Revisiting Conveyancing risks under the Legal Regime for Land Registration in Nigeria: A Case for Title Insurance

• Author: Akaayar Simon Viashima
• Position: Lecturer, Department of Commercial & Industrial Law, Faculty of Law, University of Lagos, Nigeria
• Pages: 186-203

ACTA UNIVERSITATIS DANUBIUS Vol. 13, no. 1/2017

186

Private Law

Revisiting Conveyancing risks under the

Legal Regime for Land Registration in

Nigeria: A Case for Title Insurance

Akaayar Simon VIASHIMA

1

Abstract: This research investigates the conveyancing risks which cannot be cured under the present

legal regime for land registration in Nigeria. Two fundamental issues motivated this study. The first is

that, in Nigeria, registration of title to land is mandatory and meant to assure certainty of registered

title amongst other reasons. However, it is settled law that registration of title per se cannot cure any

defect in the title or confer validity which it does not possess. This phenomenon not only exposed

registered title holders to hidden conveyancing risks, but also th reatened the effectiveness and public

trust in registration of title regime. The second problem is the lack of appropriate risk control

measures that are specifically designed for registered title holders in country. Consequently, this

paper evaluates the existing conveyancing risks in the particular context of the extant rules on land

registration. Although the paper commends legal efforts aim at strengthening land registration in

Nigeria, it demonstrates that there is enormity of conveying perils which largely defeats the b enefits

of registering title to land. In that regard, the study proposes the establishment of title insurance as

new commercial model that will be tailored for conveyancing risks control in the country. It

concludes that since insurance regulation is the exclusive preserve of the Federal government, the

National Insurance Commission should pioneer the reform suggested in this paper by invoking

section 101 of the Insurance Act 2003.

Keywords: Land registration; Conveyancing risks; Title insurance; Regulation; Nigeria

1. Introduction

The practice of registration of title to or interest in land, which remains the kernel

of modern conveyancing in Nigeria today, has its root from the colonial era. This is

largely because before the era of colonization, the area now known as Nigeria did

not exist as country, in the first place. In the second place, there was no

conveyancing law for the registration of instruments affecting land. However, the

1

Lecturer, Department of Commercial & Industrial Law, Faculty of Law, University of Lagos,

Nigeria, Address: Akoka, Lagos, Nigeria, Corresponding author: viashimas@gmail.com.

AUDJ, vol. 13, no. 1/2017, pp. 186-203

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British, through conquest, took over the various indigenous land practices and set

up English land administration, beginning with the compulsory Registration

Ordinance of 1883. Since then, the land registration law was continuously

reformed during the colonial era with several enactments such as Land Registry

Proclamations of 1900 and 1910 as well as Land Registration Ordinances of 1915

and 1924. After attainment of Nigeria’s independence in 1960, particularly with the

enactment of the Land Use Act of 1978, all land in the Nigeria become vested in

the Governor of each of the 36 States, except the Federal Capital Territory (FCT)

Abuja, which is under the control of the Government of the Federation. In that

regard, all the 36 States of the Federation have their respective Land Registration

Laws, with Lagos State leading with recent reform by enactment of Lagos State

Land Registration Law (LRL) 2015.

The central implications of these Land Registration Laws are to safeguard certainty

of title to land, guarantee priority of interests, and promote public confidence in

real property transactions amongst other connected matters (Smith, 2007). Above

all, the laws are meant to ensure that no encumbrances exist on land and that the

purchaser would enjoy quiet possession and use of the land (Umezulike, 2013, p.

371). Nevertheless, the fundamental problem is that no matter how ingenious land

registration law could be, there exist potential conveyancing risks, which land

registration per se, cannot cure. This position has long been rightly accepted by the

Supreme Court in Omosanya v. Anifowosho (1959) F.S.C. 94, where it was held

that registration of land per se cannot cure any existing defect or confer validity to

invalid title. Consequently, several nations has turned searchlight to other methods

of controlling the effect of conveyancing risks. From the perspective of insurance

as a risk control mechanism, therefore, one of the parallel models that have

globally evolved for the purpose of mitigating land conveyancing risks or damages

is “title insurance” (Gosdin, 2008; Pelkey, 1927, pp. 38-52). As will be seen in the

subsequent part of this article, the rationale for title insurance is multifaceted and

includes providing protection from real property loss such as: unknown title

defects, existing liens or encumbrances against the property title, errors in surveys

and public records, title fraud, and other title-related risks that can affect valid sell,

mortgage or lease of property in the future.

In fact, the central idea behind emergence of title insurance is the quest for

effective and efficient conveyancing practices, which land registration per se may

not achieve. This is largely because “title to land,” which is the subject matter of

land registration laws in Nigeria, is characterized as being permanent in nature, yet

with a unique history of transactions involving persons who at one time held

interests in it for divergent purposes (Arrunada, 2002, p. 582). These pre-existing