Before purchasing a property in Lagos or anywhere in Nigeria, it’s important you understand the difference between a contract of sale and a deed of assignment.
Lagos State is a very busy place that has been nicknamed “the city that never sleeps.” It is arguably regarded as Nigeria’s hustle headquarters. Lagos is believed to be where you can come up with nothing and make something.
There are many beautiful places Lagos residents and outsiders wish to visit even once, or also have a property in. Owning real estate in Lagos is a big feat that many want to achieve.
But it isn’t all about dreaming; there are a couple of things about real estate in Lagos that you must know. One of the things you must know is how to understand real estate documents.
There are important documents that must be issued and signed before a real estate transaction is completed. Some of the documents are the Contract of Sale and Deed of Assignment. Reading on, you will learn what the documents are and their differences.
What is a Contract of Sale?
A contract of sale is a type of document issued for a real estate transaction. It is a document establishing the intention of a buyer to buy real estate and the willingness of the seller to sell.
It is a binding document that recognizes the involved parties and the terms and conditions of their agreement. A contract of sale contained details of a proposed real estate transaction. It is proposed because the conditions are not met yet at this stage, though the involved parties have agreed to meet them.
The documents usually contain details such as the agreed price for the real estate, payment plan, date of agreement, and the name and address of the vendor and buyer.
Also Read: How Omonile Scams Work in Lagos and How to Avoid Them
What is a Deed of Assignment?
A deed of assignment comes after the terms and conditions agreed on in the contract of sale have been met. The deed of assignment contains core, important information about the transaction. The documents ascertain that both parties have met every condition and term.
Some of the details you can find in the deed of assignment are the parties’ addresses, the ownership history of the real estate from the previous owners to the new owner, the fulfilled payment plan, size, and location.
It is a binding document that finalizes the agreement reached in the contract of sale and the transfer of ownership.
Difference Between a Contract of Sale and a Deed of Assignment in Lagos
There are many things that distinguish both real estate documents from each other.
Purpose of Document
Each of the documents serves a distinct purpose. They are brought in to achieve a specific aim.
The purpose of the contract of sale during a real estate transaction is to establish interest and willingness to buy and sell by the involved parties. It is simply used to
A deed of assignment, on the other hand, is used to authenticate the transaction. It shows that both parties have fulfilled the promises contained in the contract of sale.
Also Read: What to Look Out For When Buying a Land in Lagos
Execution Time
A contract of sale document is executed at the beginning of the real estate sale process. When a potential real estate buyer meets a seller and indicates interest in the property. A contract of sale is first prepared. The document would contain the details of the property and terms and conditions.
While the deed of assignment is executed at the final state of the real estate transaction. The document would still contain the information in the contract of sale. But this time as a fulfilled promise, assuring that the parties have fulfilled their share of responsibilities.
Transfer of Ownership
A contract of sale does not transfer the property’s ownership. It is only used to acknowledge a potential new owner. Also, it is used to document the promises that must be fulfilled by the involved parties.
When you buy goods in the store, you are given a receipt. The receipt transfers the product’s ownership to the buyer. The deed of assignment does in real estate transactions what receipts do in the store. It is proof that all conditions have been met by the new owner and that the old owner agrees.
Document Registration
A contract of sale is a simple document that exists between a real estate seller and buyer. It is for their personal consumption, and though it is considered a legally binding document, it does not require registration.
A deed of assignment is equally a legally binding document that shows the finalization of a transaction and the transfer of ownership. The document must be registered with the Lagos State Land Registry. When the document is registered, it notifies the state of the change in ownership.
Enforcement
The two documents can be enforced but in different situations and ways.
A contract of sale can be enforced when there is a failure to fulfill a promise. If a party decides to do otherwise when the other has fulfilled their promise, then the offended can take legal action using the contract of sale. Though it isn’t registered, the contract of sale should be prepared by a credible lawyer.
Unlike the contract of sale that is between the vendor and buyer, a deed of assignment is more. A deed of assignment is a legal document that can be presented and enforced anywhere. It is a proof of ownership recognized by the state land ministry. It gives the owner the confidence and right to challenge any case against their property.
Also Read: How to Verify Land Ownership in Enugu Even If You Are a Foreigner
Revoking of Document
A contract of sale can be revoked and edited. In a situation where a party fails to meet the agreed conditions leading to a breach in the contract, the contract of sale can be revoked. Also, it can be edited if there are changes to the previous agreement.
In the case of a deed of assignment, it can’t be revoked or edited. It seals the real estate transaction. That is one of the reasons it is issued after other conditions have been met and both parties are satisfied.
Conclusion
While owning real estate in Lagos is a worthy goal, it is important to be well-informed. Understanding the difference between a contract of sale and a deed of assignment in Lagos will help you better understand the transaction process.
Always remember that these documents must be prepared with the help of qualified individuals such as a property lawyer, surveyor to measure the land, etc.
Also, ensure that each document contains the necessary information and clauses.
Taking the right steps makes your real estate investment easier and safer.
Do you desire to buy land in Epe, Ibeju-Lekki or Enugu, send a WhatsApp message to +2348134794494