Deed of Equitable Mortgage (Nigeria)
DEED OF EQUITABLE MORTGAGE
Land Use Act 1978 | Conveyancing Act 1881 | Stamp Duties Act (Cap S8, LFN 2004)
THIS DEED OF EQUITABLE MORTGAGE is made this [Deed Date]
BETWEEN:
(1) [Mortgagor Name] of [Mortgagor Address] (hereinafter referred to as the "Mortgagor"); AND
(2) [Mortgagee Name] of [Mortgagee Address] (hereinafter referred to as the "Mortgagee").
RECITALS
A. The Mortgagor is the beneficial owner of the property known as [Property Description] ("the Property") situate in [State] State.
B. The Mortgagee has agreed to advance or has advanced the sum of [Loan Amount] ("the Principal") to the Mortgagor on the terms and conditions herein.
C. The Mortgagor has agreed to create an equitable mortgage over the Property in favour of the Mortgagee as security for repayment of the Principal together with interest thereon.
1. DEPOSIT OF TITLE DOCUMENTS AND EQUITABLE CHARGE
1.1 The Mortgagor hereby deposits with the Mortgagee the following title documents in respect of the Property: [Title Documents] (collectively "the Title Documents").
1.2 By this Deed, the Mortgagor equitably charges the Property with: (a) repayment of the Principal sum of [Loan Amount]; (b) payment of interest thereon at the rate of [Interest Rate]; and (c) all costs, charges, and expenses incurred by the Mortgagee in connection with this security.
1.3 The Mortgagor shall repay the Principal and all accrued interest in full on or before [Repayment Date] ("the Repayment Date").
2. MORTGAGOR'S COVENANTS
2.1 The Mortgagor covenants with the Mortgagee that the Mortgagor: (a) has a good and marketable title to the Property; (b) has not created and will not create any further charge or encumbrance over the Property without the prior written consent of the Mortgagee; (c) will maintain the Property in good repair and condition; (d) will pay all ground rents, rates, levies, and outgoings on the Property; and (e) will not alienate or transfer the Property without the prior written consent of the Mortgagee.
3. DEFAULT AND REMEDIES
3.1 Upon default by the Mortgagor in repayment of the Principal or interest by the Repayment Date, or upon breach of any covenant herein, the Mortgagee shall be entitled to: (a) apply to the State High Court or Federal High Court for an order for sale of the Property; (b) apply for the appointment of a receiver over the Property; (c) exercise all remedies available to an equitable mortgagee under Nigerian law and equity; and (d) retain the Title Documents until the secured debt is fully discharged.
3.2 The Mortgagor shall reimburse the Mortgagee for all legal costs and expenses incurred in enforcing this security.
4. LAND USE ACT 1978
4.1 The Parties acknowledge that the Property is held under a statutory right of occupancy subject to the Land Use Act 1978. The Mortgagor shall, at the request of the Mortgagee, apply for and obtain the Governor's Consent to this mortgage under Section 22 of the Land Use Act 1978.
5. GOVERNING LAW
5.1 This Deed is governed by the laws of Nigeria and the laws of [State] State. The courts of [State] State shall have jurisdiction over disputes arising from this Deed.
Mortgagor
________________
Signature
Mortgagee
________________
Signature
What Is a Deed of Equitable Mortgage (Nigeria)?
A Deed of Equitable Mortgage in Nigeria transfers an interest in property between the named parties and records the terms of that transfer.
The legal foundation for equitable mortgages in Nigeria derives from the principles of equity developed by the English courts of Chancery and adopted into Nigerian law through the received English law provisions of the various state laws of evidence and the High Court Laws. In states applying the Conveyancing Act 1881 (principally Lagos, Rivers, Oyo, and other southern states), the formal requirements for mortgages are set out in that Act, with equitable mortgages occupying a distinct position as security short of full legal conveyance. The Supreme Court of Nigeria recognised the validity and enforceability of equitable mortgages by deposit of title documents in UTC Nigeria Plc v Pamotei [1989] 2 NWLR (Pt 103) 244.
Because an equitable mortgage does not transfer legal title, it is generally of lower priority than a registered legal mortgage over the same property. Under the Land Use Act 1978, Section 22 requires governor's consent for any alienation or mortgage of a statutory right of occupancy. Nigerian courts, including in First Bank of Nigeria Plc v Kayode [2010], have held that an equitable mortgage by deposit of the C of O, without governor's consent, remains enforceable between the parties but may not be asserted against a bona fide purchaser for value without notice.
The Stamp Duties Act (Cap S8, LFN 2004) requires that a Deed of Equitable Mortgage be duly stamped. The applicable rate is 0.125% of the secured amount for debentures and instruments creating charges, assessed by the Federal Inland Revenue Service (FIRS) or the relevant state internal revenue service depending on the parties.
The legal framework governing the Deed of Equitable Mortgage (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 Equitable Mortgage (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, LFN 2004) sets the foundational requirements.
When Do You Need a Deed of Equitable Mortgage (Nigeria)?
A Deed of Equitable Mortgage is needed in Nigeria when a borrower wishes to use land or property as security for a loan or credit facility without undergoing the full process of a legal mortgage, which requires governor's consent and formal registration.
A Deed of Equitable Mortgage is required when a bank or finance house provides a short-term bridging loan or overdraft facility to a customer and takes the customer's Certificate of Occupancy as collateral security pending the completion of a formal legal mortgage. This is common in the Nigerian commercial banking sector.
A Deed of Equitable Mortgage is needed when a private lender advances money to a borrower and takes title documents as security, creating an equitable charge that is documented by a memorandum of deposit and deed to avoid any dispute about the nature of the security created.
A Deed of Equitable Mortgage is required when a company registered under CAMA 2020 creates a charge over its land assets as part of a debenture or composite security package, where the equitable mortgage forms one component of the overall security structure.
A Deed of Equitable Mortgage is needed when parties intend to create a security interest quickly — for example, to support completion of a commercial transaction — while the formal governor's consent process under Section 22 of the Land Use Act 1978 is ongoing. The deed records the security arrangement and protects the mortgagee's equitable interest in the interim.
Parties in Nigeria should prepare a Deed of Equitable Mortgage (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.
What to Include in Your Deed of Equitable Mortgage (Nigeria)
A Deed of Equitable Mortgage in Nigeria should include the following essential elements.
Parties: Full legal names, addresses, and descriptions of the mortgagor and mortgagee. Corporate parties must include their CAMA 2020 registration numbers and CAC-registered addresses.
Secured Amount: The principal loan amount in Nigerian Naira (NGN), the applicable interest rate (expressed as a percentage per annum), and the repayment schedule or maturity date.
Deposited Title Documents: A precise schedule of all title documents deposited with the mortgagee, including the Certificate of Occupancy number, survey plan number, and prior deeds. The schedule confirms that the mortgagor deposits these documents as security.
Property Description: Full description of the charged property including plot number, block, layout, local government area, and state. A SURCON-registered survey plan should be referenced.
Charging Clause: An express declaration that the mortgagor charges the property equitably with repayment of the secured amount and any accrued interest.
Remedies upon Default: The mortgagee's rights upon default including the right to apply to court for an order for sale, appointment of a receiver, or foreclosure under the Conveyancing Act 1881, Section 19.
Governor's Consent: Acknowledgement that governor's consent under Section 22 of the Land Use Act 1978 will be sought before any formal legal mortgage or sale of the property is completed.
Stamp Duty: The obligation to pay stamp duty under the Stamp Duties Act (Cap S8, LFN 2004).
Execution: Signatures of both parties and two witnesses per party, with corporate execution under CAMA 2020 Section 98.
Additional compliance elements for a Deed of Equitable Mortgage (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.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Deed of Equitable Mortgage (Nigeria) (Nigeria) [Legal document template]. Forms Legal. https://forms-legal.com/nigeria/real-estate/property/deed-of-equitable-mortgage-nigeria
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}Frequently Asked Questions
A Deed of Equitable Mortgage is generally enforceable in Nigeria between the parties, provided it meets the basic requirements of a valid contract under the Contracts Law applicable in the relevant state and the general law of equity. The Supreme Court in UTC Nigeria Plc v Pamotei [1989] 2 NWLR (Pt 103) 244 confirmed that an equitable mortgage by deposit of title documents creates a valid equitable charge. However, an equitable mortgage has limitations: it does not pass legal title to the mortgagee; it ranks below a registered legal mortgage in priority; and without governor's consent under Section 22 of the Land Use Act 1978, it cannot be converted to a legal mortgage or asserted against a third party who acquires the land without notice of the equitable charge. For enforcement upon default, the mortgagee must typically apply to the State High Court or Federal High Court for an order of foreclosure, sale, or appointment of a receiver, as the summary remedy of taking possession available to a legal mortgagee is not available to an equitable mortgagee.
In Nigeria, a legal mortgage involves the actual transfer of the legal estate in land from the mortgagor to the mortgagee as security, subject to defeasance upon repayment — that is, the mortgagor's right to have the estate re-transferred upon full payment. A legal mortgage under the Conveyancing Act 1881 (applicable in southern states) requires formal execution as a deed, governor's consent under Section 22 of the Land Use Act 1978, payment of stamp duty, and registration at the State Land Registry. An equitable mortgage, by contrast, does not transfer the legal estate. It arises from deposit of title documents and/or a written agreement to create a mortgage, without completion of all the formalities required for a legal mortgage. The consequences differ significantly: a legal mortgagee can exercise the statutory power of sale under Section 19 of the Conveyancing Act 1881 without court proceedings; an equitable mortgagee must generally go to court. A legal mortgage is also of higher priority against third parties.
Registration of a Deed of Equitable Mortgage in Nigeria is advisable but not universally mandatory for the instrument to have effect between the parties. However, registration significantly strengthens the mortgagee's position. In Lagos State, the Companies and Allied Matters Act 2020 (CAMA 2020), Sections 192–194, requires that charges created by a company — including equitable mortgages — be registered at the Corporate Affairs Commission (CAC) within 90 days of creation; failure to register means the charge is void against a liquidator and any creditor of the company. For state land registration purposes, equitable mortgages may be lodged as a caution or notice at the State Land Registry under the relevant land registration law (e.g., Lagos State Land Registration Law 2015) to give notice of the equitable interest to subsequent purchasers or mortgagees. Stamp duty under the Stamp Duties Act (Cap S8, LFN 2004) must be paid before or at time of execution regardless of registration.
Upon default by the mortgagor under a Deed of Equitable Mortgage in Nigeria, the mortgagee's primary remedies are: (1) application to the State High Court or Federal High Court for an order for judicial sale of the property, with proceeds applied first to the mortgagee's debt; (2) application for a court-appointed receiver to manage and recover income from the property; and (3) in appropriate cases, an action for foreclosure. Unlike a legal mortgagee under the Conveyancing Act 1881, an equitable mortgagee cannot exercise a power of sale without a court order unless the deed expressly grants an extrajudicial power of sale and the court permits its exercise. The mortgagee should first issue a formal demand letter specifying the amount outstanding and giving reasonable time to remedy the default — typically 21 to 30 days — before commencing court proceedings. The relevant limitation period for mortgage enforcement actions is 12 years from when the right to enforce arose under the Limitation Law of the applicable state.
The question of whether governor's consent under Section 22 of the Land Use Act 1978 is required for an equitable mortgage by deposit of title documents has been debated in Nigerian courts. The general position, as reflected in several Court of Appeal decisions, is that the deposit of title documents without more does not constitute an 'alienation' requiring governor's consent under Section 22 — the consent requirement is triggered when there is a formal transfer, assignment, or mortgage of the statutory right of occupancy. However, when the equitable mortgage is evidenced by a formal deed that creates an express charge or assigns an interest in the property, governor's consent may be required. To avoid this uncertainty, many Nigerian practitioners apply for governor's consent alongside the creation of the equitable mortgage, or include a condition in the deed that the charge becomes fully effective only upon receipt of consent. The safer approach for institutional lenders is to always obtain governor's consent.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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