October, 2018, Volume 2 Issue 3

The importance of decent and affordable housing units in any given society is very fundamental and critical to the sustenance of the shelter needs of every individual, family and community in that society. Therefore, without a doubt, availability of decent and affordable housing units has a direct implication and influence on the health and overall welfare of the people. As important as this is, there is an acute housing deficit in Nigeria to cater for the shelter needs of its numerous citizens.

For instance, President Muhammadu Buhari while addressing participants at a symposium during the Shelter Afrique 35th Annual General Meeting organised in Abuja sometime in June 2018 disclosed that "Nigeria requires one million housing units annually to reduce its current housing deficit of about 17 million in order to avert housing crisis by the year 2020." This statement represents the huge gap between the demand and availability of housing units in the country.

Lagos state, being the former capital of the Nation and its commercial nerve, has a very high rate of lack of affordable housing facilities. In order to address this huge challenge with the intendment of creating a workable system that will enable both the State Government and Private Estate Developers to provide necessary support towards bridging the huge gap of housing deficits prevalent in the state, the Lagos State Government enacted in 2010 the Lagos State Mortgage and Property Law("The Law"). The Law for all intents and purposes provides a legal framework aimed at redefining Mortgage Transactions in Lagos state by repealing the Conveyancing Act, 1881 previously applicable to mortgage transactions in the State.

Essentially, the Law seeks to achieve creation of a long term funding that will enable both the State Government and Private Sector to build and sell properties on a mortgage basis to individuals who will pay back over a long term. While the State Government will concentrate on providing mortgage housing units to members of its workforce, the Private Estate Developers should be able to develop housing units on mortgage basis and sell to interested individuals, companies and entities with the hope of recouping their investment in the long run.

The Law is quite detailed with about 69 Sections and for the purpose of this article, the Law will be discussed under various sub-heads with a view to highlighting essential innovations aimed at improving mortgage transactions in Lagos State. The following areas of interest will be discussed in subsequent series of this publication:

1. Definition of Mortgage

2. Creation of both Legal and Equitable Mortgages under the MPL.

3. Realisation / Enforcement of Mortgage and the role of courts under the MPL.

4. Balancing the interest of both mortgagors and mortgagees under the MPL

5. Discharge of mortgage

6. Salient improvements made by MPL and its inherent challenges.

7. X-ray of the Lagos State Mortgage Board with innovation of 2015 Amendment.

Definition of Mortgage

Lindley MR in Santley v. Wilde defined a mortgage as

a conveyance of land or and assignment of chattels as a security for the payment of a debt or the discharge of some other obligation for which it is given.

This definition was later described as classic by Waldock in his book, "The Law of mortgages". Today, this definition no longer represents the true meaning of mortgage in Nigeria as there is no more in existence any radical title in land that can be conveyed. The reason being that upon the enactment of the Land Use Act, 1978, the title to land in each state is now vested in the Governor of that State. Consequently, while title to land now belongs to the Governor, individuals or landowners only have an interest in land now known as Right of Occupancy.

Accordingly, in recognition of this trend, the Mortgage and Property Law of Lagos State defines mortgage as:

A transfer of interest in specific movable or immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, and existing future debt or the performance of an engagement which may give rise to pecuniary liability, and it includes any charge or lien on any property for securing money or money's worth.

The MPL definition of a mortgage is very broad and one can be tempted to conclude that there is the possibility of creating a mortgage over personal property as a way of innovation under the law. It must be noted however, that the law does not cover mortgages of personal property or choses in action as Section 65 of the Law only describes mortgage in relation to interest in land… ("To be continued")