KEY INSTANCES WHERE THE SALE OF REAL ESTATE BY THE ADMINISTRATORS OF AN ESTATE WILL BE DECLARED INVALID BY THE COURT: A REVIEW OF THE SUPREME COURT’S DECISION IN EYIBOH -V- MUJADDADI (2022) 7 NWLR (PT. 1830) 381
Introduction
The law is clear that where a piece of real estate belongs to the estate of a deceased, all the administrators or executors of the estate must act in unison by authorizing the sale of the estate’s property before the transfer of the property can be valid. According to section 4 (2) of the Administration of Estate Law of Lagos State, no conveyance of real estate owned by an estate will be regarded as valid without the concurrence of the administrators of the estate or through an order of the Court.
Notwithstanding the position of the law stated above, there are instances where the transfer of property by the administrators of an estate will be regarded as being valid even if not all the administrators of the estate executed the transfer document or Deed of Assignment. An example of this type of situation is where all the administrators of an estate sign a resolution authorizing two administrators to handle and execute the transfer documents regarding the sale of the estate’s property.
In the recent decision of Eyiboh v. Mujaddadi (2022) 7 NWLR (Pt. 1830) 381, the Supreme Court of Nigeria addressed the validity of the sale of a property belonging to an estate by two out of the three administrators of an estate.
SUMMARY OF THE FACTS OF EYIBOH -V- MUJADDADI
The 1st to 3rd Respondents were administrators of the Estate of Late Sheikh Mujaddadi (“the estate”), and the estate owned a five-bedroom duplex with two rooms guest chalet and two rooms boys’ quarters in Garki, Abuja (“the property”). The 1st to 3rd Respondents made an offer to sell the property to the Appellant for the sum of N100,000,000.00 (One hundred million naira) with the condition that he would pay an agency commission of N5,000,000.00 (Five million naira) being 5% (Five per cent) of the consideration to one Jamilu Mujaddadi, a biological son of the deceased. After the offer was made to the Appellant, only the 1st and 2nd Respondents signed the Contract of Sale and Deed of Assignment (“the transaction documents”) conveying the property to the Appellant. However, the 3rd Respondent refused to sign the Contract of Sale and Deed of Assignment because the Appellant had not agreed to pay the agency commission of N5,000,000.00 (Five million naira).
Given the Appellant’s refusal to pay the agency commission, the 1st to 3rd Respondents sold the property to the 4th Respondent, who agreed to pay the purchase price of N100,000,000.00 (One hundred million naira) and the agency commission of N5,000,000.00 (Five million naira).
Immediately the Appellant became aware of the sale of the property to the 4th Respondent, he commenced a lawsuit at the High Court of the Federal Capital Territory against the 1st to 4th Respondents by which he sought an order of the Court upholding his Contract of Sale and Deed of Assignment as being valid. He also sought an order of specific performance mandating the 1st to 3rd Respondents to sign all the relevant transaction documents required to confer beneficial ownership of the property upon him.
The Appellant’s case at the trial Court was that he paid the purchase price of N100,000,000.00 (One hundred million naira) on the instruction of the agent, Jamilu Mujaddadi, to Magama Nigeria Limited and that the agent told him that the third administrator didn’t need to sign the Contract of Sale and the Deed of Assignment since two administrators had already signed the transaction documents. He also contended that the 1st to 3rd Respondents did not make the payment of the agency commission of 5% (Five per cent), a precondition for the sale of the property to him. After listening to his arguments, the trial Court dismissed the Appellant’s case on the grounds that the sale of the property to him was invalid since he didn’t provide any evidence of paying the purchase price to the administrators of the estate and since his Contract of Sale and Deed of Assignment were only signed by two out of the three administrators of the estate.
The Appellant appealed against the trial court’s decision to the Court of Appeal, and the Court of Appeal equally dismissed his appeal for lacking merit. He was further dissatisfied with the Court of Appeal’s decision and appealed to the Supreme Court.
Again, the Supreme Court dismissed his appeal and agreed with the trial court and Court of Appeal’s decision that the sale of the property to him was invalid because he failed to provide any evidence of paying the purchase price to the administrators of the estate and since his Contract of Sale and Deed of Assignment were only signed by two out of the three administrators of the estate. The Supreme Court further held that there would have been nothing wrong with only two administrators signing his transaction documents if he had been able to provide any documentary evidence showing that the three administrators had agreed to sell the property to him and authorized two administrators to execute the transaction documents on their behalf. On page 420, Paragraphs C-D, the Supreme Court, per Kekere-Ekun, JSC, held as follows:
“Having failed to prove concurrence between the three administrators, the Appellant failed to establish yet another element of a valid contract. He failed to prove that the 1st and 2nd Respondent had the capacity to contract and bind all the administrators in the agreements, exhibits A and B, allegedly entered into with him.”
TAKE AWAY FROM THE SUPREME COURT’S DECISION IN EYIBOH -V- MUJADDADI
From the Supreme Court’s decision, we can deduce the following:
- Only the administrators or executors of an estate have the lawful right to transfer the ownership of a property belonging to the estate to a third party.
- Only the administrators or executors of an estate have the power to receive the purchase price for the property from an interested purchaser.
- Purchasers of real estate must be wary of relying on the information provided to them by a beneficiary or child of the deceased regarding the sale of a property belonging to the estate.
- ALL the administrators must sign the transaction documents regarding the sale of a property by the administrators. However, where the transaction documents will only be signed by some administrators, the purchaser must ensure that they retrieve a Resolution signed by ALL the administrators authorizing the nominated administrators to sign the transaction documents on behalf of all the administrators.
- The mere fact that all the administrators of the estate did not sign a property transfer document will not automatically make the transfer invalid, provided that the purchaser can establish that all the administrators authorized the sale of the property to him.
- It is essential for purchasers of properties belonging to an estate to always confirm the identities of the administrators before concluding the purchase transaction.
- It is important for purchasers of properties belonging to an estate to always insist on paying the purchase price into the estate account. Where the administrators demand that the payment be made into another account, the purchaser must request a signed resolution by ALL the administrators authorizing the purchaser to pay the purchase price into the nominated account.
Please note that this article is for general information only. We do not offer it as advice on any particular matter, whether legal, procedural or otherwise. If you have questions about this article, please contact the author at foa@abdu-salaamabbasandco.com.
