.webp "interests in land legal and equitable")
Interests on land refer to right, title, advantage duty or liability on land.
Land interests include both legal and equitable interests.
Legal interests/Torrens System
Legal interests are interests formally registered per the Registration
of Titles Act Cap 234 (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
brought about 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 neighbouring
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 39 of the Land Act Cap 236 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 39 (4) of the Land Act Cap 236 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 openly and, 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 cancelled. 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. 26 of 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.