting their ability to transfer full ownership.
* Failure to conduct proper due diligence:
Lawyers or buyers failing to conduct proper searches at land registries.
Protecting Yourself:
Due Diligence is Key. To avoid falling victim to this costly mistake, buyers must exercise due diligence:
* Engage a Reputable Legal Practitioner: A qualified lawyer can review all documents and ensure that the correct instrument is used.
* Conduct Thorough Title Searches: Verify the seller’s ownership status at the relevant land registry.
* Carefully Review All Documentation: Understand the terms and conditions of the agreement before signing.
* Seek Clarification: Never hesitate to ask questions and seek clarification on any aspect of the transaction.
* Ensure that the land has a Certificate of Occupancy(C of O) or a Governor’s Consent: This is a very vital step in the process of purchasing land in Nigeria.
He assured that the issuance of a Deed of Sublease instead of a Deed of Assignment/Deed of Conveyance can have devastating consequences for unsuspecting property buyers
It is crucial to understand the distinction between these documents and to conduct thorough due diligence to protect your investment.
Remember, a seemingly small detail can make a world of difference between owning your dream home and simply renting it.
