How to Protect Land Purchase in Nigeria: Prevent Fraud and Disputes

Protecting Land Interests in Nigeria: From Agreement to Blockchain Notice (With Kachalla v. Banki as a Case Study)

Typical land transactions in Nigeria often follow three practical stages:

1. Due diligence – investigating title, ownership history, and encumbrances.
2. Agreement for Sale of Land – documenting the parties’ bargain and payment (often with receipt and possession).
3. Deed of Assignment – commonly used to transfer the seller’s interest to the buyer and usually requiring stamping and registration at the Lands Registry (and, for statutory rights, Governor’s Consent).

In theory, that’s the clean pathway. In reality, many transactions stop at stage two—or buyers obtain a Deed of Assignment but fail to register it promptly due to cost, complexity, or administrative delays.

The legal risk of this gap is not hypothetical. The Supreme Court decision in Kachalla v. Banki (2006) is a classic illustration of why buyers must take “notice” seriously—and why additional protective steps can matter while registration is pending.

The Common Problem: Transactions Stop Midway

Many buyers in Nigeria rely on:

• an Agreement for Sale,
• receipts,
• physical possession, and sometimes
• a Deed of Assignment that is not perfected/registered.

Where registration is delayed or not done at all, your interest may not be easily discoverable during due diligence searches. That creates fertile ground for competing claims, including:

• a later sale to another buyer,
• adverse family claims, or
• enforcement actions like attachment and auction following a judgment debt.

Case Study: Kachalla v. Banki (2006) — Why Notice and Priority Matter

The Facts (Simplified)

In Kachalla v. Banki (2006), the appellant Alhaji Mustapha Kachalla purchased a 24-bedroom building in Maiduguri on 16 March 1994 from Alhaji Bukar Kumshe, who was the registered holder of the right of occupancy. Kachalla paid ₦1,200,000 and received key documents including a receipt, a Deed of Assignment, the Certificate of Occupancy, and he took physical possession.

Later, in August 1994, Alhaji Tijjani Banki obtained a money judgment against Kumshe. By April 1995, the property was auctioned in execution of that judgment, and Alhaji Umaru Ngelzarma became the highest bidder for ₦520,000.

Kachalla went to court seeking declarations of ownership, nullification of the auction sale, injunction, damages for trespass and costs. The High Court dismissed his claim; the Court of Appeal affirmed. He appealed further to the Supreme Court.

The Supreme Court’s Key Holding

The Supreme Court held unanimously that Kachalla’s 1994 purchase vested in him an equitable interest of first priority. Consequently, the subsequent auction sale in 1995 conveyed nothing, because the property was no longer Kumshe’s to sell.

Two points from the Court’s reasoning are especially relevant to modern land transactions:

1. Priority by time (“first in time prevails”)
   The Court applied the principle that competing interests rank in order of creation:
   qui prior est tempore potior est jure — the earlier interest is stronger in law.
2. Equitable interest can defeat later interests where there is notice
   The Court found that the later interest was defeated, and that notice of Kachalla’s earlier interest was evidenced (in that case) by a caveat entered at the Upper Area Court.

The Court also clarified that under the Land Use Act (1978), land is vested in the State and what individuals hold are rights of occupancy—so the old idea of a superior “legal estate” versus a weaker equitable interest does not apply in the same way. The practical outcome remains: an earlier equitable interest, properly evidenced, can prevail over a later competing interest.

The Lesson for Buyers and Lawyers

Kachalla v. Banki demonstrates a reality of Nigerian conveyancing: even when you have paid and taken possession, another adverse interest can still arise later, including through court processes. When that happens, the buyer’s protection depends heavily on proof and notice.

In Kachalla’s case, a key factor was that there was evidence showing the later party had, or should be deemed to have had, notice of the earlier interest (via a caveat). But in many modern transactions, buyers have no caveat, no registry entry, and no reliable public record that is discoverable during due diligence.

That is where the risk lies.

Equity Can Protect You—But You Must Be Able to Prove Notice

Even with an Agreement for Sale, your interest may be protected in equity if:

• you paid value in good faith, and
• you can show that a later buyer could be deemed to have had constructive notice of your interest.

Constructive notice becomes easier to argue where your interest is discoverable through reasonable search efforts.

But if your transaction is private (documents in a drawer, no registry entry, no caveat, no public trace), a later buyer may argue they purchased without notice, and the dispute becomes more complex and expensive.

Where Lexkeep Comes In: Blockchain Anchoring + Online Notice (Pending Registration)

Lexkeep provides a practical way to strengthen proof and discoverability during the gap between agreement/execution and formal registration.

1) Anchor the Agreement for Sale on Blockchain

Lexkeep allows you to upload your Agreement for Sale (and supporting documents) and create a cryptographic fingerprint (hash) that is anchored on the Ethereum blockchain.

This creates tamper-evident proof that:

• “this exact agreement existed by or before this time” (based on the blockchain timestamp), and
• the document’s integrity can be verified later by matching hashes.

No confidential document content is stored on-chain—only the cryptographic fingerprint.

2) Publish a Property Notice That Supports Constructive Notice

Lexkeep goes further by enabling you to publish a property notice containing descriptive property identifiers (e.g., LGA, community, landmark, survey references where available).

Lexkeep then:

• hashes the notice,
• anchors that notice-hash on-chain, and
• publishes the notice online in a searchable format.

This makes the existence of your interest more discoverable for anyone conducting due diligence for encumbrances—strengthening the argument that a later buyer ought to have known about your prior interest.

In other words: it helps you create a modern equivalent of the “caveat effect” seen in Kachalla v. Banki, but in a digital, searchable and independently time-stamped way, especially when formal registry processes are delayed.

Important Note: Blockchain Notice Is Not a Substitute for Land Registry Registration

Lexkeep is not replacing statutory requirements like stamping, Governor’s Consent, or registration at the Lands Registry.

Instead, it provides a risk-reduction layer—particularly useful where:

• registration is delayed,
• perfection is in progress, or
• you need independent proof of timing and integrity of your documents.

Conclusion

Many land disputes in Nigeria arise not because buyers acted in bad faith, but because their interests were not clearly discoverable during due diligence at the crucial time.

Kachalla v. Banki (2006) shows that an earlier equitable interest can prevail, especially where notice can be shown. Lexkeep helps buyers and lawyers strengthen both:

• proof (via blockchain anchoring of the agreement), and
• discoverability/notice (via an online notice whose hash is also anchored).

This can reduce the risk of adverse claims and future litigation, especially during the period before registry perfection is completed.