Uganda Real Estate Laws
If you're planning to Investment in Africa, Uganda Real Estate is one of those safe investment opportunities you should consider.
Over the past 20 years the value of the Real Estates Industry in Uganda has grown steadily and this trend is expected remain so for some good time.
How long this Real Estates bubble will last..? I don't know...!
But my guess is that it can last long enough for you to start and operate a profitable Real Estates Business in Africa.
This section of The Real Estate Guide outlines for you some of the most relevant Uganda Laws governing Real Estates Transactions.
Acquiring Land Real Estate in Uganda
Currently land Real Estate is one of the most marketable commodities in the Uganda economy.
Whether you want to start small or big in Uganda Real Estates development, you can always find Land to cut into small portions and sell to your clients.
Running your Uganda Real Estate development business may however become difficult at some point in time, especially if you're planning to buy a property within the highly marketable areas of Kampala and its surroundings.
Your first hurdle will be to figure out how you will deal with the squatters on your Land real estate without jeopardizing your profitability.
Usually the best way is to sit down with your tenants and involve them in your project rather than fight them.
Use the information in this guide to formulate a strategy on how you will work with your tenants to obtain a win-win deal in your Uganda Real Estate business.
Your next hurdle is to obtain a genuine certificate of title from the person who has sold you the Land Real Estate before you sink more money into developing it.
Never consider your Uganda Real Estate Transaction a done deal without a genuine certificate of title in your hands.
Guiding documents in Uganda Real Estates Transactions.
Types of Land Real Estate Ownership in Uganda.
- The Constitution of the Republic of Uganda 1995 and
- The Land Act
- Customary Land
Under this tenure, land real estate is communally owned by a particular group of people in a particular area. Its utilization is usually controlled by elders,clan heads or a group in its own well-defined administrative structures.
In the Uganda Real Estate industry, this land tenure is usually in the North, Eastern, North east,North West and some parts of Western Uganda. Over 70% of land in Uganda is held on customary tenure system.
In such cases, people own their land, have their rights to it, but don't have land titles. Some tenants on such land allocate specific areas to themselves with known and defined boundaries usually marked by ridges, trenches, and trees.
- Freehold Land
It’s a system of owning land in perpetuity and was set up by an agreement between the Kingdoms and the British Government. Grants of land in freehold were made by the Crown and later by the Uganda Land Commission.
The grantee of land in freehold was and is entitled to a certificate of title. Most of this land was issued to church missionaries and academic Institutions and a few individuals.
Freehold is the premier mode of private land ownership under English law. The Land Act recognizes it as one of the four regimes through which access to land rights may be obtained.
Its incidents are defined to include registration of title in perpetuity and conferment of full powers of ownership that is the power of use, abuse and disposition.
Real Estate Transactions involving freehold land are governed by the Registration of Titles Act. Little land is held under freehold tenure in Uganda.
- Mailo Land
Land held under mailo tenure system is mainly in Buganda (Central region) and some parts of Western Uganda.
The system confers freehold granted by the colonial government in exchange for political co-operation under the 1900 Buganda Agreement.
Essentially feudal in character, the mailo tenure system recognizes occupancy by tenants, a.k.a bibanja holders, whose relationship with their landlords is governed and guided by the provisions of the 1998 Land Act.
Mailo land, like freehold is registered under the Registration of Titles Act. All transactions must therefore be entered in a register guaranteed by the state.
Under this tenure, the holder of a mailo land title has absolute ownership of that land. One only loses such ownership when such land is needed for national interests but still amicable compensations have to be done for a peaceful relocation.
- Leasehold Land
This is a system of owning land for a particular period of time. In Uganda you can get a lease from an individual, local authority or government for a period usually 49 or 99 years with agreed terms and conditions.
The leasehold Real Estate transactions, being essentially contractual allow parties to define the terms and conditions of access in such a manner that suits their reciprocal land use needs.
A grant of land would be made by the owner of freehold, customary or Mailo or by the Crown or Uganda Land Commission to another person for an agreed period of time. The grantee of a lease for an agreed time is entitled to a certificate of title.
- Public Land
Under this type of land tenure, the government owns land and has the right to lease it to any company or individual on specific terms and covenants.
In most cases, land under this arrangement is not for settlement; it is basically for business and usually located in urban areas such as Kampala and other big towns in the country.
The underling principle is that Land Real Estate in Uganda belongs to Ugandan citizens.
Therefore, if you are not a Ugandan citizen, you can only acquire Leasehold interest in Uganda Land.
How your Company can own Land Real Estates in Uganda
Your company can own freehold land if it is Ugandan, but not when it is foreign.
Your company will be considered foreign if the controlling interest lies with Non Ugandans.
How to buy Family owned Land Real Estates
Family Land is where:
- There is situated the ordinary residence.
- Ordinary residence is where the family derives sustenance
- Where the members freely and voluntarily agree to treat as family Land.
- Such land accorded that status by culture, norms, traditions or Religion.
You cannot purchase Family Land Real Estate from an individual without prior consent with his/her spouse, because the sale shall be considered void.
However, you can claim your purchase from the purported seller if your Real Estate transaction is canceled.
Land Real Estate Owners Vs Tenants.
Before you buy a Uganda Land Real Estate, you need to find out the occupancy status of the tenants on that land.
This is a critical due diligence step in your land real estate transaction because it will contribute to the valuation of the land you intend to buy.
The obvious buying trend is that a plot of land with many tenants should cost you less than a similar Uganda Real Estate with fewer tenants.
The status of occupancy becomes of great importance when you want to utilize your plot of land and yet you have to compensate your tenants first.
Land which is occupied by many tenants protected by law is likely to cost you more in terms of compensation to the tenants than a similar plot of land with unprotected tenants.
A tenant by occupancy means a lawful or bonafide occupant according to the land act.
Who is a Bonafide Occupant in Uganda Real Estate Transactions?
- Abonafide occupant is a person who before the 1995 Land Act
- Had occupied and utilized land un challenged by the registered owner for 12 years
- Had before 1995 been settled on the Land by the Uganda government.
Who is a lawful Occupant in Uganda Real Estate Transactions?
- A person who entered land with consent of the owner
- A purchaser of land from the owner
- A customary tenant who was not compensated at the time of leasing out the land.
- A person occupying land by virtue of the Toro and Ankole landlord and tenant law , and Busuulu and Envujjo Buganda Laws.
If you occupy land on basis of a license by the owner, you’re not a lawful or bonafide occupant.
If you acquire interest from a bonafide occupant you become a bonafide occupant.
You cannot become a bonafide occupant on unregistered land. How should you treat the tenants on your Land Real Estate?
If your tenant fails to pay you the approved rent for over 2 years , you need to serve her a notice to show cause why you should not terminate her tenancy.
If your rent is not paid within one year after the notice , you should refer the matter to the land tribunal.
If you want to sell your land real estate, you are obligated by the Uganda law to give your tenant the first right of opportunity to buy.
Your tenant by occupancy can apply to you (the registered owner) for a certificate of occupancy.
A tenant by occupancy can create a new interest in the land but must obtain the consent of the land owner.
If your tenant makes a sale of your land without your consent, that real estate transaction is considered void by the Uganda Laws.
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