Governor’s Consent in Land Matters

Governor’s Consent in Land Matters

Governor’s Consent in Land Matters

Consent occurs when one person voluntarily agrees to the proposal or desires of another. Section 22 of the Land Use Act explains that a person may not alienate his Right of occupancy without the consent of the governor first had and obtained. This implies that any alienation without the requisite consent of the governor would render such alienation invalid.

This is because the Land Use Act has vested control of all land in the state, the responsibility of the state governor and alienation of such right which has been granted by the governor, can only be done with the consent of the governor.

Consequences of Failure to Obtain Requisite Consent

By the provision of Section 22 of the Land Use Act, “the holder of a statutory right of occupancy granted by the Governor cannot alienate his right of occupancy or part thereof without the consent of the Governor first had and obtained”. Thus, failure of securing consent where one is required, may lead to the following consequences.

  1. Nullity of Transaction

By virtue of Section 26 of the Land Use Act “any transaction or instrument which purports to confer or vest in any person any interest or right over Land other than in accordance with the provisions of this Act shall be null and void”. Any alienation of any interest in land without Governor’s consent is null and void ab initio.

2. Prohibition of Registration

It is prohibited by the Land Registration Laws of Various States of the Federation to register any instrument transferring any right or interest in land without the requisite consent of the governor. Thus, Section 10 of the Kaduna State Land Registration Law provides that an instrument transferring interest in land which is procured without the requisite consent of the Governor of a State is not registrable. This implies that for an instrument to be registered in the Land registry, consent to that effect must be obtained.

3. Forfeiture or Revocation

In addition to nullity of transaction entered into without consent, the Land Use Act goes further to stipulate that the Governor of a State can revoke right of occupancy of its holder, who alienates by way of sale, assignment, mortgage, transfer of possession, sublease bequest etc. without the requisite consent or approval.

4. Imprisonment or Payment of fine

The Act further provides that a holder who alienates or transfers his right of occupancy without requisite consent will be liable to imprisonment or payment of fine. Thus, Section 28(7) of the Land Use Act provides that “no land to which subsection (5)(a) or (6) of this Section applies held by any person shall be transferred to any person except with the prior consent in writing of the Governor”.

The court may sometimes refuse to declare a transaction illegal as a result of lack of consent. In the case of Solanke v. Abed. The Supreme Court held that “notwithstanding that the consent of the Governor was not obtained as provided under Section 11 of the Native Right Ordinance the transaction was not illegal but can be avoided”. Also, in Awojugbabe Light Industries Ltd. v Chinukwe. The Supreme Court per Iguh JSC held that “any transaction without Governor’s consent is inchoate until the consent is obtained after which it can be said to be complete and fully effective”.

What is meant here is that it is lawful for parties to a mortgaged transaction to begin some negotiation for alienation before seeking for consent. However, the consent must be obtained at the perfection of the transaction. The current position of the law however, is that any alienation without the consent of the Governor is null and void

A Critique of the Consent Requirement

It is very difficult to delimit the extent and scope of powers of the governor in granting or refusing consent. This is more so as no provision is made in the Act that consent should not be unreasonably withheld and so the powers of the governor appear to be absolute. This therefore indicates that there is nothing a holder could do when he complied with all the necessary requirements and consent was withheld or refused.

The basis for this conclusion is founded on the language of the consent requirement, which obliges the holder to seek for the consent without directing the Governor to give the consent, thus making the power discretionary. Hence, in the case of R v Minister of Lands and Reed, Ag S.P.J in interpreting Section 11 of the Land and Native Rights Ordinance, held that “the plain and ordinary meaning of the section is to confer on the Minister discretionary power to grant or withhold consent to alienation of a right of occupancy and accordingly an order of mandamus cannot lie to compel consent to the alienation”.

This article has therefore found that since governors have made regulations for procurement of consent in their various states, they should not (when holders comply with the regulations) withhold consent, and if they refuse after holders comply, the court should compel them to give consent.

Issues in Securing Governors’ Consent

Whoever needs to obtain consent for alienation will no doubt face many problems, which include:

  1. Cost of Processing Consent: In Nigeria, the cost of processing consent is exorbitant. Before processing consent in Lagos state, evidence of tax clearance certificate among other documents. More than half of the economic value of the land would be payable to the government or spent on obtaining consent to alienate. As a result, in Williams v. LSDPC, the Supreme Court categorically declared as “illegal fees” charges of 5% of the consideration (amount) or value of leasehold property. The LSDP demanded these fees as consent fees.
  2. Exercise of Judicious Discretion:

    This exercise of power (the governor of a state’s discretionary power in granting consent for alienation, which a holder cannot challenge even by a court’s order of mandamus) certainly stymies land transactions in this country. The Land Use Act, which grants the Governor the authority to grant consent does not specify how these powers may be used.

There are no criteria as such to guide their exercise and as a result, Governors have come to believe that their powers are absolute and exercise them as such. Consequently, the governor’s power being discretionary “cannot be enforced as of right or by the order of Mandamus from the High Court or any other court of record”.

  1. High Risk: The Ajilo case demonstrates that banks are in peril when advances are made without first obtaining consent on securities offered by customers. This is due to the fact that mortgagors who failed to obtain consent to a mortgage deed could later rely on their initial error to claim that the mortgage deed was null and void due to lack of consent.

However, the law states that it is the responsibility of the mortgagors, not the mortgagees, to seek consent, and most of the time, the mortgagors are unconcerned about consent, let alone the regularity of the consent obtained. Thus, the recent Court of Appeal decision in Pharmatic Industrial Project Ltd is an example of how the Supreme Court allowed a mortgagor to profit from his own mistake.

The position imposes significant hardship on the mortgagee, who is now forced to inquire not only about consent but also about the regularity with which it is granted, is obtained by the mortgagor. The position that also makes land transactions a risky business most especially for the banking industries”.

  1. Impediment of Bureaucracy: The difficulty created by complex administrative procedures, coupled with the Governor’s undefined administrative discretion in granting consent or right of occupancy, resulted in many customers becoming frustrated, and countless plots of land that would otherwise be developed remained undeveloped. Thus, in emphasizing the difficult administrative process of obtaining consent, Nnamani J.S.C observed that:

“The applicant is subjected to the vagaries of bureaucratic act, which demands survey plans, documents and a lot of to and fro. These cumbersome procedures have adversely affected economic business activities and make industrial take off a matter very much in the future”.

  1. Conflicting Court Interpretations:

    One of the most fundamental issues with consent provision is this. When applying Section 22 of the Act, for example, courts have ruled in many cases that a lack of consent does not make a transaction illegal, while in others they have ruled otherwise.

Furthermore, in some cases, fraudulent mortgagors were not allowed to benefit from their own wrongdoing, but they have recently been allowed to do so. This is, in fact, a controversy that causes undue hardship for mortgagees who are easily duped by fraudulent mortgagors.

Thus, unless the courts, particularly the Supreme Court, carefully consider its previous decisions before passing judgment on the ones at hand, this problem will continue to aggravate people’s difficulties, eventually paralyzing land transactions in Nigeria.

When Governor’s Consent is Required

The governors’ consent is required when a holder of a statutory right of occupancy granted by the Governor, intends to alienate his right of occupancy or any part of it by Assignment, mortgage, transfer of possession, sublease or otherwise.

In such an instance, the consent of the Governor must be first had and obtained. This has been provided in Section 22 of the Land Use Act. In Awojugbagbe Light Industries Ltd v. Chinukwe, the court held that it is a common practice that before the Governor’s consent is sought, a form of tentative agreement for alienation of the property must have been entered into by the parties but such agreement is only inchoate and can only be completed when the governor finally approves or gives his consent. It also held that “a holder of statutory right of occupancy is not prohibited by section 22(1) of the Land Use Act from entering into a form of negotiation, which may end with an executed agreement for presentation to the governor for his necessary consent or approval”.

The Governor’s consent is however, not required in

  • An Equitable Mortgage: Section 22 (a) of the Land Use Act provides that

Governor’s consent shall not be required to the creation of a legal mortgage over a statutory right of occupancy in favor of a person in whose favor an equitable mortgage over the right of occupancy has already been created with the consent of the Governor”.

This section is problematic in that it exempts equitable mortgages from the series of transactions that require governor’s consent, while section 51 of the same Act defines “mortgage to include equitable mortgage. This is a serious conflict that misleads courts to give controversial judgments”.

In Okuneye v. F.B.N PLC, where the bone of contention was whether governors’ consent is necessary for an equitable mortgage. The court held that “a mere deposit of title deeds of property to secure a loan is not an alienation of the holders’ statutory right of occupancy by the definition under S. 22 of the Act, and therefore, governors’ consent is not required”.

This decision appears to have been reached per incuriam as no reference was made to S.51 of the Act where mortgage is comprehensively defined to include a second and subsequent mortgage and equitable mortgage as well.

So the Act unequivocally stipulates that any alienation made without governors’ consent is null and void notwithstanding the fact that the alienation is by assignment, mortgage, transfer of possession, sublease or otherwise.

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  • A Reconveyance or Release: Section 22 Paragraph (b) of the Act, provides that consent shall not be required to the reconveyance or release by a mortgagee to a holder or occupier of a statutory right of occupancy which that holder or occupier has mortgaged to that mortgagee with the consent of the Governor”.
  • An Up-stamping of Mortgages: Governors’ consent is not required in granting a new facility so long as consent had been obtained when the first mortgage was created.

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