Restrictions of Ownership of Property by Foreigners in Kenya

An Analysis of the Case of Malindi Law Society & 12 Others vs the Attorney General & Another (2021) eKLR.

On 29th October 2021, a three-judge bench in the case of Malindi Law Society & 12 others v Attorney General & 2 others 2021 made a landmark judgment that had far-reaching implications on foreigners’ ownership of land in Kenya. The Court was faced with a constitutional petition challenging the validity and constitutionality of sections 38, 47, 48, 61 and 98 of the Land Laws (Amendment) Act.

Background and Facts of the Case

The Land Laws (Amendment) Act (hereinafter the “Amendment Act”) came into force in 2016 and sought to amend the provisions of existing land laws in order to align them with the Constitution.

Section 47 of the Act amended Section 12 of the Land Act and introduced the concept of ‘controlled land’ to mean land in Kenya which is; (a) within a zone 25 kilometers from the inland boundary of Kenya; (b) within the 1st and 2nd row from the high-water mark of the Indian Ocean and (c) any other land as may be declared controlled under any statute. The section restricted foreigners from dealing with controlled land without the prior written approval of the Cabinet Secretary in charge of the Ministry of Lands and Physical Planning.

The Petitioners of the case (the Malindi Law Society and the Mombasa Law Society) filed a constitutional petition arguing that the amendments by Section 38 of the Amendment Act sought to amend the Constitution through the back door and as such infringed on the rights of land owners. Further, they argued that sections 47 and 48 of the Amendment Act were discriminatory in nature as they restricted the constitutional right of foreigners to access and own land in Kenya. Indeed, the lack of pre-emptive rights by foreigners attempted to amend and redefine the protection of the right to property as provided under Articles 40(1) and 60 of the Constitution

The Respondents (the State) opposed the petition by contending that the right to property is not absolute and that the ownership of land by foreigners is subject to certain restrictions which the Amendment Act sought to address. The State argued that the concept of controlled land was necessitated by security issues with respect to the movement of people and goods in and out of Kenya’s international borders.

Issue for determination

The issue for determination by the Court was on the constitutionality of Sections 38, 47, 61, and 98 of the Land Laws (Amendment) Act and the concept of pre-emptive rights by non-citizens over leasehold land.

The Court’s Determination

The Court held section 38 of the Amendment Act that mandated the NLC to investigate historical land injustices gave effect to Article 67(2) of the Constitution which aimed at investigating injustices against all Kenyans and not just the non-citizens hence the said amendment was constitutional.

In regards to section 47 of the Amendment Act, the Court held that the introduced concept of controlled land was unconstitutional as it limited to a great extent the right to ownership of land by foreigners. It was incumbent upon the Respondents to demonstrate that the limitation was justifiable and that the societal need for the restriction outweighs the individual right to deal with properties. However, the State had failed to prove the reasonable justification to warrant the provision, as such the Court declared section 47 of the Land Laws (Amendment) Act unconstitutional and void.

With respect to the argument that section 48 of the Amendment Act denies foreigners pre-emptive rights over leasehold land, the Court contended that Article 65 of the Constitution limited the rights of non-citizens to hold land on the basis of a leasehold tenure of 99 years only. As such, the lack of pre-emption rights by non-citizens is reasonable and justifiable.

What the judgment means for you.

Foreigners unlike Kenyan citizens don’t enjoy the right to the pre-emptive allocation of leasehold properties held by them on the expiry of their tenure. The Court held that this limitation is not discriminatory and is within the legislative prerogative of the Parliament.

However, the concept of controlled land had far-reaching implications on the right to ownership of property by foreigners in Kenya and was thus section 47 was unconstitutional. This means that non-citizens may enter into transactions involving first and second-row beach front property and land within 25km from the inland national boundary of Kenya without seeking the written consent of the Cabinet Secretary in charge of Land.

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