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Owner Finance Contract for Nigeria

Owner Finance Contract Template for Nigeria

A comprehensive legal agreement governed by Nigerian law that facilitates a property purchase where the seller provides financing to the buyer instead of the buyer obtaining a traditional mortgage from a financial institution. This document combines elements of both a property sale agreement and a loan agreement, detailing the purchase price, down payment, financing terms, interest rates, payment schedule, and security arrangements. It includes specific provisions compliant with Nigerian property law, including Land Use Act requirements, and establishes the rights and obligations of both parties throughout the financing period until the final transfer of title.

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What is a Owner Finance Contract?

The Owner Finance Contract serves as a crucial alternative financing mechanism in the Nigerian property market, particularly valuable when traditional bank financing is either unavailable or undesirable. This document is typically used when a property owner is willing to act as a lender, allowing the buyer to make payments directly to them instead of a bank. The agreement must comply with Nigerian federal and state property laws, including the Land Use Act of 1978, and contains detailed terms about the property transfer, financing arrangements, security provisions, and payment obligations. It's particularly relevant in both residential and commercial property transactions where traditional mortgage financing isn't suitable. The document includes comprehensive provisions for protecting both parties' interests, ensuring clear title transfer procedures, and establishing remedies in case of default.

What sections should be included in a Owner Finance Contract?

1. Parties: Identification of the Property Owner/Seller (Financier) and the Buyer (Borrower), including full legal names, addresses, and contact information

2. Background: Context of the transaction, including property owner's willingness to sell and finance the property, and buyer's desire to purchase using owner financing

3. Definitions: Key terms used throughout the agreement including Property, Purchase Price, Down Payment, Finance Amount, Interest Rate, and Monthly Payments

4. Property Description: Detailed legal description of the property being sold, including address, boundaries, and registration details

5. Purchase Price and Financing Terms: Total purchase price, down payment amount, financed amount, interest rate, loan term, and payment schedule

6. Payment Terms: Detailed payment obligations including monthly payment amount, due dates, payment methods, and late payment penalties

7. Security Provisions: Details of the security interest in the property, including mortgage or charge registration requirements

8. Insurance and Maintenance: Buyer's obligations regarding property insurance and maintenance during the finance period

9. Default and Remedies: Events of default and seller's remedies, including acceleration of debt and foreclosure rights

10. Transfer of Title: Conditions for final transfer of title and process for deed registration

11. Representations and Warranties: Statements of fact and promises by both parties regarding their capacity and the property's condition

12. Governing Law and Jurisdiction: Specification of Nigerian law as governing law and jurisdiction for dispute resolution

What sections are optional to include in a Owner Finance Contract?

1. Early Payment Provisions: Terms for early payoff of the loan, including any prepayment penalties or discounts

2. Property Use Restrictions: Any restrictions on how the property may be used during the finance period

3. Assignment and Transfer: Terms governing whether the buyer can assign their rights or transfer the property during the finance period

4. Tax Responsibilities: Clarification of which party is responsible for various property-related taxes

5. Property Management: Additional terms regarding property management if the property is commercial or multi-unit

6. Construction and Improvements: Terms governing any construction or improvements during the finance period

7. Death or Incapacity Provisions: Procedures to follow in case of death or incapacity of either party

What schedules should be included in a Owner Finance Contract?

1. Schedule A - Property Details: Comprehensive property description, including maps, plans, and photographs

2. Schedule B - Payment Schedule: Detailed amortization schedule showing all payments, interest, and principal balance

3. Schedule C - Property Condition Report: Detailed report on the condition of the property at time of sale

4. Schedule D - Insurance Requirements: Specific insurance requirements including types and minimum coverage amounts

5. Appendix 1 - Property Documents: Copies of relevant property documents including title documents and surveys

6. Appendix 2 - Required Notices: Templates for required notices under the agreement

7. Appendix 3 - Payment Instructions: Detailed payment procedures and bank account information

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Nigeria

Publisher

Ƶ

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions













































Clauses






































Relevant Industries

Real Estate

Financial Services

Property Development

Construction

Housing

Commercial Property

Residential Property

Legal Services

Insurance

Banking

Relevant Teams

Legal

Real Estate

Finance

Compliance

Risk Management

Property Management

Contract Administration

Business Development

Operations

Corporate Affairs

Relevant Roles

Real Estate Manager

Property Developer

Legal Counsel

Property Lawyer

Financial Controller

Real Estate Agent

Property Valuer

Mortgage Specialist

Compliance Officer

Risk Manager

Contract Administrator

Property Manager

Chief Financial Officer

Real Estate Director

Legal Director

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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