ASSESSING THE LEGALITY OF SELLING LANDED PROPERTIES USING A DEBENTURE DESPITE A NATIONAL LAND CODE CHARGE

Abstract

Unlike individuals, financial institutions will require a different set of securities from companies to secure their loans. Typically, the company’s security will consist of amongst others a fixed and/or floating charge on all the company’s assets, a debenture, and a National Land Code 2020 charge, if the company’s assets include land.[1]  If the Chargor company defaults on the loan, the lender (usually the financier) will have an option to either sell the Chargor company’s land via debenture or to proceed with the process of foreclosure under the National Land Code 2020. Between both these options, the financier will almost always take the easier route of selling the charge property through the lender’s appointed receiver and manager rather than struggling through the cumbersome procedures of the National Land Code 2020