Sublease Agreement (Nigeria)

A Sublease Agreement in Nigeria sets out the rights, duties and consideration binding the parties to it.

Under the Land Use Act 1978, Section 22, no holder of a statutory right of occupancy may sublet, sublease, or otherwise part with possession of any part of the land without the prior consent of the governor of the state in which the land is situated. This governor's consent requirement extends to subleases in the same way it applies to assignments and mortgages. A sublease executed without the required governor's consent is void ab initio — without legal effect between the parties and against third parties — as the Supreme Court of Nigeria confirmed in Savannah Bank of Nigeria Ltd v Ajilo [1989] 1 NWLR (Pt 97) 305.

In addition to governor's consent, most head leases contain an express covenant against subletting without the head landlord's written consent. Such an alienation covenant is enforceable under the Conveyancing Act 1881, Section 44, which implies in every lease a condition against underletting without consent. Breach of this covenant by the tenant entitles the head landlord to forfeit the head lease and thereby extinguish the subtenant's interest.

A Sublease Agreement must be carefully drafted to confirm that it does not inadvertently create a term exceeding the head lease term (which would be a void overreaching purported grant) and that the subtenant's obligations mirror and are consistent with the tenant's obligations under the head lease, particularly in relation to permitted use, alterations, and repair obligations.

The legal framework governing the Sublease Agreement (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 Sublease Agreement (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 Sublease Agreement is required in Nigeria in several property and commercial contexts.

A Sublease Agreement is required when a corporate tenant that has leased large commercial office premises in Lagos, Abuja, or Port Harcourt wishes to sublet a portion of those premises to another company — for example, where a company has reduced its headcount and has surplus floor space — while retaining its original lease and direct obligations to the head landlord.

A Sublease Agreement is needed when a retail tenant in a shopping mall or market complex holds a master lease over multiple shops or stalls and wishes to sublease individual units to smaller retailers, creating a sublease relationship while the original tenant remains the head tenant under the master lease.

A Sublease Agreement is required when a residential tenant with a long-term tenancy — for example, a three-year tenancy of a house in a Lagos estate — temporarily relocates for work or family reasons and wishes to sublet the property to a subtenant during their absence, subject to the head landlord's consent and the terms of the original tenancy agreement.

A Sublease Agreement is needed when a company holding an oil services or industrial facility lease under a long-term agreement with a state government or private landlord wishes to sublet a portion of the facility to a related entity, joint venture partner, or third-party service provider operating from the same facility.

A Sublease Agreement is required when a government agency or parastatal that holds a statutory right of occupancy over a large parcel of land grants a sublease to a private operator to develop and manage a portion of the land for commercial, industrial, or agricultural purposes under a Public-Private Partnership (PPP) arrangement under the Infrastructure Concession Regulatory Commission (ICRC) Act 2005.

Parties in Nigeria should prepare a Sublease Agreement (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 valid Sublease Agreement in Nigeria must contain the following essential elements.

Parties: Full legal names, addresses, and (for corporate parties) CAC RC numbers under the Companies and Allied Matters Act 2020 of the sublessor (the tenant under the head lease who is granting the sublease) and the subtenant. The sublessor must confirm their capacity to sublease — i.e., that the head lease has not expired and that the necessary consents have been or will be obtained.

Property Description: A precise description of the subleased premises, including the portion of the head lease property being sublet (if not the whole), the address, title reference (Certificate of Occupancy number or head lease reference under the Land Use Act 1978), local government area, and state. A floor plan showing the demised area should be attached where the sublease covers part of a larger building.

Head Lease Details: Reference to the head lease — including the head landlord's name, head lease date, and lease term — and confirmation that the head lease is currently subsisting. The subtenant should be made aware of the head lease conditions that bind them indirectly through the sublease.

Sublease Term and Rent: The commencement date and expiry date of the sublease (which must not extend beyond the head lease expiry date), the sublease rent in Nigerian Naira (NGN) payable by the subtenant to the sublessor, the payment frequency (monthly, quarterly, or annually), and any rent review provisions.

Consents: Confirmation that the head landlord's written consent to the sublease has been obtained (or a condition precedent that it must be obtained before the sublease commences), and that governor's consent under Section 22 of the Land Use Act 1978 has been applied for or obtained. The subtenant should receive copies of all consent letters.

Obligations and Restrictions: The subtenant's obligations to observe and perform the terms of the head lease as applicable to the subleased premises, restrictions on use (matching the head lease permitted use), obligations regarding repair and maintenance, and the consequences of breach including the head landlord's right to forfeit the head lease and the sublessor's corresponding right to terminate the sublease.

Stamp Duty and Registration: The obligation on the subtenant (or as agreed between the parties) to pay stamp duty under the Stamp Duties Act (Cap S8, LFN 2004) and to register the sublease at the relevant State Land Registry within the prescribed period.

Additional compliance elements for a Sublease Agreement (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.