Section 20 Mortgage and Property Law of Lagos State

Section 20 of the Mortgage and Property Law of Lagos State 2010 is about Realisation of leasehold mortgages. It provides as follows:

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

(a) conveyance by him shall, subject to Governor’s consent, operate to convey to the purchaser not only the mortgage term, if any, but also (unless expressly exempted with the leave of the court) the leasehold reversion affected by the mortgage, subject to any legal mortgage having priority to the mortgage in
right of occupancy which the sale is made and to any money thereby secured; and

(b) mortgage term, or the charge by way of legal mortgage and any subsequent mortgage term or charge, shall merge in such leasehold reversion or be extinguished unless exempted as aforesaid, and such conveyance may, in respects of the leasehold reversion, be made in the name of te estate owner in whom it is vested. Where a licence to assign is required on a sale by a mortgagee, such licence shall not be unreasonably refused.

(2) Where any such mortgagee obtains an order for foreclosure, the order shall, unless it otherwise provides, operate (without giving rise to a forfeiture for want of a licence to assign) to vest the leasehold reversion affected by the mortgage and any
subsequent mortgage term in him, subject to any legal mortgage having priority to the mortgage in right of which foreclosure is obtained and to any money secured by it, and the mortgage term and any subsequent mortgage term or charge by way of legal mortgage bound by the order shall, subject to any express provision to the contrary contained in the order, merge in such leasehold reversion or be extinguished.

(3) Where any such mortgagee acquires a title under the Limitation Law, he or the persons deriving title under him, may be deed declare that the leasehold reversion affected by the mortgage and any mortgage term affected by the title so acquired
shall vest in him, free from any right of redemption which is barred, and the same shall (without giving rise to a forfeiture for want of a licence to assign) vest accordingly, and thereupon the mortgage term, if any, and any other mortgage term or charge by way of legal mortgage affected by the title so acquired shall, subject to any express provision to the contrary contained in the deed, merge in such
leasehold reversion or be extinguished.

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

(5) In the case of sub-mortgage by sub-demise of a term (less a nominal period itself limited out of a leasehold reversion, the foregoing provisions of this
section shall operate as if the derivative term created by the sub-mortgage had been limited out of the leasehold reversion, and so as (subject as aforesaid) to merge the principal mortgage term as well as the derivative term created by the sub-mortgage and to enable the sub-mortgagee to convey the leasehold reversion or acquire it by foreclosure, vesting, or otherwise as aforesaid.

(6) This section takes effect without prejudice to any encumbrance or trust affecting the leasehold reversion which has priority over the mortgage right of which the sale, foreclosure, or title is made or acquired, and applies to a mortgage whether execute
d before or after the commencement of this Law, and to a mortgage term created by this Law, ut does not apply where the mortgage term does not comprise the whole of tile land included in the leasehold reversion unless the rent (if any) payable in respect of that reversion has been apportioned in respect of the land affected or the rent is of no monetary value or no rent is reserved, and unless the lessee’s
covenants and conditions (if any) have been apportioned, either expressly or by implication, as respects the land affected.

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