Dealing with Land Transactions: What you need to know.

One of the most ignored requirements that come back to bite purchasers is consent, which is legally sought from people that may not even be named on the certificate of title. In addition, the real estate industry often involves transactions, which may be rendered void if completed without cautiously checking for some preliminary requirements.

To avoid some of the pitfalls associated with consent, a purchaser must have some basic understanding of which kind of real estate requires mandatory approval.

The most obvious ones are family land, marital property, and jointly held property. Besides these, some commonly ignored ones are land occupied by bona fide tenants, property held in trust (such as land forming an estate under administration or probate), leased land, and mortgaged land.

To start with, when thinking about consent, ensure that you do due diligence before concluding the transaction. Information relating to fraud is available in articles vide https://www.kaa.co.ug/mitigating-the-risk-of-fraud-in-land-transactions-in-uganda-a-guide-for-land-purchasers-2/  (Emphasis mine), and I proceed to explain below.

If it is established that the person offering that land for sale resides on the land with a spouse (someone they are legally married to), be sure to obtain consent from the spouse.

Where land is ordinarily resided on by a person with children above 18 years, written consent of the dependent children is indispensable while in case the land is resided on by children below 18, or orphans below 18 years that have interest in inheritance of the land, the vendor must get consent from the Parish Land Committee where the land is located.

The law makes no exception to these requirements except where there has been a default on a mortgage, and the mortgagee is exercising its powers under the law.

Notably, this exception does not mean that land can be mortgaged without consent. Instead, it simply means that once a spouse and or children have consented to mortgage the land they ordinarily reside on and derive sustenance, it will not be necessary to seek additional consent before exercising the rights of a mortgagee, including the right to sell in case of a default.

While on the subject of mortgages, creating second or subsequent mortgages on land usually requires consent from the existing mortgagee.

It is highly advisable that before agreeing to encumber mortgaged land further, a prospective lender takes care to check that the pre-existing loan agreements allow for additional mortgages.

Besides the exception indicated above, any transaction concluded without obtaining consent is void.

The law allows a purchaser who entered a transaction in good faith without knowing about a spouse or children to recover any money paid in respect of such a void transaction.

However, courts are less inclined to agree that a person purchased the property where the vendor’s spouse(s) and children resided without knowing about them. As such, courts may be less forgiving when it appears that the purchaser treated their purchase of real estate like a purchase of tomatoes from a roadside market.

Naturally, the law frowns upon spouses and children withholding consent unreasonably, but reasonableness depends on the specific circumstances of each case.

A person who intends to sell their land but hits an unreasonable stumbling block in obtaining consent from their spouse, dependent adult children, or the parish Land Committee, the law allows such as person to appeal to the Land Tribunal, which can then require those people to demonstrate why they cannot give their consent.

If the Land Tribunal finds that they are indeed being unreasonable, it has the power to dispense with the requirement for their consent.

Where the spouses or dependent adult children find out about an intended or concluded transaction carried out without their written consent, they can lodge a caveat on the title indicating that the property is subject to the requirement for consent. The committee may do the same on behalf of minors.

Naturally, many more transactions (such as creating a sublease or purchasing land occupied by bonafide purchasers) require consent from certain parties than are explained here.

Knowing how difficult and costly it is to recover money paid in void transactions, one does well to go the extra mile to ascertain if any consent is required before engaging in a transacting.

Which land needs consent?

A purchaser family land, marital property, jointly held property, land occupied by bona fide tenants, property held in trust (such as land forming an estate under administration or probate), leased land, and mortgaged land, must always seek consent to avoid pitfalls.

Where land is ordinarily resided on by a person with children above 18 years, written consent of the dependent children is indispensable while in case the land is resided on by children below 18, or orphans below 18 years that have interest in inheritance of the land, the vendor must get consent from the Parish Land Committee where the land is located.

The Author Mr.  Alex Matovu is a senior lawyer and managing partner at Signum Advocates. Email: [email protected] 

Disclaimer: This information is not designed to provide legal or other advice, and you should not take, or refrain from taking, action based on its content. Don’t hesitate to get in touch with us Via our social media platforms and email: [email protected], and we shall avail you with one of our partnering expert Lawyer/Law firms to assist you.