Procedure for Perfection of Individual Property Mortgages in Abuja

The most common types of security used in banking transactions in Nigeria include mortgages, charges (fixed and floating), assignments, pledges, and liens.

What is a Mortgage?

A mortgage is a legal or equitable conveyance of title in property as a security for the payment/repayment of debt or the discharge of some obligations for which it is given, subject to a condition that the title shall be re-conveyed if the mortgage debt is liquidated. Since a mortgage is a legal transaction affecting title to property, it must be done in writing in the form of a deed.

A Mortgage is used as a security for a right in property vested in a creditor (mortgagee) to have rents and profits applied to satisfy the debts and, upon default by the debtor (mortgagor) to liquidate the loan, to enforce the security by sale or foreclosure.

Perfection of a Mortgage

Perfection of a mortgage is the validation of legal title documents to the property that is the subject of a mortgage charge over it. The essence of perfection is to regularize title documents either against third parties or to retain documents upon default by the debtor; perfection may also be regularized upon liquidation of a mortgage.

The procedure involved in perfecting a mortgage deed is as follows:

1. Consent

An application for consent is made to the office of the Minister of the Federal Capital Territory through the land registry office, the Abuja Geographical Information System (AGIS).

There is no timeline to obtaining consent as such consent is required to be obtained prior to granting of the security. Typically, the timeline for obtaining consent is about three (3) to four (4) months.

2. Stamping

The statutory obligation to stamp documents that transfer or create a proprietary interest in assets i.e. legal mortgages, debentures or charges, is provided for under the provisions of the Stamp Duties Act 2010 (the “Act”) with specific emphasis on Sections 3, 23 (1) and (4) of the Act. In line with the Act, it is necessary to stamp all documents that transfer or create a proprietary interest in assets within 40 days of the execution of such document.

3. Registration

The law prescribes that registration must occur within two (2) months from the date of creation of the relevant security document. Registration is deemed to occur when the relevant documents are delivered to the Land Registry (AGIS).

The following documents will be required for registration:

• Evidence of payment of stamp duties
• Consent letter from the mortgage or
• Photocopy of brief from bank instructing on the perfection of the transaction
• Copy of recent tax clearance.
• Payment receipts of ground rents for previous and current year.
• Four (4) copies of the duly stamped and executed Deed

Duration

The perfection process typically takes 6-9 months to complete.

4. Cost of Perfection – Official Fees

We hope you find guidance in the foregoing.

Fatima Inusa

Real Estate Advisory

Andi Daze Legal