INSTRUMENT OF TRANSFER (IOT)
The instrument of transfer takes the form of a conveyance or an assignment of the totality of the transferor’s interest in the property to the transferee usually for consideration. Such instrument is required to be by Deed in order to convey a legal estate in favor of the transferee. See S. 3, Real Property Act 1845; S. 77 PCL.
The preparation of the IOT should be made by the purchaser’s solicitor for the approval of the vendor’s solicitor. Some states have taken care of imposition of solicitor especially PCL states. See S. 73 PCL.
An instrument of transfer will be sent to the vendor for necessary amendment. Upon approval by the vendor’s solicitor and the purchaser’s solicitor shall prepare four engrossed copies (the original copy and three carbon copies) to meet the requirement of stamping and registration. It is expected that after completion, all relevant title documents will be handed over to the purchaser for his signature.
We now move to consider the form and content of an Instrument of Transfer. They include:
a. Commencement Clause which includes date and parties.
b. Recitals: These are statements of fact stating the background to the transaction. There are two types of recitals; narrative recitals and introductory recitals. The former sets out the title while the latter set out the purpose of the Deed itself. Recitals function as estoppel (a rule of evidence precluding a party from denying the truth of some representation earlier made by him) against the part making it. Recitals also make reference(s) to statutory provisions where the law has imposed certain obligations on the party e.g. the requirement of Governor’s consent under the Land Use Act.
c. Operative part: This contains consideration and receipt clauses, word of grant, parcel clause, habendum etc. i. Consideration refers to the purchase price of the property; it should include the deposit already paid. The absence of the consideration clause doesn’t invalidate the Deed ii. The receipt clause mainly indicates the vendor’s acknowledgement of the receipt of the purchase price. After payment of the purchase price, the receipt of payment may be endorsed on the assignment or in it. iii. As regards the Word of Grant, no particular word is required to convey interest to the purchaser; what is important is that the intention of the parties is clear. The common word is “Assign” or “Convey” with respect to assignments and “Transfers” with respect to conveyance of a registered land iv. The parcel clause refers to the exact description of the measurement of land to be conveyed v. the Habendum describes the estate the assignor is giving to the assignee. It describes the nature of interest whether freehold, leasehold or Right of Occupancy.
d. Covenants: In short, a covenant is an agreement to do or refrain from doing certain things.
e. Indemnity Clause: This means reimbursement against anticipated loss. The clause is common amongst conveyancers in Nigeria to prevent fraud owing to the nature of land holding under the Land Use Act.
f. Testimonium: This is the beginning of the concluding part of the Deed of Assignment and it links the content of a Deed with a person’s signature.
g. Schedule: This is available where the body of the Deed may be crowded
h. Execution and Attestation Clause: it must be signed, sealed and delivered. Also, attestation before a magistrate may be required. Please note that where an illiterate person is involved, an illiterate jurat must be present otherwise the illiterate may be allowed to deny it.
i. Exchange of Agreement: parties exchange agreements and the law presumes that the agreement has been concluded and interest effectively transferred.
j. Perfection of Instrument: Basically, this entails registration under the applicable laws. Any document that transfers interest is registrable. The effect of non-registration would be carefully analysed under a separate topic.