Document background
The Reservation Fee Agreement is a crucial preliminary document in Nigerian property transactions, used when a prospective buyer wishes to secure exclusive rights to purchase a property while finalizing their due diligence and arranging financing. This agreement type is particularly common in new developments and high-demand property markets across Nigeria, where buyers need to demonstrate serious intent. The document typically includes specific provisions compliant with Nigerian property law, detailing the reservation period, fee amount, and terms for converting the reservation into a full purchase or obtaining a refund. It serves as a protective mechanism for both parties, preventing the property owner from entertaining other offers while giving the potential buyer time to arrange their affairs, all within the framework of Nigerian contract law.
