Hypothetical Scenario:
Person A bought a parcel of land in the 80’s and was irregularly issued with a Certificate of Title by the Nairobi land registry. Over the years there have been subsequent transfers. Currently, the land is lawfully registered to Person B who has constructed a development consisting of 100 apartments for sale after acquiring all the necessary approvals. The development was ranked as the best place to live in Nairobi in 2022, subsequently, all the apartments quickly sold off. However, homeowners have woken up to the sudden and rather shocking eviction notice from the Kenya Railways Corporation. The notice asserts that the parcel on which the development is built forms public land as it forms a railway reserve.
Ms. S, a homeowner, says she will not vacate her home as she possesses a title document and demands answers. How did this happen? Who is at fault? What are her available remedies?
Is the principle of sanctity of title absolute?
Section 26 of the Land Registration Act, 2012 fortifies the doctrine of sanctity of title. This doctrine is derived from the Torrens System of Registration which provides a title document issued by a land registrar (the State) shall be taken by all Courts as prima facie evidence that the person named as the proprietor of the land is the absolute and indefeasible owner subject to the encumbrances, easements, restrictions and conditions contained in the Title. This essentially means that an innocent buyer who purchased a property and was legally issued with a title deed by a land registrar is the rightful owner even if there were irregularities or illegalities in the initial allocation process.
However, while the law provides for the indefeasibility of a title, the principle is not absolute. An innocent purchaser for value is not guaranteed protection as been recently demonstrated by the landmark judgement delivered by the Supreme Court of Kenya in the case of Dina Management Limited v County Government of Mombasa & 5 others (Petition No. 8 (E010) of 2021. The Supreme Court departed from the Torrens System of Registration and held that a title document can be invalidated if it is proven that the initial allocation process was illegal or unprocedural. This simply means possession of a registered title document by a property owner is not conclusive proof of ownership.
Do the irregularities or illegalities in the initial allocation affect subsequent transfers to innocent purchasers?
The above-cited case revolved around the irregular allocation of a parcel of land in Nyali Beach, Mombasa, that was initially owned by H.E. the late Daniel T. Arap Moi. Over time, the property changed hands through subsequent transfers until it was acquired by Dina Management Limited. The County Government of Mombasa forcibly entered the property, asserting that the land was irregularly allocated as it formed public land. On the other hand, Dina Management argued that it acquired the land lawfully and was issued with a title document to that effect. The dispute led to litigation at the Environment and Land Court, followed by an appeal to the Court of Appeal, and eventually, a petition was filed with the Supreme Court.
The Supreme Court held that since the first allocation to H.E. the late Daniel Arap Moi was irregular no valid legal interest could pass, as such all the subsequent transfers including the allocation to Dina Management were irregular and illegal. Therefore, the title held by Dina Management cannot be held as indefeasible.
What does this mean for you?
Going forward buyers and real investors must now exercise an increased level of caution and diligence by thoroughly investigating the history of a title from its initial allocation to the current owner to establish its legality and validity before purchase. Indeed, for a title to be considered indefeasible, a buyer must now prove that the entire allocation process and subsequent transfers were regular and lawful. It is not enough for a prospective buyer to perform a search at the Ministry of Land, they must look beyond an official search and acquire a certified green card. To learn more about what a certified green card is and what it entails, click here (link)
However, the task of accessing historical property records by prospective buyers will prove challenging due to the existence of the previous multiple registration regimes that resulted to inaccurate and inadequate land records at the Ministry of Lands. The ripple effect of the Supreme Court decision is that numerous Titles will lose their sanctity (indefeasibility) since many innocent buyers purchased their properties without notice of the historical defects of their properties.
What are the available remedies for innocent purchasers?Bottom of Form
The Court of Appeal, in the case of Kenya National Highway Authority v Shalien Masood Mughal & 5 others [2017] eKLR, held that the legal recourse and remedy for an innocent purchaser whose title is invalidated lies in instituting an action for compensation from the fraudulent or negligent party. Hon. Justice P. Kiage held as follows:
‘I therefore agree, as has been suggested by Waki, J.A., that a party offended by the misdeeds be -they fraudulent or negligent- that have the effect of making his otherwise good title of no effect is at liberty to seek appropriate compensation. In this case, I would think the person or persons responsible for the misrepresentations and/or misdeeds that led to a hollow title ought squarely to bear that blame.’
In light of the above, it follows that the principle of indefeasibility/sanctity of title is not absolute. Possessing a title is not conclusive proof of ownership over the property, especially if the initial allocation and subsequent transfers were irregular or unlawful. An innocent purchaser who has been duped into purchasing a property without a good title will have to count his/her losses and seek compensation from the responsible party for the misrepresentation.
Written by Cynthia Kitolo
Legal Officer & Advocate of the High Court of Kenya
