Land Tenure System and its Impediments to Growth in Real Estate
The system in which land is owned plays a key role in the growth of real estate in any country. It is therefore paramount that anyone who invests in real estate should understand the existing land tenure systems of that region.
Skeeter Imisa
The term tenure is derived from the Latin word tenere which means to 'hold'.Therefore land tenure defines the relationship between people with respect to land.
There are different forms of the land tenure system that include individual, communal, leasehold, inheritance, and freehold.
How groups or individuals acquire, hold, or transfer property rights in the land poses a hindrance to the growth of real estate. This is because each form of tenure comes with its own set of laws and regulations.
In Kenya, the National Museums and Heritage Act 2006 deals with identifying, protecting, and conserving the cultural and natural heritage of Kenya. Therefore a building, area, or zone can be declared a national monument and preserved.
Foreigners and non-residents in Kenya can own land. However, there are certain restrictions on ownership and dealing with land. Foreigners and companies with foreign shareholding can hold land on leasehold tenure for a term not exceeding 99 years.
Land within a zone of 25 kilometers from the inland national boundary of Kenya; land within the first and second row from the high watermark of the Indian Ocean; and any other land declared as controlled land under any law or statute can't be owned by an individual or company that is non-Kenyan. Though for real estate developers this can be a good space for development.
The law allows for the compulsory acquisition of property by the government for a purpose that is in the interest of the public, subject to fair compensation. The process is initiated by the National Land Commission, which gives the owner and all persons with legitimate interests an opportunity to present their cases. Once the Commission agrees to the legitimacy it then proceeds to acquire the land. Though one is compensated it takes time and resources to start up somewhere else.
The government cannot seize land without adequate compensation. However, it can reclaim the land that was either illegally or unprocedural obtained. Proper investigation on history should be done on a piece of land before purchase. This, therefore, means that more time is taken before a developer invests in real estate.
No representations are made to a buyer of a property with a tenant in possession. The seller provides the buyer with the necessary paperwork and the parties agree on how property will be handed over disregarding the tenants in occupation. Therefore any agreement between the previous landlord and the tenant may not hold.
