During the purchase of real estate, there are documents that must be issued and signed. These documents show the authenticity of the transaction.
The Deed of Assignment and Contract of Sale are both legal documents used in property transactions in Nigeria. It doesn’t matter whether you are buying the property in Abuja or Anambra.
Each of them have their unique qualities and roles they play during real estate transactions.
In this article, we are going to be exploring the difference between the two legal documents/
What is a Deed of Assignment?
A Deed of Assignment is the legal equivalent of a receipt for goods purchased at a store. You can liken it to the particulars of a newly bought vehicle.Â
This legal document gives the bearer all legal rights to the transferred property. The bearer can use it as he or she deems fit.
A Deed of Assignment needs to clearly identify the seller and the buyer for it to be legally binding. It must also contain the following information:
- Date of transfer of ownership
- Addresses of the seller and buyer and how they are binding to the successors. Friends and other people who represent the seller and buyer in any capacity
- Price of purchase of property
- Detailed description of property, including the size of the property
- A history of transfer of ownership of property, from the date it was first acquired to the time it is to be sold to the new owner
- Covenants or promises that the buyer and seller will undertake in order to execute the deed
- A section for the Commissioner of Oaths or Governors Consent to authenticate and sign the agreement
- Signature of the seller and buyer
Also Read: 10 Frequently Asked Questions By First-Time Real Estate Investors in Abuja
What is the format of a Deed of Assignment?
A Deed of Assignment is often recorded in the local land registry as proof of transfer of a property to the new owner. It is a legally binding document in real estate transactions.
Every deed of assignment document has a format that include a cover page that shows the identities of the buyer and seller as well as a description of the land.
It has a second page that shows the date of the transfer, name, the location of the buyer, and the location of the seller. It also shows a history of how the seller came into possession of the land.
The third page shows the description and cost of the land. It shows a survey plan number including the date and name of the surveyor. It goes on to show the promises that both buyer and seller would abide by after the transaction is completed.
Finally, the last page displays the signatures of the buyer and seller as well as the signatures of witnesses to the transaction.
Property buyers should involve a lawyer during this process especially if they are not familiar with the documents that are required to be prepared and transferred to them by land sellers. The lawyer will protect their interest during the course of property transactions.
Who Issues a Deed of Assignment?
In signing the Deed of Assignment, the parties involved are referred to as the assignor (seller or vendor) and the assignee (buyer). You must involve a lawyer in the issuance of the Deed of Assignment.
The role of the lawyer (or attorney) is to prepare the Assignment and issue to both parties to sign. The assignee’s attorney prepares the deed of assignment and presents to the assignor for approval and execution.
Also Read: 7 Real Estate Mistakes You Must Not Make If You Live Abroad
Who Needs a Deed of Assignment?
The parties involved in a real estate property transaction needs a deed of assignment. It is that document that is used to move ownership of real estate from one person to another.
You need a deed of assignment in Nigeria to finish a real estate deal.
When Does a Deed of Assignment Become Necessary?
A deed of assignment becomes necessary when a real estate transaction has approached its conclusion. It is a document that transfers ownership from the seller (assignor) to the buyer (assignee)
Now let’s take a look at the contract of sale and see how it compares to the deed of assignment. The deed of assignment and contract of sale has a difference that we should pay attention to during real estate transactions.
What is a Contract of Sale?
A Contract of Sale is an agreement between the buyer and seller specifying the terms and conditions for the sale of a real estate property.
In the contract of sale, the seller agrees to sell, and the buyer agrees to buy. It outlines the terms and conditions for the sale and purchase of the property.
The contract of sale is a preliminary land document that both the seller and the buyer has to sign to transfer land ownership to the buyer. Execution of the contract of sale comes at the second stage of a land transaction.Â
The pre-contract stage is the first. The contract of sale is documented in writing but is not necessary to seal it.
This document protects the parties to the agreement. It contains terms that the parties have expressly agreed to, and no party can withdraw from the contract without being liable for a breach of contract.
Also Read: How to Easily Spot Land Scams in Anambra [Latest Trends]
Who Issues a Contract of Sale?
The solicitor of the vendor (seller) prepares the contract of sale and issues it to the lawyer of the buyer to review.
The contract of sale is an important document and must be agreed upon by both parties before a real estate transaction can proceed.
A contract of sale contains the following core components;
- Full details of the parties
- Particulars of the property you want to purchase (location, survey plan, etc.)
- Particulars of witnesses
- Purchase price of the property
- The capacity of the vendor
- Risk and insurance
- Possession before completion
- Completion date of the transaction
- Provision for fixtures and fittings
- Specific terms, risks, etc.
At What Point of Purchase Is the Contract of Sale Necessary?
The contract of sale becomes necessary after the pre-contract stage. At this stage, the buyer, having properly inspected the property, decides to buy.
The contract of sale sets the framework for the transaction.
Which One Comes First, Deed of Assignment or Contract of Sale?
In real estate transactions, the contract of sale precedes the deed of assignment. It serves as a precursor to the actual transfer of ownership. The contract of sale sets the framework for the transaction.
Also Read: Money Saving Guide for Your First Real Estate Investment in Abuja
What is the Difference Between Deed of Assignment and Contract of Sale
The deed of assignment and contract of sale have a difference. The difference is that the role they play.
While they are both legal documents used in Nigerian property transactions, they are for separate purposes.
A deed of assignment is the legal equivalent of a receipt for goods purchased at a store. You can also liken deed of assignment to the particulars of a newly bought vehicle.Â
This legal document gives the bearer all legal rights to the transferred property. The bearer can use it as he or she deems fit.
A contract of sale on the other hand is an agreement between the buyer and seller specifying the terms and conditions for the sale of a real estate property.
In the contract of sale, the seller agrees to sell, and the buyer agrees to buy. It outlines the terms and conditions for the sale and purchase of the property.
Both deed of assignment and contract of sale are documents every investor desires to have during real estate transactions in Nigeria. The difference between the two lies in their usage and the point of transaction you need them.
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