Interests in Land in Uganda (Land Law Notes)

Land interests include both legal and equitable interests.

Legal interests/Torrens System

These are land interests registered per the Registration of Titles Act Cap 230 (hereinafter referred to as the R.T.A.).

The R.T.A. provides for the manner of attaining legal interests, i.e., one’s interests should be registered, after which a certificate of title is provided. A certificate of title serves as conclusive evidence that one is a proprietor, and such a title cannot be challenged or impeached except for fraud.

The Torrens system is made up of two elements;

·         Registration of Title/Title by Registration

·         Indefeasibility of Title

Registration of Title

A legal interest comes from an equitable interest that is perfected once registered. Section 54 of the R.T.A. states that instruments are not effectual until registered. Instruments include documents such as sale agreements.

Registration is proved by having a certificate of title. That certificate of title is conclusive evidence that one is a registered proprietor of the land.

Section 92 (2) of the R.T.A. provides that, upon registration of the estate transfer, all powers and privileges thereto pass to the transferee, and the latter becomes the proprietor.

NB: Holding instruments like a land sale agreement does not entitle one to be a holder of legal interests. One must further register their instruments and be provided with a certificate of title; as a result to possess legal interests thereon. A holder of a sale agreement is considered to be an equitable interest holder.

Court held in John Katarikawe V William Katwiremu & Another – HCCS 2/73 that unregistered instruments create equitable interests. Before transfer, the buyer only acquires equitable interest in the suit land.

Notably, the title only passes once the transfer is effected and registered.

In Lumu V Lindo Musoke, the plaintiff sold land to the defendant. The defendant partially advanced payment for the land and the title documents were handed to him. The defendant started collecting rent from tenants contrary to the agreement that vested such right in the plaintiffs until the instruments with the defendants were registered. The plaintiff sued for trespass. It was held that according to Section 54 of the R.T.A., there had been no registration of the transfer and the land still belonged to the plaintiff.

Similarly, in Daudi Busulwa V Texas Co. (South Africa) Ltd. (1933), 5 U.L.R. 55, Ssebugulu deposited a title deed with the defendant as security for a loan. Ssebugulu had lodged a caveat on the land but sold it to the plaintiffs later. The plaintiffs sued to regain ownership of the purchased land. The court held that strict application of Section 54 of the R.T.A. could not help the plaintiff since he had no instruments registered.

Although the title does not pass until a transfer is registered, the equitable interests are still enforceable. This was illustrated in the case of Souza Figuerido V Moorings Hotel, where it was held that unregistered instruments are effectual and enforceable against the parties themselves.

Check out: Fixtures and Chattels

Indefeasability of Title

This principle of property law connotes that possession of a certificate of title is conclusive evidence that one is the registered proprietor of the land. Such a certificate of title cannot be impeached except for fraud. (Section 77 of the R.T.A.)

Section 59 of the R.T.A. provides that a Certificate of Title cannot be impeached because of any irregularity or informality in the application procedure prior to the registration of the certificate of title.

The indefeasibility of title is meant to protect people with registered/legal interests from those with unregistered interests. This was illustrated in Daudi Busulwa V Texas Co. (South Africa) Ltd. (1933), 5 U.L.R. 55 (supra).

Persons who possess legal interests in land have rights in rem. This means that their rights can be enforced against the whole world.

Fraud

Fraud is an act of dishonesty, misrepresentation, or concealment of a material fact to induce another to act to their detriment.

Section 77 of the R.T.A. states that a certificate of title procured by fraud is to be void. Section 64 (1) of the R.T.A. also provides that a registered proprietor’s interest is superior except for fraud. This means that the doctrine of indefeasibility of title will not apply to protect a legal interest holder where they acted fraudulently or were privy to the fraud.

Fraud can be actual or constructive. To have the effect of canceling the title, fraud must be attributed directly to the registered proprietor.

In Kampala Bottlers V Damanico, the trial judges found the appellant guilty of fraud because someone in the lands office, the chairman, and the town clerk had failed to notice the error on the appellant's title. On appeal, it was held that it was not shown that the appellant was guilty of any fraud or that he knew of it.

The onus of proving fraud lies on the party that alleges it. The standard of proof of fraud is higher than a balance of probabilities but not higher than that in criminal matters, which is beyond a reasonable doubt.

Exceptions to Supremacy of Legal Interests

Section 176 of the R.T.A. provides for exceptional situations where a registered proprietor having legal interests on land can be ousted or ejected from their land;

·         Mortgagee against Mortgagor in default

·         Lessor against a lessee in default

·         Where fraud is proven to exist

·         Where one possesses a registered title prior to the current one

·         An adverse possessor.

Equitable Interests

Equitable interests are rights on land that are not registered as per the formalities set out in the R.T.A. but are recognized and enforceable.

Equitable interest right holders do not possess certificates of title but have their rights founded in equity. This means that one can have no certificate of title portraying them as owners but possess valid rights on land that are registrable and can be enforced.

Equitable interests on land come in as an exception to Section 54 of the R.T.A., which advocates that a proprietor must register land interests, and Section 59 of the R.T.A. that one must obtain a certificate of title, which is conclusive evidence that one is a proprietor.

Equitable rights holders possess rights in personam. This means they possess personal rights that are enforceable against the parties themselves, as was the case in Souza Figuerido V Moorings Hotel.

CATEGORIES OF PERSONS WITH EQUITABLE INTERESTS IN LAND

Tenants by Occupancy

Section 29 of the Land Act Cap 227 (as amended) creates two categories of persons who fall under tenants by occupancy to wit; Lawful occupants and Bona fide occupants.

a)    Lawful Occupants

Lawful occupants are those who occupied (also inherited) land by virtue of the;

·         Busuulu and Envujjo Law 1928 (repealed);

·         Tooro Landlord and Tenant Law 1937(repealed); and the

·         Ankole Landlord and Tenant Law 1937(repealed)

·         Those who purchased from or entered the land with the consent of registered owners

·         Those who held land as Customary tenants on former public land, but when the Uganda Land Commission granted leases over their land, they were not compensated by the registered owners, or their tenancy was not disclosed.

NB: The Busuulu and Envujjo Law 1928 dates back to the land provisions of the infamous 1900 Buganda Agreement. The provisions of the 1900 Buganda Agreement allotted the Buganda Chiefs and nobles land in measures of square miles. This sprouted the word ‘Mailo’ (for the mailo tenure), which was adopted from the English word 'Mile.'

The land allotted under the Buganda Agreement was not vacant at the time. The land was inhabited by peasants who farmed it and derived sustenance thereon. Under the Buganda Agreement, these peasants became the tenants of the chiefs and nobles to whom that land was allotted. All the occupants on this land came under the control of the mailo allottees.

With time, the chiefs and nobles became unruly and evicted the occupants on the lands at their own will. As a result, the protectorate government then issued the Busuulu and Envujjo law 1928 to regulate the relationship between the occupants and their landlords.

The mailo allottees became landlords and were issued certificates of title. The occupants became tenants of the mailo allottees who had to pay rent (Busuulu) and tithe (Envujjo) to the mailo allottees (landlords). In return, the landlords had to recognize the rights of their occupants and issue them with receipts to ascertain their rent payments.

A similar arrangement was adopted for the neighboring communities, which sprouted the Toro Landlord and Tenant Law of 1937 and the Ankole Landlord and Tenant Law of 1937 with similar provisions.

The Busuulu and Envujjo 1928, Toro Landlord and Tenant Law of 1937, and the Ankole Landlord and Tenant Law of 1937 were later repealed.

As a result, the interests of the occupants were left hanging and not protected since they had no title.

This was reversed by the new law amendments under Section 29(1)(a) (i), (ii), and (iii) of the Land Act Cap 227, which recognized the rights of occupants who occupied land by virtue of the Busuulu and Envujjo law 1928, Tooro Landlord and Tenant of 1937 and the Ankole Landlord and Tenant Law of 1937 that were repealed.

Hence, this emerged as the first category of lawful occupants being those who occupied land by virtue of the repealed Busuulu and Envujjo 1928, Toro Landlord and Tenant Law of 1937, and the Ankole Landlord and Tenant Law of 1937.

b)   Bonafide Occupants

Bona fide occupants are persons who occupied, utilized, or developed any land for twelve (12) years or more without being challenged by the registered owner--Vide Section 29 (2) of the Land Act Cap 227 (as amended).

Bona fide occupants also include persons settled on the land by the Government.

Furthermore, bona fide occupants include any person who purchased or otherwise acquired the interest of the person qualified to be a bona fide occupant under Section 29 of the Land Act Cap 227. This was the case in Jjingo Mukasa V Rwaguma (Civil Appeal 190 of 2015) [2021], where the plaintiff became a bona fide occupant by virtue of being an administrator of her late husband’s estate, a bona fide occupant.

Section 29 (2) (a) of the Land Act defines a bona fide occupant as follows;

(2). “Bona fide occupant” means a person who before the coming into force of the Constitution –

(1). had occupied and utilised or developed any land unchallenged by the registered owner or agent of the registered owner for twelve years or more; or

 (2). had been settled on land by the Government or an agent of the Government, which may include a local authority.

 NB: Although equitable interests of bona fide or lawful occupants (tenants by occupancy) may not be noted as encumbrances on a certificate of title, Section 64 (2) of the R.T.A. intimates that any land included in any certificate of title is subject to the interest of any tenant of the land (lawful or bona fide).

In Mudiima & 5 Ors V Kayanja & 2 Ors [2014], the defendants bought the land. They sought to eject the occupants (plaintiffs) thereon because they were trespassers. The plaintiffs’ families had lived on the land since the 1970s, and the plaintiffs inherited equitable interests as lineal descendants (children). The court held that the plaintiffs were bona fide/lawful occupants with the security of tenure, and the defendants could not compromise their interests.

In Kampala District Land Board, & Chemical Distributors V National Housing & Construction Corporation, it was held that a bona fide occupant was given security of tenure and his interest could not be alienated except as provided by the law and that while the land occupied by a bona fide occupant could be leased to somebody else, the first option would be given to the bona fide occupant. If it is not done, it means the suit land would not be available for leasing.

Spouses on Family Land

A family is a group of people related by blood, adoption, marriage, or birth.

Article 26(2) of the Constitution of the Republic of Uganda 1995 provides that “Every person has a right to own property either individually or in association with others”

Section 38 (A) of the Land Act Cap 227 provides for the security of occupancy of spouses on family land, whereby a person cannot sell or carry out any transactions on family land without both spouses' consent.

Section 38A 4(a) of the Land Act Cap 227 defines family land as land;

·         On which the ordinary residence of a family is situated;

·         Land on which the family derives sustenance;

·         Land which the family freely and voluntarily agrees to treat as that which they use for ordinary residence and derive sustenance and

·         Land is treated as family land according to the norms, culture, customs, traditions, or religion of the family.

Before the sale, exchange or transfer, pledge, mortgage, inter Vivos donation, or any other transaction on family land is reached, valid, genuine, and informed spousal consent must be obtained.

Even where one of the spouses did not monetarily contribute to the purchase or development of the property or does not appear on the sale agreements or certificate of title, they possess a right by law that prohibits anyone from dealing on the land without first obtaining their consent provided that it is family land. The other spouse possesses an equitable interest in the land.

In Laila Lubega V Ali Lubega & Anor [2021], the husband mortgaged family land in DFCU bank. The wife sued the husband and the bank for a declaration that the suit land was family land and was subject to her consent as a spouse before any transaction thereon. The court ruled against the defendant and found the suit land family land. The defendants had not sought the plaintiff's consent; hence court nullified the mortgage.

However, for this section to apply, the suit land must be family land. The spouses must be legally married as per the recognized marriages in Uganda, i.e., Hindu, Mohammedan, Civil/Church, and Customary marriages. Where the parties are legally separated, this requirement will not apply.

Adverse Possessors

An adverse possessor is one who settles on land and openly, continuously and enjoys quiet possession without any challenge from the registered proprietor for a statutory period of 12 years or more.

The statutory limitation period for recovery of land provided for by Section 5 of the Limitation Act Cap 80 is 12 years.

The effect of Adverse possession is that where a person occupies land, develops, and utilizes it (for 12 years or more) without any challenge, disturbance, or adverse claims from the registered proprietor, they gain equitable interests off the land as adverse possessors. The equitable interests of an adverse possessor can ripen into legal interests.

In Rwaguma V Jjingo Mukasa [2015], the defendant laid claim over the suit land as part of his late father's estate and sought to recover it from the plaintiff, who was in occupation. The plaintiff and her late husband have enjoyed quiet possession of a portion of the defendant's land since 1959 without any challenge from the registered proprietor. The defendant instituted the suit in 2012, seeking to eject the plaintiff. It was held that the plaintiff was an adverse possessor who had acquired interest and could acquire legal title since she had occupied the land for more than 12 years without any adverse claims from the registered proprietor.

An adverse possessor can extinguish the registered owner's title and later apply for a new title over the same piece of land. (Section 87 of the R.T.A., Section 16 of the Limitation Act Cap 80). This was illustrated in Rwaguma V Jjingo Mukasa [2015], where the plaintiff was declared an adverse possessor and was eligible to apply for title to extinguish the existing registered interests of the defendant.

Elements of adverse possession

To rightfully claim the legal title, an adverse possessor must prove that their actions were;

·         Actual

·         Open

·        Hostile. In Smith V Tippett, 569 A.2d 1186, "Hostile" possession was defined as a possession that is opposed and antagonistic to all other claims and which conveys the clear message that the possessor intends to possess the land as their own.

·        Continuous. Existence of continuous possession of land to the exclusion of its valid owner for a statutory period of 12 years or more. The adverse possessor must have occupied the land in opposition to the original owner's right. The adverse possessor must not be acting merely under the owners' consent.

Adverse Possession of Unregistered land

The effect of adverse possession on unregistered land is extinguishing the original owner's interests. The adverse possessor gains the interests (equitable) of the original owner.

Refer to Section 29 of the Limitation Act Cap 80

Adverse Possession of Registered land

The effect of adverse possession on registered land is to extinguish the title of the registered owner who (adverse possessor), after the expiry of 12 years, may apply for a new title over the said land.

Refer to Section 29 of the Limitation Act Cap 80

Bona fide Purchaser for Value Without Notice

A bona fide purchaser for value without notice is a purchaser who, without any involvement in fraud, provides valuable consideration for land.

According to Section 181 of the R.T.A., a person registered through fraud can pass good title to a bona fide purchaser for value without notice. A bona fide purchaser is also referred to as 'Equity's darling' due to the dear shield this category of persons gets from equity.

The title of a bona fide purchaser for value without notice cannot be impeached unless the bona fide purchaser was fraudulent or was privy to the fraud.

The theology behind bona fide purchasers for value without notice brings about the doctrine of deferred indefeasibility. (Section 181 RTA)

In Lwanga V Registrar of Titles, the applicant's late father bought land but died before transferring it into his name. After the applicant's father passed away, one Katamba fraudulently forged an agreement purporting that he received the suit land as a gift from the deceased. 

He further forged a transfer of the land to his name and was registered as the proprietor of the land. Katamba later sold the land to one Salongo. To recover the land, the applicant prosecuted Katamba in a criminal case where the Magistrate found Katamba guilty of forgery and mandated the Registrar to transfer the land into the applicant's father's name. The Registrar, however, declined to effect the transfer. The applicant then appealed the Registrar's decision in the High Court.

In resolving the matter, Odoki, Ag J upheld the decision of the Registrar. It was held that Salongo was a bona fide purchaser for value without notice who had attained good title, which could not, therefore, be impeached or canceled. That unless it was proved, which was not, that he was not a bona fide purchaser for value or that he was privy or a party to the fraud perpetrated by Katamba, he had attained good title.

In Kampala Bottlers Ltd V Damanico Ltd, S.C.C.A No. 22 of 1992, Wambuzi, while quoting the trial judge on the definition of fraud, stated that fraud means actual fraud or some act of dishonesty.

Also, in Waimiha Saw Milling Co. Ltd V Waione Timber Co. Ltd (1926) A.C. 101, Lord Bushmaster stated that fraud implies some act of dishonesty.

Fraud can be Actual OR Constructive. 

It is constructive where knowledge of some facts puts the purchaser in a position to make more inquiries. The purchaser is expected to carry out utmost due diligence, necessary investigations, and prudence to prove the chain of ownership on the land.

In Okullo Makmoi Thomas V Apiyo Alice Civil Appeal No. 26of 2016 [2019], the land vendors, in this case, had no authority to sell the suit land due to a lack of Letters of Administration. The appellant dealt with the land vendors without ascertaining whether they were the rightful owners. The court held that the appellant was negligent in not taking the necessary steps to determine the vendors' status despite the circumstances which would have compelled a reasonably cautious man to do so.

Remarkably, in the instant case, Justice Stephen Mubiru stated, “When it is proved that such a purchaser acquired knowledge of circumstances which would put an honest and reasonable man on inquiry…..and yet he did not undertake the necessary inquires, such a purchaser cannot claim to have bought in good faith..’

Also read: Occupier's liability

Conclusion

This publication entails a discourse on interests in land. 

Interests in land can either be equitable or legal. A holder of legal interests on land possesses a certificate of title, which cannot be impeached except for fraud. 

Equitable interest holders also have rights on land but don't possess certificates of title to that effect. Although they do not possess certificates of title, they are accorded protection in equity, and their rights are enforceable. I have discussed the elements of the Torrens/legal system. 

Furthermore, I have discussed the categories of persons with equitable interests and how they come about. I hope you found this helpful.