In 1999, one Femi, a landowner, sold five plots of land in Lekki Phase 1 to one Mayowa, an investor, for 15 million Naira with an outstanding balance of 10 million Naira due after twelve months. Possession was delivered to Investor Mayowa. He commenced developing one plot. Despite Femi’s repeated demands for the balance, for over a year, Mayowa did not pay.

One of the unsold plots was sold to Nnamdi in 2002 by Femi, who went into possession. Upon the realization of this fact, Mayowa paid the remaining 10 million Naira in 2003 but was given a Deed of Assignment for only four plots. Mayowa filed a suit, claiming title over the plot sold to Nnamdi, damages for trespass, and an injunction.

The High Court and Court of Appeal dismissed the claims by Mayowa. Not one to be defeated, Mayowa appealed to the Supreme Court, which also dismissed his appeal. The Supreme Court held, reaffirming the principle that “where the purchase price is not fully paid, the purchaser does not have a right to compel the vendor to transfer ownership or title of the land.”

This case, adapted from the landmark decision of the Supreme Court of Nigeria in the celebrated case of Odusoga v. Ricketts (1997), is an important illustration of how an agreement for the payment of purchase price by installment in a real estate transaction can give rise to conflicting claims, if not well managed.

Investor Mayowa had misunderstood his standing in law. He forgot that a purchaser can only have title to a property upon full payment. It is only upon full payment of the purchase price and other stipulated conditions that a right to ownership may accrue to a purchaser under Nigerian law. A vendor, on its part, is obliged to release title upon full payment.

If the case is that of buyers of property on installment payments, unless the balance of obligations paid after installment payments, the vendor may not deliver the possession. Normally one has to pay fees after the final installment are paid including but not limited to documentation fees, development charges or any such fee provided in the contract.

If a buyer does not pay the balance within such time, then he is considered in default. The vendor may consider his contract of sale as cancelled and sell the same property to another buyer even if the initial buyer has paid a deposit in a partial payment.

If a buyer anticipates an issue with the ability to pay in due time, it is possible to negotiate an extension. An extension is solely a decision of a vendor and may imply extra bureaucracy like penalty fees or an increase in the buying price.

As long as the seller has received a partial payment, he must return it in case of default unless such a condition explicitly states the opposite in writing. Any contract that stipulates specific terms for its termination binds both parties to such conditions.

To avoid some of these pitfalls regarding the purchase of property on an installment plan, here are some steps one can take:

2. Read and fully comprehend all conditions and terms.

3. The contract should be in writing.

4. Apply the terms of the contract.

5. Obtain a receipt for each payment you make.

6. Dedicate immediate attention to payment problems.

7. Look for other alternative dispute resolution methods before heading to court.

Installment buying of property is a good deal for the buyer who does not have all the cash at hand. The buyers must, however fully understand an installment sale contract and seek a Lawyers advice before signing to avoid the adverse conditions that may lead to expensive legal battles. The evident terms of the agreement and performance of all duties will help one to steer away from court cases that involve much money and time consumption.