Deed of Priority (Nigeria)
DEED OF PRIORITY
Land Use Act 1978 | Conveyancing Act 1881 | CAMA 2020 | Stamp Duties Act (Cap S8, LFN 2004)
THIS DEED OF PRIORITY is made this [Deed Date]
BETWEEN:
(1) [Senior Creditor Name] of [Senior Creditor Address] ("the Senior Creditor");
(2) [Junior Creditor Name] of [Junior Creditor Address] ("the Junior Creditor"); AND
(3) [Mortgagor Name] of [Mortgagor Address] ("the Mortgagor").
RECITALS
A. The Senior Creditor holds a security interest over the Property ([Property Description]) pursuant to [Senior Security Reference], securing a debt of [Senior Debt Amount].
B. The Junior Creditor holds or intends to hold a security interest over the same Property pursuant to [Junior Security Reference], securing a debt of [Junior Debt Amount].
C. The Parties have agreed to regulate the priority of their respective security interests as set out in this Deed.
NOW THIS DEED WITNESSETH as follows:
1. PRIORITY RANKING
1.1 The Parties agree that, notwithstanding the dates of creation or registration of their respective security interests, the priority of their security interests over the Property shall be as follows: (a) FIRST: The Senior Creditor's security interest securing up to [Senior Debt Amount] plus interest and costs; (b) SECOND: The Junior Creditor's security interest securing up to [Junior Debt Amount] plus interest and costs.
1.2 This priority ranking shall apply for all purposes, including upon any enforcement, sale, or realisation of the Property.
2. ENFORCEMENT RESTRICTIONS
2.1 The Junior Creditor undertakes not to take any enforcement action in respect of the Junior Security without first giving the Senior Creditor written notice and allowing a standstill period of [Standstill Period], during which the Senior Creditor may take its own enforcement action.
2.2 If the Senior Creditor takes enforcement action, the Junior Creditor shall cooperate and shall not impede the Senior Creditor's exercise of its enforcement rights.
3. PROCEEDS WATERFALL
3.1 Proceeds of any enforcement or sale of the Property shall be applied in the following order: FIRST, to reimburse the costs and expenses of enforcement; SECOND, to discharge all amounts outstanding to the Senior Creditor; THIRD, to discharge all amounts outstanding to the Junior Creditor; and FOURTH, any surplus to the Mortgagor.
4. GOVERNING LAW
4.1 This Deed is governed by the laws of Nigeria and [State] State. The courts of [State] State shall have jurisdiction.
Senior Creditor
________________
Signature
Junior Creditor
________________
Signature
Mortgagor
________________
Signature
What Is a Deed of Priority (Nigeria)?
A Deed of Priority in Nigeria formalises a transfer or grant of property interests, binding the parties to its recitals.
The need for Deeds of Priority arises most frequently in syndicated lending transactions, construction finance, project finance, and real estate transactions involving multiple lenders. In a typical structure, a senior lender — such as a major commercial bank — agrees to advance a substantial facility on the condition that any other secured creditor (for example, a mezzanine lender, a bond trustee, or a related-party lender) expressly subordinates their security interest to the senior lender's charge.
Under Nigerian property law, the priority of mortgages and charges over land is governed by the registration system at the State Land Registry. Under the Lagos State Land Registration Law 2015 and equivalent laws in other states, the order of registration generally determines priority as between competing registered interests. Unregistered interests rank behind registered interests where the holder of the registered interest had no notice of the unregistered interest at the time of registration. The deed of priority contractually binds all parties to respect the agreed ranking regardless of the order of registration.
For charges over company property registered at the Corporate Affairs Commission (CAC) under Sections 192–194 of CAMA 2020, inter-creditor priority arrangements are particularly important in structured finance transactions. The CAC registers charges in the order they are presented, and the Deed of Priority supplements the CAC registration by providing contractual certainty on enforcement mechanics and waterfall arrangements.
The legal framework governing the Deed of Priority (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 Priority (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 Priority (Nigeria)?
A Deed of Priority is needed in Nigeria whenever two or more secured creditors hold or intend to hold security over the same property or asset and need to contractually agree on the ranking and enforcement rights of their respective securities.
A Deed of Priority is required in syndicated bank lending transactions where a Nigerian company has a primary relationship bank providing a revolving credit facility and a secondary lender providing a term loan — both secured by a legal mortgage over the same property. The deed confirms the primary lender's security ranks first.
A Deed of Priority is needed in real estate development finance where a developer has borrowed from both a commercial bank and a related-party lender (such as a parent company or shareholder) to fund a construction project. The bank requires the related-party lender's charge to be subordinated to the bank's first mortgage.
A Deed of Priority is required in project finance transactions — such as large-scale oil and gas, power generation, or infrastructure projects — where multiple international and domestic lenders provide facilities on different commercial terms and need contractual certainty on priority, enforcement, and distribution of proceeds upon realisation of security.
A Deed of Priority is needed when a Nigerian company has issued both senior secured bonds and mezzanine notes, with the mezzanine noteholders agreeing to subordinate their charge in favour of the senior bondholders under a Deed of Priority and inter-creditor agreement.
A Deed of Priority is used when a first mortgagee agrees to allow a second mortgagee to rank ahead of them — for example, where the second mortgagee is providing development funding that will increase the property's value and benefit the first mortgagee — formalising the agreed ranking change.
Parties in Nigeria should prepare a Deed of Priority (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 Priority (Nigeria)
A Deed of Priority in Nigeria should include the following essential elements.
Parties: Full legal names and addresses of all mortgagees/chargeholders who are parties to the priority arrangement, and in some cases the mortgagor/chargor. For institutional lenders regulated by the Central Bank of Nigeria (CBN), include CBN licence numbers. For companies, include Corporate Affairs Commission (CAC) RC numbers under the Companies and Allied Matters Act 2020 (CAMA 2020).
Description of Security Interests: Precise identification of each party's security interest — the deed, date, registered number at the State Land Registry (for example, the Lagos State Land Registry under the Lagos State Land Registration Law 2015, or the Abuja Geographic Information Systems — AGIS — for FCT properties), and/or CAC charge registration number under Sections 192–194 of CAMA 2020.
Property/Asset Description: Complete description of the property or assets over which the competing security interests subsist, including the Certificate of Occupancy (C of O) number, the state in which the land is situated, and the Right of Occupancy reference under Section 9 of the Land Use Act 1978 (Cap. L5, LFN 2004).
Priority Ranking: A clear and unambiguous statement of the agreed priority ranking — which security ranks first, which ranks second, and so on. Often expressed as 'Senior Security' and 'Junior Security'. The ranking overrides the default first-in-time rule applied by the Federal High Court and state High Courts in priority disputes.
Enforcement Restrictions: Restrictions on the junior creditor's right to enforce their security without the senior creditor's consent or without first allowing a standstill period. The Arbitration and Conciliation Act (Cap A18 LFN 2004) provides an alternative dispute resolution mechanism frequently invoked in inter-creditor disputes before formal enforcement.
Proceeds Waterfall: The order in which proceeds of any enforcement sale or realisation of the security will be distributed — typically, senior creditor first, then junior creditor(s), then any surplus to the mortgagor. This waterfall provision is the commercial core of the deed.
Standstill Provisions: Defined periods during which the junior creditor agrees not to take enforcement action, giving the senior creditor time to realise security or renegotiate with the mortgagor. Standard standstill periods in Nigerian structured finance transactions range from 90 to 180 days.
Subordination of Claims: Whether the junior creditor's underlying debt claim (not just their security ranking) is also subordinated to the senior creditor's debt claim — particularly important in insolvency proceedings before the Federal High Court.
CAC and Land Registry Notation: Provisions for noting the priority arrangement at the Corporate Affairs Commission (CAC) charges register and at the relevant State Land Registry, giving constructive notice to subsequent creditors and bona fide purchasers.
Stamp Duty: The Deed of Priority must be stamped under the Stamp Duties Act (Cap S8 LFN 2004) by the Federal Inland Revenue Service (FIRS) before it can be admitted in evidence. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) govern processing of personal data of individual mortgagors. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation under the Land Use Act 1978 (Cap. L5, LFN 2004) and CAMA 2020.
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Forms Legal. (2026). Deed of Priority (Nigeria) (Nigeria) [Legal document template]. Forms Legal. https://forms-legal.com/nigeria/real-estate/property/deeds-of-priority-nigeria
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author = {{Forms Legal}},
title = {Deed of Priority (Nigeria) (Nigeria)},
year = {2026},
howpublished = {\url{https://forms-legal.com/nigeria/real-estate/property/deeds-of-priority-nigeria}},
note = {Free legal document template. Based on Land Use Act 1978 (Cap. L5, LFN 2004)}
}Frequently Asked Questions
A Deed of Priority is important in Nigerian lending transactions because without a contractual priority agreement, the ranking of competing security interests is determined by the default rules of Nigerian property law and registration. Under the Lagos State Land Registration Law 2015 and its equivalents, registration at the State Land Registry generally determines priority — the first-registered charge ranks ahead of later-registered charges. However, registration timing can be uncertain in practice, and different charges may be registered at different registries (State Land Registry and CAC). A Deed of Priority provides contractual certainty on the agreed ranking, enforcement rights, and distribution of proceeds, regardless of registration order. For major commercial lenders in Nigeria — including Access Bank, Zenith Bank, First Bank, and international institutions — a Deed of Priority is a standard document in any transaction involving multiple secured creditors over the same property. It also provides a mechanism for controlling junior creditor enforcement, preventing a junior creditor from triggering enforcement that could prejudice the senior creditor's recovery.
Yes. A first mortgagee in Nigeria can contractually agree — by executing a Deed of Priority — to allow a subsequent mortgagee to rank ahead of them (a 'tacking' or 'postponement' arrangement). This is sometimes called a 'priority reversal' or 'deed of postponement'. Such an arrangement is commercially unusual but may occur where the first mortgagee's loan is small and fully secured, and the second mortgagee is providing substantially larger development funding that will benefit both creditors by increasing the property's value. The deed of priority binds the first mortgagee to allow the second mortgagee to recover from enforcement proceeds before the first mortgagee. The arrangement must be documented precisely to be effective, and the mortgagor must consent (since the priority arrangement affects their obligations and rights). Additionally, the arrangement should be noted at the State Land Registry and, for company charges, at the CAC, to give notice to subsequent creditors of the non-standard priority structure.
A Deed of Priority itself does not need to be registered as a standalone instrument at the State Land Registry or the CAC in the same way as the underlying mortgage deeds. However, it is strongly advisable to note the priority arrangement at both the relevant State Land Registry and the CAC (for company charges). At the State Land Registry, the parties may lodge a notice or memorandum noting the priority deed alongside the registered mortgage instruments, giving constructive notice to any subsequent searcher of the agreed priority structure. At the CAC, where charges are registered under Sections 192–194 of CAMA 2020, the parties may annotate the charge registration to reference the Deed of Priority. Without such notation, a subsequent creditor who searches the registry records may not be aware of the priority arrangement and could acquire a competing interest without notice of the priority structure. The Deed of Priority itself must be stamped under the Stamp Duties Act (Cap S8, LFN 2004) before it can be admitted in evidence.
A Deed of Priority (Nigeria) does not legally require a lawyer in Nigeria, and individuals and businesses may draft and execute the document independently. The Land Use Act 1978 (Cap. L5, LFN 2004) does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified Nigeria lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The Supreme Court of Nigeria has jurisdiction over disputes arising from this type of document, and Corporate Affairs Commission (CAC) may impose additional compliance obligations depending on the nature of the underlying transaction. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.
Insolvency significantly tests the effectiveness of a Deed of Priority in Nigeria, and parties should carefully draft the deed to address insolvency scenarios. When a company mortgagor enters liquidation or receivership under Part F of the Companies and Allied Matters Act 2020 (CAMA 2020), the appointed liquidator or receiver (who may be a licensed insolvency practitioner regulated by the Corporate Affairs Commission (CAC)) is bound by valid security interests and priority arrangements that were properly constituted and registered before the commencement of insolvency proceedings. A Deed of Priority that was executed and noted at the CAC charges register under Sections 192–194 of CAMA 2020 before the insolvency date is enforceable by the senior creditor against the liquidator. However, security created within 90 days before winding-up, or within two years before winding-up for transactions with connected parties, may be challenged as a voidable preference or transaction at an undervalue under Sections 572–578 of CAMA 2020. In the Federal High Court proceedings that typically govern corporate insolvency in Nigeria, the judge will examine whether the Deed of Priority was entered into at arm's length, for genuine commercial consideration, and without intent to defraud other creditors. The Securities and Exchange Commission (SEC Nigeria) may also be involved where the insolvent company is publicly listed on the Nigerian Exchange (NGX). Parties to a Deed of Priority in used transactions should therefore obtain a legal opinion on insolvency robustness from a Nigerian Bar Association-enrolled solicitor with insolvency expertise before signing.
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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