WHAT IS STAMPING AND UPSTAMPING OF A MORTGAGE DOCUMENT

WHAT IS STAMPING AND UPSTAMPING OF A MORTGAGE DOCUMENT

Mortgage "up-stamping" is the practise or process of paying higher stamp taxes on a mortgage document in exchange for the larger loan amount given in comparison to an earlier mortgage. This clause applies to all transactions that fall under the purview of section 22 of the Land Use Act of 1978. According to section 22(2)(b) of the Stamp Duty Act, instruments may be stamped outside of the allotted time with severe penalties. Additionally, a document must be properly stamped in order to be registered; documents that are not stamped will not be accepted (click on the pictures on left or right hand sides for more insights)

According to section 22 of the Stamp Duty Act Cap. 191, 1958, a document is required to be stamped ad valorem within 30 (thirty) days of first execution. Where the instrument is void, unless it has been approved by a public officer, the 30 days run from the date of such approval – section 22(5) of the Stamp Duty Act.

Typically, paperwork is delivered to the state's stamp duty commissioner where the property is located for evaluation. The Commissioner determines the amount of duty that is due after verifying the consideration for which the document is made, then signs a certificate with the calculated amount on it. When the document is voluntary, it must be ad valorem, as if it were a document on sale, with the value of the property conveyed substituting for the amount or value of the consideration for sale, and the duty must be adjudicated (that is, presented to the Commissioner for an opinion as to the amount that is to be paid) before the document is regarded as properly stamped. If a copy or duplicate of the document is to be kept on file at the Deed's Registry, it must be stamped with a fixed duty of 75k and a denoting fee of 39k in adhesive stamps, or postage stamps.

A valid mortgage is stamped at $75 per N200, or $75 per N200 in part, and additional advances are marked similarly. The fee for an equitable mortgage is N30,000 every N200 or fraction thereof. Only handwritten documents, like an express or implicit agreement to execute a mortgage, fall under this subhead. However, if the equitable mortgage is supported by a deed or grants the mortgage a power of sale or power of attorney, the document should be marked as a legal mortgage.

However, it should be noted that if the Governor's consent is required in a deed of legal mortgage and that consent was obtained at the time the mortgage was first created, the Governor's consent is not necessary for the up-stamping of the mortgage if a new facility is granted on it, according to Amaizu JCA in Bank of the North v. Babatunde (2002) FWLR (Pt. 119) 1452 at 1469.

The main characteristics of stamping-up are:

1. if the property remains unchanged;

2. if the parties are identical; however

3. If the new building is unique, then

4. To "up-stamp" the document, the new documents must be paid.

NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com

WRITTEN BY CHAMAN LAW FIRM TEAM

EMAIL: chamanlawfirm@gmail.com

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