Business transactions, especially the ones pertaining to land can sometimes become problematic – snowballing into a series of legal battles. But this can always be avoided if everything is well documented and duplicated. Even if the transaction is between family members or trusted friends, a simple agreement can save all the trouble that could have resulted from a misunderstanding. Unlike oral agreements that can be easily denied, written and signed ones can never be.
When they are written, it is wise to read it out, then allow the parties read for themselves, just to be sure of the facts before appending signatures.
In order to avoid the chaos that come from land disagreements, you need to know how to write a land agreement or at least know what it should look like.
What is a land agreement?
A land agreement is a document for the two parties involved to work out the details of the transaction and the terms the buyer must fulfil before buying the land. A land agreement should be written or validated by a lawyer or legal company.
Below are the steps that one needs to take in writing a land agreement in Nigeria.
Identification – This is a very important information that must be stated before the details of the transaction. When you open an agreement, the first thing you should look out for is the name of the parties involved in the agreement, who the vendor and the recipient is, or what companies are involved in the transaction. When you write an agreement, the first thing to do is identify the parties involved or the companies representing them. Basically, both names should be the first thing on the agreement.
Description of Property – The next thing on the agreement you should look out for is the description of the property itself. You should state everything about the land, operations past or ongoing on the land and also the easiness on the land. Ensure that you’re not leaving out any information and if you can, include a picture showing the property.
Payment Plan – Money becomes an issue that people disagree over when they don’t state the terms of payment at the initialization of the transaction. This is why this segment is important. Here, the vendor will have to state the advance payment that should be made before the transaction commences and to show the commitment of the recipient to the said transaction. The agreement should also state the amount that would be paid at the close of the transfer of title, the medium with which it was paid through, and the expected balance.
Warranties – Do not buy a product without having an idea how long it’ll be durable for; how its acquisition will benefit you, and ease that having the product will give to you. In the case of landed properties, the land agreement should equally guarantee that the transfer of title will be carried out at the appointed time, that the land will be just as described when the buyer eventually sees the property. Make sure you get warranty that you’re getting your money’s worth.
The closing date – on the land agreement, there should also be a segment where the closing date of the transaction is boldly stated. This is the date on which the final payment for the land is made and the title is transferred to the buyer. It is Important that the time frame is indicated on the agreement so that either parties involved cannot delay on the payment or on the transfer of title. The consequences for any delay even by one day is losing the property of the buyer. So this helps to keep both parties constantly aware of the timing.
Standard Contractual Provisions – conflicts are likely to arise when this part of agreement is omitted. You need to clearly state on the agreement that provisions are not made for a third party and therefore assignability of the property to a third party is disallowed. This will prevent the both parties involved from signing their rights on the property over to a third party. Also ensure that the signature lines are consistent with the number of parties expected to partake in the signing of this agreement. In some cases where more than one representative from a company is required to sign, it is important that there is a signature line for each of them to sign on.
If this process might seem difficult, professional real estate companies like Fesadeb Ltd have proven record in helping clients in this and other areas of real estate and housing.