Deed of Gift

What is a deed of gift?

A deed of gift is used for the voluntary transfer of property from one party (the donor) to another (the donee) without consideration.

A deed of gift can be used to transfer tangible items to another party. These tangible items include personal properties, such as vehicles, jewelry, furniture, etc. It can also be used to transfer title in real property, such as lands and buildings.

By using the deed of gift, the donor transfers the legal ownership of their property to the donee by way of a gift. In other words, after the donor gifts a property to the donee, the donee retains ownership of that property.

What are the different types of a deed of gift?

A deed of gift can be revocable or irrevocable:

• Irrevocable deed of gift: Generally, once the gift has been delivered and the ownership of the gift (property) has been transferred to the donee, it is irrevocable. This means that it can not be changed or reversed except if the donor did not have the legal capacity to grant the gift; the gift was given under duress, or misrepresentation or mistake surrounding the circumstances.
  
  
• Revocable deed of gift: On the other hand, a deed of gift is revocable in cases where the donor specifies that it is revocable. It can also be revocable if there are specific conditions the donee must meet before the gift can be transferred to the donee. The donor may have the right to revoke the deed if these conditions are not met. For example, the deed of gift specifies that the gift can be transferred to the donee only when the donee turns 18 years old; in this case, the donor may revoke the gift before the donee turns 18.
  
  

Note: Parties can sign a deed of gift where the donor decides to provide regular payment to the donee for a specific duration. This means that the deed will only be valid for that duration and will automatically be terminated when the duration elapses.

What is the difference between a deed of gift and a will?

• Transfer of title: A deed of gift transfers the title of the property to the donee immediately after execution (signing) of the deed and transfer of the gift. This means that the transfer of title is usually completed during the lifetime of the donor. On the other hand, gifts distributed under a Will or Codicil are transferred to beneficiaries only after the death of the maker of the Will.
  
  
• Notarization and registration requirements: A deed of gift transferring title to a real property (such as land or building) to the donee is a registrable instrument (registered in the Land Registry) while a Will is not a registrable instrument.
  
  
• Dispute: Unlike the Will or Codicil, one advantage of the deed of gift is that it is less likely to be challenged by way of a lawsuit because the gift was transferred during the lifetime of the donor.

Is it mandatory to have a deed of gift?

No, a deed of gift is not always mandatory for the transfer of property or assets.

However, when transferring title in real property, a deed of gift is often required as it typically needs to be registered with the Lands Registry.

What must a deed of gift contain?

The following are the essential components of a deed of gift:

• Information about the parties: The deed should provide the names, addresses, and other relevant information about the donor and donee.
  
  
• Description of the gift or property: A deed of gift should contain a detailed description of the property the donor is gifting the donee. For real properties, like land or buildings, the size, location, and registration number of the real property should be provided. For personal properties, like vehicles, jewelry, or artwork, a description of the items should be provided.
  
  
• Transfer of gift: The deed should contain a clear statement indicating that the donor voluntarily gifts the property to the donee without consideration.
  
  
• Acceptance of gift: The donee must signify acceptance of the gift by appending their signature on the deed of gift.
  
  
• Consideration: Gifts are typically made without consideration. A consideration clause stating that the gift is being made "in consideration of the love and affection between the parties" is sufficient.

Who is involved in a deed of gift?

The parties to a deed of gift are the donor and the donee. The donor is the party that owns the property or gift they are granting to the donee. The donee, on the other hand, is the recipient of the gift.

Either of the parties can be an individual, a company, or a registered organization. If the donor is a company or organization, they should obtain the requisite approval from the board of directors or officers of the organization before donating any gift.

Who cannot be a party to a deed of gift?

Generally, minors (persons who are below the age of 18 years) cannot validly enter a binding contract, including a deed of gift.

If the donee is a minor, the legal guardian or trustee of the minor should sign the deed of gift on behalf of the minor.

What is the duration of a deed of gift?

A deed of gift does not have a specific duration. In fact, once granted to the donee, it is irrevocable. This means that the donor cannot change their mind about the gift.

What should be done once the deed of gift is ready?

The donor and donee should sign the deed of gift. Signature can be done by hand or electronically.

If either of the parties is a company or organization, an authorized representative (for example, a manager, director, or senior officer of the organization) of the organization should sign the deed of gift.

After signing and notarization, each party should keep an original copy of the deed of gift.

If the deed of gift is used to transfer title to real property, it should be registered at the Land Registry of the state where the property is located.

Which documents should be attached to the deed of gift?

If the deed of gift relates to the transfer of title in a real property, the following documents may be attached to a deed of gift for registration at the Land Registry:

• Title documents of the property, such as donor's certificate of occupancy, deed of assignment, etc.;
• Power of Attorney, if the donor is represented by an attorney or representative;
• Receipt of purchase;
• Survey plan of property;
• Copies of a valid means of identification of the donee, such as an international passport, driver's licence, or national ID card; and
• Evidence of payment of registration fees.

For personal properties, the donor may choose to deliver a purchase receipt or proof of ownership of the property to the donee to confirm the donor's ownership of the property. However, note that this is not a mandatory requirement.

Is it necessary to notarize a deed of gift for it to be valid?

Yes, notarizing a deed of gift is necessary for transferring real property.

However, while notarization is not a strict requirement for personal property, it is recommended for added legal protection and to prevent disputes.

Is it necessary to register the deed of gift?

Yes. However, registration is only required when the deed of gift is transferring title to real property.

Is it necessary to have witnesses for the deed of gift?

Yes, the deed of gift needs to be witnessed to be valid.

After the parties have signed, the deed of gift should be witnessed by at least one person. The witness is required to hand fill in their names, addresses, and occupations and also sign the deed of gift.

What are the costs involved in the finalization of the deed of gift?

The cost of finalizing a deed of gift, particularly a deed of gift intended for the transfer of real property varies, as it includes the cost of notarization, registration, the requisite taxes, and attorney fees.

It is important to consult the Land Registry for updated details of the cost.

Is it possible for a donor to revoke a gift?

Generally, a gift cannot be revoked unless it is a conditional gift and the condition for the gift is not fulfilled. For example, if a donor gifts the donee a property in anticipation of marriage, the gift can be revoked if the marriage does not happen.

Additionally, a gift can be challenged and revoked by a court of competent jurisdiction if it is found that:

(I) the donor did not have the legal capacity to grant the gift;
(II) the gift was given under duress or by force;
(III) the gift was obtained by fraudulent misrepresentation or mistake surrounding the circumstances.

Which laws apply to a deed of gift?

The Land Use Act of 1978, the Property and Conveyancing Law, the Lagos State Registration of Titles law, and other state land registration laws regulate the registration of instruments transferring interest in real property.

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