Properties Pending Litigation

Investment in real estate is very lucrative as it yields interest. However, no matter how much interest it yields, there is also a big challenge to the enjoyment of the investment in cases where such property is a subject of litigation. To this end, it is important for a person to exercise care when he is approached to purchase property as a party who knows that he has a defective title may seek to sell the property to unsuspecting purchaser and abscond leaving the purchaser to contend for the title.

The rule is that the subject matter of a suit should not be transferred to a third party during the pendency of the suit. The principle is expressed in the Latin Maxim “Ut pendent nihil innovetur” which means that during litigation, nothing should be changed. Furthermore, this rule can also be referred to as the doctrine of Lis Pendes. Meaning that when a matter is in court over a property, nothing should be done on or concerning the property until the court dispenses of the matter. You must not sell, you must buy, you must not change the position of the property until the court dispenses of the matter.

The purpose of this doctrine is to put third parties on notice that there is an ongoing litigation over a property which could diminish its value or affect the interest of the party purchasing it. Buttressing this point is the decision of the court in the case of Akiboye v. Adeko(2011) 6 NWLR (pt 1244) 415 where the court held that the doctrine has evolved for the purpose of preventing one party from fraudulently seeking to overreach the decision of the court granting title to the opposing party on the basis that he has been divested of the title before the decision of the court was made.

To this end, if a third party chooses to purchase property that is the subject matter of litigation from one of the litigants during the pendency of the suit, he does so at his own peril. If it turns out that the person from whom he bought the land has no title, the purchase shall be set aside, irrespective of the merit. ((Oshinowo v. NBN Ltd(1998)11NWLR (pt 574)408)

 

For the doctrine of Lis Pendes to suffice, the following points must be proven:

  1. That there is a pending action at the time of the sale
  2. That the action is as regards a property- the principle has no application to chattels or choses in action.
  3. The object of the action must be to assert title to a specific real property.
  4. The vendor must be aware of the pendency of the suit
  5. The vendor must be vanquished in the suit
  6. It is of no moment that the purchaser had no actual or constructive knowledge of the pending suit.

In the case of Ogundiani v Araba (1978) NSCC 335 , a mortgagor granted an equitable mortgage to his bank but when he was called upon to execute a deed of legal mortgage over the property, he refused. The equitable mortgagee successfully sued him for an order for specific performance to execute a deed in accordance with his contract. While the mortgagors appeal against the judgment was pending, he sold and conveyed the property to the plaintiff .The mortgagee after succeeding in the appeal, sold the land to the defendant. The Supreme Court held that the plaintiff was a purchaser pendete lite and so had no title to the land.

It is important to note that the ignorance of the purchaser of a land lispendes goes to no issue as his title or interest in the said property is not stable and same shall be determined by the court. If judgment is given in favor of the vendor, the purchaser’s title is valid. However, if judgment is given against the vendor, the doctrine of lispendes shall apply and the sale shall be set aside.

In Alakija v Abdulai, it was held that the doctrine of lispendes applies to purchaser of any property subject to litigation and is not founded on the equitable doctrine of notice, actual or constructive, but upon the fact that the law does not allow litigants transfer title to land that is in dispute. A purchase pendete lite (Purchasing of land when in dispute in court) though without actual notice and for a valuable consideration will be set aside.

Furthermore, Niki Tobi J.S.C, delivering his judgment in the celebrated case of Matthew Enekwe v International Merchant Bank Nig Ltd(2006) 12 S.C 82, stated as follows

“…. The doctrine which is embedded in the common law principle of lispendes gives notice to persons by way of warning that a particular property is the res of litigation and that a person who acquires any interest in it must know well ahead that the interest will be subject to the decision of the court on the property. This reminds me of the fuller Latin expression, pendete lite nihil innovetur which means that during litigation, nothing new should be introduced. A person who buys real property in the course and pendency of litigation has bought litigation for himself and should be prepared to face litigation. In other words, the fortune or gains of the person in respect of the property will be dictated or determined by the result or outcome of litigation…”

Having stated the above, it is expedient for a purchaser to carry out due diligence before purchasing any property. It is also advisable to consult a legal practitioner to carry out the due diligence at the appropriate quarters in other to ensure that the property is free from any form of encumbrances. These encumbrances goes beyond cases in court. Just find out if there are problems to encounter on the land before acquiring.

Therefore to avoid having any form of trouble associated to, buying properties pending litigation or with disputes , you are advised to involve professionals who would carry out due diligence before any commitment is made. It is important to have a survey plan of the property and to conduct proper search in appropriate quarters such as land registry, probate registry if the property is subject to probate, court registry, banks, companies etc.

What we in Property Advisory Network have observed is that so many people tend to sell their properties pending litigation and others have so many other problems on their land and all they do is to sell and pass the problems to unsuspecting investors. This is predominant among Family land in Nigeria because these families capitalize on the ignorance of so many people  who just go buying land without involving professionals to do  proper due diligence on the land. It is a common story here in Lagos and other parts of Nigeria that so many people would buy land, do a lot of improvements on the land before they discover that the land is in dispute or that there are issues which are already in court.

The Property Advisory Network is here to advise you not to be a victim by involving professionals to conduct all manners of search to any potion of land or property anywhere in Nigeria. We are also here to assist you and give you all the details you need to have concerning any potion of land anywhere in Nigeria.

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