AN APPRAISAL OF MORTGAGE OF LANDED PROPERTY AS SECURITY FOR LOAN FROM BANKS IN NIGERIA
1.1 Background to the Study
The Legal atmosphere in any given society affects business operation. Business strives well when business legislation are well defined and aimed at creating a favorable environment for business to thrive. These pieces of legislation will further national goals, stimulating the economy, conserving foreign exchange, enhancing competition among business entities, by prohibiting monopolistic tendencies and unfair method of competition by firms. It will also ensure that contracts are entered into and executed, with justice done to the parties and their right adequately protected.
In Nigeria, there is a plethora of business and commercial laws that govern different aspects of business environment for example, banking, insurance, capital market, etc. At this point, it is important to know what “law is”. For the purpose of this study, we shall adopt some definitions.
The definition by an eminent Nigerian jurist is that, “the law of a given society is the body of rules, which are recognized as obligatory by its members”
It is therefore the entire body of principles, norms or regulation that governs human conduct, the observance of which can be enforced.
Also “law” is defined by Cicero 1959 as, “the highest reason implanted in nature, which commands what ought to be done and forbids the opposite . . . what is right and that is also eternal, and does not begin or end with written
This means natural or moral laws which accord with our basic sense of justice of what is wrong and right in the state of nature, as opposed to or in contrast with legislative or man-made law.
Another definition is that, “law is a body of rules designed or formulated to guide human conduct or action which are enforced among members of a
given state or society.”
This refers to man-made law which exists to ensure legal order and due administration of justice in an organized society.
During the period of the state of nature, man and animals wondered about in the bush, forest, searching for food, a place to rest and eventually to lay head when it is night in order to sleep. Sleep at that time (state of nature) used to be at any place in the bush, like animals without shelter. This was prone to attack by animals, reptiles, birds and even stronger human beings. Later, the state was established or founded. This brought the nomadic lifestyle of the man of the state of nature to stagnation by way of shelter. By shelter, it means any enclosure used for resting or sleep built purposely by man for that purpose. This took the form of gathering of grass, sticks, and leaves. Later, with the advancement in technology of that time, mud, wood, stones were gathered to form enclosures and shelter . With further sophistication of technology, man developed skill to build houses, with wood, mud, stones, bricks, just like we have today, with all amenities for comfort and pleasure. Some people nowadays cannot have shelter without assistance from financial institution, though it is a right to have shelter in the Nigerian Constitution. This leads us to the need for mortgages as transaction to secure loan from banks with any given security. The Mortgage Institution Act provides for the establishment of mortgage institution in the country. S. 7 (a) provides that, “a mortgage institution shall not grant a loan or advance for the building, improvement of extension of dividing houses unless adequate securities have been taken on an existing property in respect of which the loan or advance is being granted”
The Bank and Other Financial Institution Act also provides for the establishment of loan by banks as follows:
 Elias T. O (1956), Nature of African Customary Law, Routledge and Kegan Paul, p.55
 Fitzgerad P.J. (1966), Salmond on Jurispruence. Twelfth Edition, Sweet & Maxwell, London, p. 643
 Sanni A. O. (1991), Introduction to Nigerian Legal Method, Obafemi Awolowo University Press Ltd, Ile-
Ife, Nigeria, p. 2
 S. 315 (5) Constitution of the Federal Republic of Nigeria 1999 (as amended) 2011, S. I Land Use Act, Vol. 7 1978 Cap. L 5, Laws of the Federation of Nigeria, 2004.
 S. I (i) Mortgage Institution Act, Vol. 8, Cap. M19, Laws of the Federation of Nigeria, 2004.
 Banks and Other Financial Institution Act, Vol. 2, Cap. B3, Laws of the Federation of Nigeria, 2004.