LAGOS (CU)_Last week, Toke Benson-Awoyinka, the special advisor on housing to the Governor of Lagos State Governor, Babajide Sanwo-Olu, joined a roundtable on the proposed amendment of the state Mortgage and Property Law. During the discussion, which focused on some key areas for consideration, the participants highlighted the need to encourage growth in the real estate sector and to support the property realisation in the state by regulating consumer loans.
“The areas of concentration include the speedy perfection of mortgage title, Strata titles, sale by auction, remedy for wrongful sale, introduction of provision for foreclosure, amongst others, which have been incorporated into the bill,” Benson-Awoyinka said. She also noted that the proposed amendment bill will include sale by public auction and the voluntary surrender of mortgage property in lieu of foreclosure.
According to the special adviser, the purpose of the amendment is to create certainty in mortgage dealings and to protect the interest of the mortgagor, particularly in the foreclosure proceedings in court. Accordingly, the amendment considers the possibility of a mortgaged property, once foreclosed, to be a sold at a price higher than the amount owed. Subsequently, the surplus amount will be settled to the mortgagor, Benson-Awoyinka explained.
However, Nigeria Mortgage Refinance Company’s Chief Executive and Managing Director Kehinde Ogundimu shared opposing views, claiming that this area of the proposed amendment should be entirely deleted. “We are generally fine with majority of the amendments except Section 39(8) which provides that: ‘where mortgage property is sold at a higher price than the amount owed, the excess or surplus money accruing from the foreclosure sale shall be due the mortgagor,” he said. According to Ogundimu, NMRC’s position is that the mortgagee should not owe such a duty to the mortgagor, since a foreclosure presumes that the property is vested in the mortgagee.
Nevertheless, some experts are of the view that this position would enable mortgagees to abuse the foreclosure clause, and hence, the interests of the mortgagor might not be protected by the bill as emphasised by Benson-Awoyinka.
