Interest in land in the first instance means ownership or possessory rights that a person (natural or juridical) holds in land. The other definition of an interest in land refers to the manner in which land is held specifically as a legal or a beneficial owner. In this article, we will explore the various types of interests legally recognized in Kenya.
The nature of interest is determined by the length of time for which the land is held and the terms and conditions under which the title is held.
The right of a person to own and hold land in any part of Kenya is entrenched in Article 40 of the Constitution of Kenya, 2010, subject of course to the provisions of Article 65 of the Constitution. This particular Article of the Constitution guarantees the right of every individual to acquire and own land in Kenya, either individually or in association with others.
On the other hand, interest in land can either be legal or beneficial. A legal interest refers to formal ownership of an interest in or right over land while beneficial interest refers to the right to receive benefits resulting from the land. A beneficial interest can also arise where a person is legally entitled to land say by virtue of a grant or even pursuant to a sale transaction but the title documents for the affected land are yet to be processed in their name.
Rights and interests in land can be divided into two classes as more elaborately described below: –
Leasehold interests in land emanate from either the national government or the county government, with either being the head lessor. The period of the term ranges from between 50 years to 999 years. It is however important to note that for land held for a period of 999 years, the same was automatically truncated into 99 year leases after the promulgation of the 2010 Constitution.
One specific feature of leasehold interests is that land rent is payable to the leasing body annually and the amount payable is usually indicated on the face of the title document. Such rent is often nominal and is referred to as a peppercorn rent. Upon expiry of a leasehold term, the property reverts to the government or the county government but a proprietor holding leasehold property should at least three years apply for renewal of the lease. In most instances, renewal is automatically given provided that the proprietor has over the years complied with the terms and conditions attaching to the title specifically payment of land rent and rates (if applicable). Once renewed, new terms and conditions under which the title is to be held may be imposed including a review of the land rent payable. The old leasehold title is surrendered and a new title with the renewed term is issued.
The title documents for leasehold interest are usually a certificate of lease or a grant or certificate of title, with terms and annual rent indicated.
In Kenya, when a person holds land on freehold interest or in fee simple, it means that the ownership of the land and all structures attached to such land is for an undefined length of time i.e, in perpetuity. The landowner enjoys absolute ownership of the land and there is some comfort that stems from holding an interest in land of this nature because a landowner is able to deal in their land without conditionalities as is the case for land held on leasehold terms.
The title document is a title deed or a certificate of title or Indenture of Conveyance and the proprietor is often stated as holding the estate in fee simple.
In conclusion, it is advisable for a prospective purchaser of land to critically examine the title documents for the property in question and assess the interest of rights attaching to the land before making a decision to purchase the land.