Real estate in Uganda is one of the most profitable investments one can make. This is due to the fact that its value has steadily been on the rise for over 20 years and the trend is expected to remain so for a longer time still. Here’s an outline for the most relevant laws guiding the real estate industry in Uganda.
Article 237(1) of the Constitution states that land belongs to the citizens of Uganda and Article 26(1) protects the right to own property either individually or in association with others for instance groups of people who own land communally.
The citizens of Uganda hold land under 4 tenure systems namely: Freehold, Mailo, Leasehold and Customary according to Article 237(3) of the 1995 Constitution of Uganda and Section 2 of the Land Act.
Freehold Tenure refers to land held/owned by an individual registered on the certificate of title as the land owner for life. There are no tenants by occupancy in this land.
An owner of freehold has the following rights:
Using and developing the land
Entering into land transactions
Taking and using produce from the land
Giving the land to any person in a will
This type of land is the most popular in Uganda. Leasehold and customary land can converted to freehold land (Sections 28 and 29 of the Land Act)
Mailo Tenure is land held by a land owner which has roots from the 1900 Uganda Agreement and 1928 Busullu Envujjo Law. It is mainly in the Buganda region. Both the land owner registered on the certificate of title and tenants by occupancy and Kibanja holders have interests on this land. They are all entitled to adequate and fair compensation.
A lease is created by law where:
The person granted the lease dies and his or her successor is registered as the new lessee.
A non-citizen person or company which acquires land in Uganda because non-citizens can’t own mailo, freehold or customary land.
A Ugandan who holds land in freehold and mailo tenure loses their citizenship, their land automatically changes to a lease of 99 years. This is because a non-citizen can only own land in leasehold tenure (Section 40 of the Land Act)
During the process of compulsory acquisition of leasehold land they by the government, the law recognizes two interests over the property in question:
The rights of the person granted a lease; and
The interest of the land owner
Therefore, both parties are entitled to compensation from the government in the event of compulsory acquisition.
Leasehold Tenure is land which a land owner allows another person to take exclusive possession for a specific period of three years or more in exchange for rent. A lease may be created either under a contract between the parties or by law. The person granted a lease must use the land for the specific purpose as agreed with the land owner (Section 3(5) of the Land Act).
Customary Tenure is where the land is owned based on the norms and traditions of a given society or community. One can even own land individually under customary tenure as long as it has been handed down from generation to generation using that society’s customs. Special protection is accorded to the rights of women, children and persons with disabilities to own, occupy or use customary land (Section 27 of the Land Act).
In 2015, the government of Uganda introduced Certificates of Customary Ownership (CCOs) for
owners of customary land. A customary land owner can apply for a CCO as proof of ownership of the land (Section 4 of the Land Act). This tenure is the most common form of land holding in Uganda.
KEY CONSIDERATIONS FOR LAND TRANSACTIONS
Rights and Duties of tenants by Occupancy and Kibanja Holders
Tenants by occupancy have a right to occupy land under the laws of Uganda.
They have a right to enter transactions with respect to the land they occupy with the consent of the registered land owner, which should not be denied on unreasonable grounds (Section 34 of the Land Act).
The law strictly requires tenants by occupancy to give the land owner first option where they wish to sell their interest and vice versa where a land owner wants to sell the land.
These rights and duties extend to Kibanja holders who must also obtain the consent of the registered owner before selling their Kibanja.
A person who buys registered land which has tenants by occupancy must respect their rights. He or She must not evict them except after obtaining a court order of eviction for non-payment of nominal ground rent.
Documentation of Land Transactions
Have an agreement in writing for any transaction (buying, selling, donating or bequeathing) on Land.
Ensure that the right persons in law i.e. an adult who holds interests in that land signs the agreement.
Ensure that you have copies of the original agreement.
All parties (buyers and sellers) must sign on all pages of the agreement.
For titled land, conduct a search to ascertain the real owners or interest holders.
Ensure that the legitimate land owner has valid letters of administration to deal in the
land and where there are more than one, all of them must sign the agreement.
Where either the buyer or seller of the land is illiterate, the person writing the agreement for or on behalf of the illiterate must indicate his or her full name and address as the writer of that document otherwise he or she commits an offence (Section 3 and 4 of the Illiterates Protection Act Cap 78).
Good land agreements in Uganda must have names and signatures of parties to the land including witnesses. The land location must be included as well as its size in both words and figures including description of what is in the land. Another important element is the date of the sale plus the amount of sale in figures and words.