The “Econo-Legal” Implications of Mortgage of Right of Occupancy: A Hammer or an Illusion

The Land Use Act 1978 was intended to ensure citizens access to land in Nigeria by vesting ownership of all land within the territory of a State in the Federation on the Governor of that State. However, the interpretation and operation of this Act has generated controversies and difficulties with regards to citizens' rights of occupancy and ownership of lands in the country. These difficulties have created blockades for business in Nigeria, especially with regards to securitisation of credits from the financial institutions, and to a larger extent economic growth of the country. Under the Land Use Act 1978 all forms of ownership or title to land both under the common law and customary law have been abolished. It however confers a possessor occupier status to a holder of a right of occupancy on either land in rural or urban areas. However, only holders of statutory right of occupancy (on land in non-rural areas) can pass their interest on the land (not the land itself) to another person or institution. In other words, it is only a holder of a statutory right of occupancy that could enter into a mortgage agreement; those with customary right of occupancy over lands in the rural areas could not mortgage such lands more especially agricultural lands.