Deed of Sublease (Nigeria)

A Deed of Sublease in Nigeria formalises a transfer or grant of property interests, binding the parties to its recitals. It records the rental price, deposit, term, maintenance duties, and notice periods between landlord and tenant.

Under Nigerian property law, a sublease is subject to the terms and conditions of the head lease, and the sublessee takes the property subject to all obligations contained in the head lease. The lessee retains privity of contract with the head landlord and remains liable for all covenants in the head lease, including payment of rent. Under the Conveyancing Act 1881 (applicable in the southern states), a sublessee has an independent right of relief against forfeiture of the head lease where the lessee breaches the head lease covenants, as confirmed in several decisions of the Lagos State courts.

The creation of a sublease typically requires the head landlord's prior written consent under the head lease's alienation covenant. Under Section 22 of the Land Use Act 1978, the holder of a statutory right of occupancy must also obtain the governor's consent before subleasing the right of occupancy for any term. A sublease created without the required consents (head landlord's and governor's) may be void or voidable — the Lagos State Tenancy Law 2011 addresses certain aspects of residential subletting in Lagos.

Stamp duty on a Deed of Sublease is assessed on the same basis as a head lease under the Stamp Duties Act (Cap S8, LFN 2004), calculated on the rent reserved and the term. The Federal Inland Revenue Service (FIRS) assesses stamp duty for company parties; state internal revenue services assess it for individual parties.

The legal framework governing the Deed of Sublease (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a Deed of Sublease (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Land Use Act 1978 (Cap. L5) sets the foundational requirements.

A Deed of Sublease is needed in Nigeria whenever a tenant with a leasehold interest wishes to grant part or all of their premises to another occupier for a defined period shorter than their own lease.

A Deed of Sublease is required when a commercial tenant holding a five-year office lease in Lagos or Abuja no longer needs the entire office space and wishes to sublease a portion to another company, generating rental income while retaining their own right of occupation.

A Deed of Sublease is needed when a retail tenant holding a ground-floor commercial unit sublets a portion of that unit to a smaller retailer — for example, a pharmacy subletting a corner of its premises to a cosmetics retailer — for a term of one to two years.

A Deed of Sublease is required when a development company holding a long-term ground lease creates residential or commercial subleases in favour of individual occupiers of units built on the leased land. This structure is common in large Nigerian real estate developments in Lagos, Abuja, and Port Harcourt.

A Deed of Sublease is needed when an agricultural tenant holding a lease of farmland from the state government sublets portions of the land to smallholder farmers for short cultivation seasons, subject to any restrictions in the head lease or applicable agricultural land laws.

A Deed of Sublease is required when a company ceases to use part of its leased premises and wishes to sublet that part to recover some of the rent cost, subject to obtaining the head landlord's consent as required by the alienation covenant in the head lease.

Parties in Nigeria should prepare a Deed of Sublease (Nigeria) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

A Deed of Sublease in Nigeria should include the following essential elements.

Parties: Full legal names and addresses of the sublessor (head tenant) and sublessee. For corporate parties, include CAMA 2020 RC numbers.

Head Lease Reference: Identification of the head lease — date, parties, term, and demised premises — within which this sublease is granted, and confirmation that the sublessor is entitled to sublease.

Demised Premises: Precise description of the subleased premises, which may be part or all of the head lease premises. For part of a building, specify the floor, unit, or area.

Sublease Term: The commencement date and expiry date of the sublease. The sublease term must expire before the head lease term.

Rent: The sublease rent in NGN, payment schedule, and VAT obligations for commercial premises (7.5% under the Value Added Tax Act).

Sublessor's Obligations: To maintain the sublessee's quiet enjoyment and to comply with the head lease obligations so as not to trigger forfeiture of the head lease.

Sublessee's Obligations: To observe the same covenants as apply under the head lease; not to further sublease or assign without consent; to use the premises for the permitted purpose only.

Consents: Confirmation that the head landlord's written consent has been obtained, and that governor's consent under Section 22 of the Land Use Act 1978 has been or will be obtained.

Forfeiture: The sublessor's right to forfeit the sublease upon the sublessee's breach, mirroring the head lease provisions, and the sublessee's right to apply for relief against forfeiture under the equitable jurisdiction of the State High Court.

Stamp Duty: The Deed of Sublease must be stamped under the Stamp Duties Act (Cap S8 LFN 2004) before presentation at the State Land Registry. The Federal Inland Revenue Service (FIRS) assesses stamp duty for subleases where at least one party is a company registered with the Corporate Affairs Commission (CAC) under the Companies and Allied Matters Act 2020 (CAMA 2020). The stamp duty on a lease or sublease is calculated on the annual rent and the term of the sublease under the Stamp Duties Act Schedule.

Governor's Consent: Under Section 22 of the Land Use Act 1978 (Cap L5 LFN 2004), a sublease of a statutory right of occupancy for a term exceeding three years requires the prior written consent of the Governor of the state where the land is situated (or the FCT Minister for Abuja land). In Lagos State, governor's consent is administered through the Lagos State Lands Bureau. A sublease created without governor's consent where required is void under Section 22(2) of the Land Use Act 1978, as affirmed by the Supreme Court of Nigeria in Savannah Bank v Ajilo (1989) 1 NWLR (Pt 97) 305.

Land Registry Registration: The stamped and consented Deed of Sublease should be registered at the Lagos State Land Registry (under the Lagos State Land Registration Law 2015), AGIS for FCT land, or the relevant State Lands Registry to give notice to third parties and protect the sublessee's interest. An unregistered sublease may be void against a purchaser or subsequent mortgagee who acquires the property without notice of the sublease.

VAT on Commercial Rent: Under the Value Added Tax Act 2004 (as amended by Finance Act 2019), commercial rent charged under a sublease is subject to VAT at 7.5%, administered by FIRS. The sublessor must include VAT in the rent invoice and remit collected VAT to FIRS on a monthly basis.

Additional compliance elements for a Deed of Sublease (Nigeria) used in Nigeria include: Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.