Thank you for great support to all readers on legal matters.
We have land that my husband bought just before we got married. Two months after marriage, he was retrenched.
He had only paid the loan for three months, that means even a quarter of the amount had not been paid.
He and his colleagues sued their employer and the case is still ongoing. He had promised to use the cash they will get as compensation to pay the bank. At the same time, he started building on the land. The house was never completed.
Now, he wants me to finish the construction, which I have no problem with, but I find myself lost on the following issues:
1)He never cleared the bank loan which has accrued to millions now, can the bank auction the land?
2)He only has a land sale agreement with the seller as efforts to get him process the title have gone futile. His reasoning is that the bank can auction the land if the title is in his name.
3) With no title, what support document can I obtain to make sure I am a legal beneficiary of the property if am to put my money in?
No one would wish to be in your position and many of us are vulnerable for as long as we are employed.
The situation is unfortunate and disheartening. You deserve empathy.
As a couple you intended to acquire land and construct a house. The unexpected happened when he lost his employment.
Nonetheless, if we assume that the loan by your husband was supported by his salary, then the impending scenario which could happen to anyone, requires us to consider the following:
a) the principle of privity of contract
b) legal weight of a sale of land agreement, and
c) ultimate ownership of any parcel of land or property.
Issue one: Privity of contract has a dictate that only parties to a contract can perform the obligations within it.
Therefore, the contract between the bank and your husband was pegged on consideration that, a certain amount of money from your husband's salary would on monthly basis go towards repayment of the loan.
As such, auction is an independent process and a ‘stranger’ to the transaction contained in and which formed the contract.
To elaborate, you may need to know that unsecured loans are primarily pegged on salaries whereas secured loans are pegged on specific property. Our assumption is that your situation falls under the former.
Issue two is whether the sale of land agreement is sufficient to transfer full ownership of interest in land.
Legally, sale of land agreement gives rise to equitable interest conferring trust in the property to the purchaser pending completion of the transaction.
Essentially, the purchaser acquires equitable ownership even though (full) legal title to the land will not pass until completion and (registration).
On the third issue, legal ownership of any parcel of land or property takes effect when the transfer of title has been given and documentation in the name of title deed corresponds with those at the ministry of land or relevant lands office.
However, for you to fully realise any benefits, limited or otherwise from the land as described, including development, you will need to ensure the seller of the land performs obligations of the contract which includes transfer and registration of the same.
For your security, you may need to have a side discussion with your husband to have the land jointly registered in his and your name.
Be that as it may, this advisory is not conclusive. It is advisable to seek alternative legal opinion where the content and context that formed the two contracts which your husband entered into are taken into consideration.