A deed is a document transferring legal interest in land from the vendor to the purchaser. At Common Law. A seal instrument containing contract or covenant delivered by the party to be binding thereby and assented by the party to whom the contract or covenant runs. A Deed can also be in the form of indenture. In Common Law conveyancing, a Deed executed or purporting to be executed in part between two or more parties is distinguished by having the edge of the paper on which it is written indented or cut at the top in a particular manner.
At Common Law, for an instrument to be a Deed, it must comply with the following requirements: i. it must be written on a parchment or paper ii. It must be written in the manner specified by some person or corporation named in the instrument. Thirdly, it must be express that the person or corporation so named makes, confirms, consents to some interest in property (whether legal or equitable) title or claim.
When is a Deed necessary?
1. The transfer of legal interest in land e.g. Deed of Assignment
2. A lease for a term of years exceeding three years
3. A promise without consideration e.g. Deed of Gift
4. Appointment of an agent authorized to execute a Deed e.g. Power of Attorney
5. Creation and discharge of a legal mortgage e.g. Deed of Conveyance and Deed of Release
6. Trustee Vesting Declaration
7. Share Transfer Agreement under CAMA
When is a Deed not necessary?
1. Assent by Personal Representatives
2. Surrender by operation of law (esp. in leases)
3. Short-term leases (less than three years)
4. Receipts not required by law to be under seal
5. Vesting Orders of the court
6. Conveyancing taking effect by operation of law
7. Certain disclaimers
Division of a Deed
1. Introductory part: This consists of preliminary matters such as the commencement, date, parties and recitals.
2. Operative part: This consists of the testatrum and other important clauses like the receipt clause. This is the part that transfers the interest from the transferor to the transferee.
3. Miscellaneous Clauses: This consists of clauses like indemnity clause, acknowledgement for safe custody and production clause.
4. Concluding part: This consists of the testimonium and provides for the schedule (if any), the execution and attestation clause.
ANATOMY OF A DEED
1. Commencement: At Common Law, the practice was to commence the Deed with the words “This Indenture”. The majority of modern drafters prefer to begin with name of the transaction “THE DEED OF ASSIGNMENT” or “THIS DEED OF MORTGAGE” written in capital letters.
2. Date: A deed takes effect from the date of its delivery and not from the day in which it is made or executed. When a Deed contains no date, oral evidence is admissible to show when it was written and from what date it was intended to operate. See S. 125 Evidence Act 2011. In practice, conveyancers draft Deeds without date and this is for two reasons. First, S. 125 Evidence Act provides for presumption as to date of documents. Secondly, to avoid the date in the Deed being in default in regulation to the Stamp Duties Act.
3. Parties: The names and addresses of the parties must be included to identify them because as a general rule a stranger can’t sue on the terms of a Deed. Only parties to a Deed can sue to enforce the terms of the Deed. This is the rule of privity of contract. However, the rule doesn’t apply to the sale of family land. The reason is simple. Each member of the family has an interest in that property which is recognized by law. If a party is a registered company, the description must show its place of registration and registration number. A Deed may be between two or more persons all of whom may be individuals or companies.
4. Recital: these are statements of the material facts that constitute the background of the transaction. Recitals are drafted in a chronological order. The order must be easy for the reader to read.
5. Operative part: this begins with the testatrum. The testatrum in a Deed expresses the parties’ intention. It is also known as the witnessing clause. The operative part also provides for other sub-clauses. This is the heart of the Deed because it is the part that contains the actual agreement between the parties.
What is delivery in Deed of Transfer?
In Awojugbagbe Light Industries v Chinukwe, the court noted that the final and absolute transfer of a deed properly executed to the grantee or to some person for his use in such a manner that it can’t be recalled by the grant constitutes delivery. It is also not necessary that the person executing should not part with physical possession of the instrument. A deed takes effect from the time of its delivery and not from the day stated therein to have been made or executed.
The term delievery in law is not synonymous with the physical exchange of signed and sealed documents between the parties thereto. It doesn’t mean handing over of a document to the other side. Delivery means an act done so as to evince an intention to be bound. Even though the Deed remains in the possession of the maker or his solicitor, he is bound by it if he has done some act evincing an intention to be bound.Delivery must be distinguished from escrow. An escrow is a conditional delivery. Until the specified time has arrived or the condition has been performed, the instrument is not a deed. An example is where the document states that the parties are bound by the agreement subject to the condition of vacant possession.