Section 19 Mortgage and Property Law of Lagos State

Section 19 of the Mortgage and Property Law of Lagos State 2010 is about Realisation of a Right of Occupancy. It provides as follows:

(1) Where a Right of Occupancy has been mortgaged by the creation of a term of years absolute limited thereout or by a charge by way of legal mortgage or by statutory mortgage and the mortgagee sells under his statutory or express
powers of sale—

(a) the conveyance subject to the Governor’s consent, shall operate to vest in the purchaser the legal title in the land conveyed subject to any legal mortgage having priority to the mortgage in right of which the sale is made and to any money secure by it; and

(b) the mortgage term or the charge by way of legal mortgage or the charge by way of statutory mortgage and any subsequent mortgage term or charges shall merge or be extinguished with respect to the land conveyed and such sale or transfer may, as respects the legal title, be made in the name of the owner in whom it is vested.

(2) Where any such mortgagee obtains an order for foreclosure the order shall operate to vest the legal title in him (subject to the Governor’s consent
and any legal mortgage having priority to the mortgage in right of which the foreclosure is obtained and to any money secured by it), and then the
mortgage term, if any, shall be merged with the Right of Occupancy, and any subsequent mortgage term or charge by way of legal mortgage bound by the order shall be extinguished.

(3) Where any such mortgagee acquires a title under the Limitation Law, he or the person(s) deriving title under him, may enlarge the mortgage term into a right of occupancy under the statutory power for that purpose discharged from any legal
mortgage affected by the title so acquired, or in the case of a charge by way of legal mortgage may by deed declare that the right of occupancy in him is
discharged as foresaid, and the same shall best accordingly.

(4) Where the mortgage includes fixtures or personal chattels, any statutory power of sale and any right to foreclose or take possession shall extend to the absolute or other interest in it affected by the charge.

(5) In the case of a sub-mortgage b sub-demise of a long term (less a nominal period) itself limited out of a right of occupancy; the provisions of this section
shall operate as if the derivative term, if any, created by the sub-mortgage had been limited out of the right of occupancy, so as to enlarge the principal
term and extinguish the derivative term created by the sub-mortgage, and to enable the sub-mortgagee to convey the legal title or acquire it by foreclosure, enlargement, or otherwise as aforesaid.

(6) This section applies to a mortgage whether created before or after the commencement of this Law, and to a mortgage term created by this Law,
but does not operate to confer a better title to the legal estate than would have been acquired if the same had been conveyed by the mortgage (being a
valid mortgage) and the restrictions imposed by this Law in regard to the effect and creation of mortgages were not in force, and all prior mortgages (if any) not
being merely equitable charges had been created by demise or by charge by way of legal mortgage.

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