“Supreme Court Says Seller May Hold Property In Trust For Buyer” — But Rules No Constructive Trust Where Purchase Price Was Not Received

The Supreme Court of Nigeria has clarified the circumstances under which a seller becomes a constructive trustee for a buyer in a contract of sale. According to the court, while the law may treat a seller as holding property in trust for a buyer until a transaction is fully completed even where legal title has not been transferred, this does not apply where the purchase price was not received by the seller. This ruling provides clarity on the rights and obligations of parties involved in real estate transactions in Nigeria.

The Supreme Court of Nigeria has issued a significant clarification on the circumstances under which a seller becomes a constructive trustee for a buyer in a contract of sale, with far-reaching implications for real estate transactions in the country. The court's ruling addresses a long-standing issue in Nigerian law and provides much-needed guidance to parties involved in property sales.

In Nigeria, the concept of constructive trust is governed by various statutes, including the Sale of Goods Act and the Law of Property Act. However, there has been a lack of clarity on when a seller becomes a constructive trustee for a buyer, particularly where legal title has not been transferred. This ambiguity has led to disputes between parties involved in real estate transactions.

The Supreme Court's ruling provides that while a seller may be treated as holding property in trust for a buyer until a transaction is fully completed, this does not apply where the purchase price was not received by the seller. This means that sellers who have not received payment from buyers cannot be held liable as constructive trustees. The court's decision has significant implications for real estate transactions in Nigeria, particularly in cases where buyers and sellers are involved in disputes over property ownership.

The Supreme Court's ruling provides much-needed clarity on the circumstances under which a seller becomes a constructive trustee for a buyer in a contract of sale. Practitioners should take note of this development and ensure that they advise their clients accordingly. The court's decision also highlights the importance of clear communication and documentation in real estate transactions to avoid disputes over property ownership.