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LAND DEALINGS

OBJECTIVES

General Objective

To understand the concepts of land dealings under the National Land Code 1965.

Specific Objectives

At the end of the unit you will be able to: state the meaning of land dealings. list the types of dealings under the NLC. state the meaning of Transfers, Leases and Tenacies. define the importance of land registrations and dealing in land. list the dealing instruments that require registration under the NLC. state the meaning of Charges and Liens. state the meaning of Easement. state the meaning of caveat and its types. state the meaning of prohibitory order and its effect.

UNIT 5

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Under Division IV of the Code, only four types of dealings are recognized and these are:

a) Transfers;b) Leases and tenancies;c) Charges and liens; andd) Easements.

5.1 THE IMPORTANCE OF REGISTRATION IN LAND DEALINGS.

All dealings have to be registered and no instrument effecting any such dealing shall operate to transfer the title to any alienated land until it has been registered. However, even before registration is being effected the dealing is still effective since the parties are bound by contractual obligations.

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 description of the nature and effect of the instrument, the identity of the parties thereto, and a statement of its number in the “Presentation Book”, the reference under which it is filed, and the time and date from which the registration is effective. (Hj. Salleh,1989)

INPUT 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 prohibitory order, which are actually

“restraints on dealings”.

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The effect to registration is that the law confers on the transferee, leasee or chargee or the person or body in whose favour an easement has been granted and registered, as the case may be, the seal indefeasibility.

-See section 340(1) NLC.

5.2 TRANSFERS

What may be transferred?

According to section 214 NLC, the following are capable of being transferred under the Code namely,

a) the whole, but not part only, of any alienated landb) the whole, but not part only, of any undivided share in any alienated landc) any lease of alienatedd) any charge and e) any tenancy exempt from registration

5.2.1 Powers of Transfer and its Restrictions

The power to transfer is subject to limitations and prohibitions whether imposed by the National Land Code or any other written law for the time being in force. It is also limited by any restriction in interest to which the land is for the time being subject and in relation to leases, charges and tenancies exempt from registration, the provisions thereof, express or implied.

Note: No lease or charge may be transferred to two or more persons or bodies

otherwise than as trustees or representatives. Transfer of land must be effected by Form 14A and the title passes and vest in

the purchaser upon the registration of the transfer. The purchaser also gets the benefits of any registered interest then enjoyed with the land.

5.3 LEASES AND TENANCIES

A lease is defined as a conveyance by which the proprietor of land (lessor) grants to another person (lessee) an interest in the land less than a freehold and less than that to which the lessor is himself entitled.

The NLC provides for two distinct types of leases and they are a term not exceeding three years and for a term exceeding three years. The first type is referred to as a tenancy exempt from registration and it is not a registerable interest. If all leases were registerable the title to the land would very quickly be filled up with a great deal of short tenancies.

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With regard to leases for term exceeding three years, they may be granted either over the whole or over part only of the land. Leases for a part of the land may be granted for a maximum of thirty years. If the proprietor – lessor is holding the land under a State lease he may not grant a lease to another person for longer than is tenancy has still to run. Leases for a part of the land must include a plan and description of the land so that the portion may be accurately identified.

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Activity 5a

TEST YOUR UNDERSTANDING BEFORE YOU CONTINUE WITH THE NEXT INPUT…!

Fill in the blanks with the correct answer.

1. The NLC provides four main types of dealing. These are transfers; leases and

tenancy; charges and lien; and .

2. The NLC does not require the granting of tenancy for a period not exceeding

years to be registered in the land titles.

3. A form to be used for transfer of land, share or lease is .

4. As provided in section 205(2) of the NLC, person / bodies in whose favour dealings

are capable of being effected are those listed in section ____________ of the NLC.

5. Sec. 214(3) of the NLC prohibits the transfer of lease or a charge to two or more

person / bodies otherwise than as __________________ or representatives.

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Feedback to Activity 5a

1. easement2. three3. Form 14A4. 435. trustees

I hope you are still okey and steady…Let’s go to another

input….

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5.4 CHARGERS AND LIEN

The NLC recognizes two types of security dealings with land and they are charges and liens.

A charge is a transaction (or a dealing for the purposes of the Code) whereby registered proprietor of an alienated land or a lease conveys it as a security for the repayment of a loan, an annuity or any other periodical payment, to another. The proprietor of the land or lease is known as the “chargor” and the person whom the property is conveyed or in whose favour the charge has been effected is called the “chargee”.

A lien is not a registerable dealing. Under section 281(1) of the NLC, it can be created in respect of any alienated land or any lease or sub-lease of alienated land. A lien is created when the proprietor of any alienated land or the lessee or the sublessee for the time being of any alienated land deposits with another his IDT, duplicate lease or duplicate sublease respectively as security for a loan. The person with whom the IDT, duplicate lease or duplicate sublease is deposited is known as the lien-holder and to protect his interest he may apply for the entry of a lien-holder’s caveat. A lien can also be created in respect of an undivided share in any alienated land and the document that needs to be deposited is the copy of the IDT.

5.5 EASEMENT

Section 282(1) of the Code defines easement simply as “any right granted by one proprietor to another, in capacity as such and for the beneficial enjoyment of his land”. The land for the benefit of which the easement granted is called the “dominant” land and the land of the proprietor by whom the easement is granted is called the “servient” land.Rights of easement are either positive or negative in nature. Thus under section 283(1), the Code explicity states that the rights capable of being granted as easement are:

any right to do something in, over or upon the servient land and any right that something should not be so done

Section 283(2) then states that the said rights do not include::

any right to take anything from the servient land any right to the exclusive possession of any part thereof.

INPUT INPUT

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Every easement must possess the following characteristics, namely: there must be a dominant land and a servient land

the right grants must benefit or accommodate the dominant land the proprietors of the dominant land and servient land must be different persons

and the right must be capable of forming the subject matter of a grant.

5.6 INSTRUMENTS OF DEALING According to section 206(1) NLC provides that every dealing shall be effected by the relevant instrument prescribed for that purpose and must be properly registered with the competent authority. There are fourteen types of instrument that require registration under the NLC. These are as follows:-

a) Transfer of land, share or lease (Form 14A)b) Transfer of charge (Form 14B)c) Lease of land (Form 15A)d) Sub-lease of land (Form 15B)e) Surrender of lease (Form 15C)f) Charge – to secure payment of a principal sum (Form 16A)g) Charge – to secure payment of a periodic sum (Form 16B)h) Postponement of a charge (Form 16C)i) Certificate of sale by Court (Form 16F)j) Certificate of sale by LA (Form 16I)k) Discharge of charge (Form 16N)l) Grant of easement (Form 17A)m) Grant of cross-easement – in respect of a party-wall (Form 17B)n) Release of easement (Form 17C)

5.7 CAVEAT AND PROHIBITORY ORDER

A caveat is an entry in the RDT to any land made by RT / LA on his initiative (in the case of a Registrar’s caveat) or upon receiving an application for it’s entry from a certain person or body (in the case of any other caveat). It has the effect of preventing certain instrument of dealing from being registered by the RT / LA. The purpose of a caveat depends on its type.

The NLC provides four types of caveats. These are the Registrar’s caveat, private caveat, lien-holder’s caveat and the trust caveat.

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5.7.1 Registrar’s Caveat

A Registrar’s caveat is entered by the Registrar on the registrar document of title (RDT). So long as the caveat is in force no dealing may be effected in regard to that piece of land. Even dealings pending registration are frozen. A Registrar’s caveat also takes precedence over all other caveats. Basically, the Registrar’s caveats serve four main functions.

To prevent fraud or improper dealings To protect the interests of the Federation or the State authority or any person

who is under disability, e.g. minority, mental disorder, or unsoundness of mind or any person who is absent from the Federation

To secure that land will be available to satisfy the whole or any part of any debt due to the Federation or the State Authority, whether such debt is secured or unsecured and whether or not judgement thereon has been obtained

To correct errors which appear to the registrar to have been made in the register or issue document of title to the land or any other instrument relating thereto.

According to section 319(1)(b) of the NLC the Registrar’s caveat prohibits the followings:- Registration of any instrument of dealing Endorsement of any claim to the benefit of tenancy exempt from registration Entry of any lien-holder’s caveat

However, under section 319(3) of the NLC the Registrar may waive the prohibition where he is satisfied that such an action would not be inconsistent with the purpose of the caveat.

5.7.2 Private Caveat

A private caveat may be entered either to bind the land itself or merely an interest therein. The persons and bodies who may enter private caveat are:-

Any person or body claiming title to, or any registerable interest in any alienated land or any right to such title or interest

Any person or body claiming to be beneficially entitled under any trust effecting and such land or interest The guardian or next-of kin of any minor claiming to be entitled.

According to section 322(2) of the NLC a private caveat which is expressed to bind the land itself prohibits the following:-

Registration of any instrument of dealing executed by or on behalf of the proprietor Registration of any certificate of sale

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Endorsement of any claim to the benefit of tenancy exempted from registration granted by the proprietor Entry of lien-holder’s caveat in respect of the land

5.7.3 Lien- Holder’s Caveat

Section 281 of the NLC provides that any proprietor of land or any lessee for the time being may deposit with any other person or body, as security for a loan, his issue document of title of duplicate lease. Upon such deposit being made, the depositee may thereupon apply to the Registrar for the entry of a lien’s holder caveat in respect of the land or lease. Upon entry of such caveat, the depositee becomes entitled to a lien over the land or lease.

Where the lien-holder has obtained judgement against the land owner or the lessee for the amount due to him as secured by the lien, he shall be entitled to apply to the court for an order for the sale of the land or lease.

According to section 330(5) of the NLC, the effects of lien-holder’s caveat are the same as those of the private caveat. Therefore if the lien-holder’s caveat expressed to bind the land itself, it prohibits the followings:-

Registration of any instrument of dealing executed by or on behalf of the proprietor

Registration of any certificate of sale Endorsement of any claim to the benefit of tenancy exempted from

registration granted by the proprietor Entry of any lien-holder’s caveat in respect of the land.

5.7.4 Trust Caveat

A trust caveat may be entered by the Registrar in respect of any land or interest which is expressed to be held by any persons or bodies as trustees. The effect of the trust caveat shall be precisely stated therein and may be to prohibit, either absolutely or except subject to conditions, the registration, endorsement or entry of all or any of the followings:-

any instrument of dealing, or class or description of instrument of dealing, directly affecting the trust property

any lien-holder caveat in respect of the land

5.7.5 Prohibitory Order

According to section 334 of the NLC, ‘prohibitory order’ means, where land or interest in land held by a judgement-debtor is to be sold in execution proceedings, an order made pursuant to the rules of court by a court of competent jurisdiction prohibiting the judgement-debtor from effecting any dealing therewith or from effecting such dealing therewith as may be specified in the order.

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Once the Registrar has entered a caveat he must serve notice of it on the proprietor of the land. The caveat is

effective until it is cancelled by the Registrar of his own motion or on an application in behalf of the proprietor of the land affected; on pursuant to an order of court made on an application by the proprietor. When the caveat has

been cancelled the proprietor must be notified.

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Activity 5b

TEST YOUR UNDERSTANDING BEFORE YOU CONTINUE WITH THE NEXT INPUT…!

Fill in the blank with correct answer

1. The NLC recognizes two types of security dealings with land and they are ____________and ______________.

2. The NLC provides four types of caveats. These are the Registrar’s caveat, _______________, lien-holder’s caveat and the __________________.

3. The land for the benefit of which the easement granted is called the “_______________” land and the land of the proprietor by whom the easement is granted is called the “_____________” land.

4. One of main Registrar’s caveat function is to prevent fraud or ____________dealings.

5. According to section 330(5) of the NLC, the effects of lien-holder’s caveat are the same as those of the ____________caveat.

Try you best to get all the answers correct…

GOOD LUCK!!

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Feedback to Activity 5b

1. charges, lien2. private caveat, trust caveat3. dominant, servient4. improper5. private

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KEY FACTS

1. The provisions in the NLC require certain dealings in land or interest in land to be registered. This is to ensure that dealings can be done efficiently, cheaply, and with certainty.

2. The issue of land dealings covers the aspects of transfer of land, leases and tenancies, charges and liens and easements.

3. The purpose of caveats and prohibitory order is to prevent land dealings to be carried out without prior knowledge being informed to the caveator or the Court (as in the case of prohibitory order).

Congratulations !!! you have finished with all the inputs and activities. Now move on to the self-assessment!!! Let’s have a

look at it now!!!

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Self-Assessment 5

You are approaching success. Try all the questions in this self-assessment section and check your answers with those given in the Feedback on Self-Assessment given on the next page. If you face any problems, discuss it with your lecturer. Good luck!...

1. State the functions of the Registrar’s caveat.

2. Define the importance of land registrations and dealing in land.

3. State the meaning of these following term:-i. Charges

ii. Easementiii. leases

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Feedback To Self-Assessment 5

Have you tried the questions????? If “YES”, check your answers now.

1. Basically, the Registrar’s caveats serve four main functions.

To prevent fraud or improper dealings To protect the interests of the Federation or the State authority, or any

person who is under disability, e.g. minority, mental disorder, or unsoundness of mind, or any person who is absent from the Federation

To secure that land will be available to satisfy the whole or any part of any debt due to the Federation or the State Authority, whether such debt is secured or unsecured and whether or not judgement thereon has been obtained

To correct errors which appear to the registrar to have been made in the register or issue document of title to the land or any other instrument relating thereto.

2. The provisions in the NLC require certain dealings in land or interest in land to be registered. This is to ensure that dealings can be done quickly, cheaply,

and with certainty for good development of the land.

3. i) A charge is a transaction (or a dealing for the purposes of the Code) whereby registered proprietor of an alienated land or a lease conveys it as a security for the repayment of a loan, an annuity or any other periodical payment to another. The proprietor of the land or lease is known as the “chargor” and the person whom the property is conveyed or in whose favour the charge has been effected is called the “chargee”.

ii) Section 282(1) of the Code defines easement simply as “any righgranted by one proprietor to another, in capacity as such and for the beneficial enjoyment of his land”. The land for the benefit of which the easement granted is called the “dominant” land and the land of the proprietor by whom the easement is granted is called the “servient” land.

iii) A lease is defined as a conveyance by which the proprietor of land (lessor) grants to another person (lessee) an interest in the land less than a freehold and less than that to which the lessor is himself entitled.

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