Section 58 Mortgage and Property Law of Lagos State

Section 58 of the Mortgage and Property Law of Lagos State 2010 is about Prohibiting against kickbacks and unearned fees. It provides as follows:

(1) No person shall give and no person shall accept any fee, gratification, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, in respect of any referral or a part of a home mortgage settlement service involving the State or federally related mortgage loan.

(2) No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of any mortgage settlement service in connection with a transaction involving a State or Federal related mortgage loan other than for services actually performed.

(3) Nothing in this section shall be construed as prohibiting –
(a) the payment of a fee –
(i) for all professionals services rendered,
(ii) by a mortgage institution to its duly appointed agent for services actually performed in the issuance of a policy property insurance

(iii) by a mortgage institution to its duly appointed agent for services actually performed in the making of a loan;

(b) the payment to any person of a bona fide salary or compensation or other payment for, goods or facilities actually furnished or for services actually
performed;
(c) payments pursuant o brokerage and referral arrangements or agreements between real estate agents and brokers;

(d) affiliated business arrangements so long as –
(i) a disclosure is made of the existence of such an arrangement to the person being referred and, in connection with such referral, such person is provided a written estimate of the charge or range of charges generally made by the provider to which the person is referred,

(ii) such person is not required to use any particular provider of settlement services, and
(iii) the only thing of value that is received from the arrangement, other than the payment permitted under this subsection, is a return on the ownership interest or franchise relationship;

(e) the following shall not be considered a violation of subsection (2) of this
section –
(i) any arrangement that requires a buyer, borrower, or seller to pay for the services of a legal practitioner, credit reporting agency, or real estate appraiser chosen by the mortgage institution to represent the mortgage institution’s interest in a real
estate transaction, or
(ii) any arrangement where a legal practitioner or law firm represents a client in a real estate transaction and issues or arranges for the issuance of a policy of title insurance in the transaction directly as agent.

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