THE LAW OF PROPERTY
This is the law concerned with the bundle of rights a person may have on land. Such rights may be exclusive or otherwise. Property law defines the range of functions a person may exercise in a given situation at a given time. It confers proprietary rights and imposes obligations on owners/holders of land. Land includes physical strata, water all things growing on it, buildings or other things permanently annexed on the land.
Common law conception of land is based on the maxim cujus est solum which literally means that land encompasses more than just the soil. It includes all things found in the aerospace above and the geospace below. Land includes all the permanent fixtures. The common law conception of fixture is expressed by the maxim Quic Quid plantatur solo solo codit which literally means whatever is attached to land belongs to the land.
At common law, fixtures were deemed to be part of the land and could not be removed.
However, this principle was modified and certain categories of fixtures could be removed e.g.
- Trade fixtures to enable a tenant carry out his trade
- Ornamental and domestic features if they did not cause substantial damage to land
- Agricultural fixtures could be removed from 1948
The common law principles of applies in Kenya’s property law, however it has been modified by statute law e.g. The Water Act,1 The Mining Act, The Way leaves Act2 and The Agriculture Act.
POSSESSION AND OWNERSHIP
Whereas ownership signifies title or a bundle of rights exercisable with respect to the subject matter, possession is the mere right to hold and may be actual or constructive. Ownership confers proprietary rights. However, in certain circumstances, possession may confer the right to use.
Ownership of land may take three forms:
- Sole ownership
- Joint ownership
- Common ownership
SOLE OWNERSHIP
The land in question is owned by one person who exercises all the rights in relation to it
JOINT OWNERSHIP
A situation where property is owned by two or more persons. It enjoys all the characteristics of a single owner. Proprietors have no individual shares in the property. Joint ownership is characterised by four unities namely:
- Unity of title
All the persons derive title from the same title
- Unity of possession
All the persons are entitled to each and every part of the land. They have the same rights to use any part of the land.
- Unity of interest
All the owners own a similar interest in nature, extend and duration
- Unity of time
The interest of the owners commences at the same time
COMMON OWNERSHIP
This is the ownership of separate but undivided shares in the land. It does not confer the right of survivorship and a common owner can transfer his share to others with consent of the other owners. Common ownership terminates when the land is sold or partitioned
INTEREST IN LAND
It may take any of the three forms:
- Estate
- Servitude
- Encumbrances
ESTATE IN LAND
An estate in land may be freehold or leasehold.
FREEHOLD ESTATE
Confers a bundle of rights exercisable for an indefinite duration. It may be acquired by inheritance or otherwise. The rights it confers can be transmitted to future generations.
Freehold estates include;
- Free simple
- Free tail
- Absolute proprietorship
- FREE SIMPLE
This is the largest freehold estate a person can have on land at common law. It confers the largest quantum of rights. It confers unrestricted right to use, misuse and to dispose. In the event of death, the rights are transmitted to the person entitled to inherit the estate failing which it escheats to the state. No conditions are attached as to its inheritance. Holder can dispose it by deed or by will, wholly or in part, conditionally or unconditionally. The holder of a fee simple is entitled to commit waste on the land. Waste may be:
- Ameliorating waste – Consists of acts which improve the value of land.
- Permissive waste – Consists of acts not detrimental to land
- Voluntary waste – Consists of acts detrimental to land
- Equitable waste – This is wanton destruction of land.
Creation of Fee Simple
This estate may be created by:
- Grant:- if it is transferred by one person to another
- Inheritance: – if inherited from a deceased
- Enfranchisement; – applies to agricultural leases where the government on expiration of the term of the lease, converts it to a freehold estate
- FEE TAIL
A freehold estate which confers a life interest on the holder. Descends only to specified persons.
Confers the right to determine the person or persons entitled to inherit. The estate is generally created by inheritance
- ABSOLUTE PROPRIETORSHIP
Created by Sections 27 & 28 of The Registered Land Act CAP 300. Section 27 provides inter alia upon registration, the owner acquires all the rights and privileges associated with such ownership. These rights include right to use, misuse or dispose. The rights of the registered holder cannot be defeated unless as provided for by the Act. The person to whom the land is registered becomes the absolute owner to the exclusion of all others. This estate is illustrated by the decision in Obiero V. Opiyo. The registration terminates all customary rights previously exercisable on the land.
Creation of Absolute Proprietorship
- Registration after Adjudication
- Conversion from other registers
- Transfer
- Inheritance
- Consolidation
Examples of fee simple
- Life Estate
An estate which lasts for the life of the grantee and is created by inheritance. Death of the grantee terminates his interest
- Estate Pur Autre Vie
An estate in the life of another. It lasts for the life of that other person and lapses on his death. May be created by Express Grant or Assignment
It is a freehold estate but reverts to the grantor when the person dies. Person on whose life the state is measured is the Cesqui que.
LEASEHOLD ESTATE (Tenancy)
Lease refers to a transaction which creates the relationship of landlord and tenant between the grantor and grantee. The formal document by which this is done is a lease.
Leasehold is the quantum of rights which a lease grants to the lease. It is a secondary
Interest in land derived from a primary interest. Confers upon the leasee / tenant exclusive possession of another land
CHARACTERISTICS OF TENANCIES/ LEASES
- Exclusive possession
A tenancy confers upon the grantee/ tenant the right to hold the interest to the exclusion of all others. Means that no other person has an equal right to it. It was so held in Helcht V. Morgan.
- Defined premises
The premises to which the tenancy or lease refers must be defined or ascertained. It must be identifiable by reference to the agreement. It was held in Heptulla V. Thakore.
- Certain period
A lease must commence at and exist for a certain period or for a period capable of being ascertained. It was so held in Marshalls V. Berridge
- Scope of grant or Quantum of Rights
The bundle of rights conferred by a lease must be definite or capable of being defined. The leasee must know the rights exercisable under the lease.
TYPES OF TENANCIES OR LEASES
- Fixed Tenancy
A tenancy created for a fixed duration. Its commencement and termination must be specified. Such a lease determines when the duration expires
- Periodic tenancy
Tenancy / lease which continues indefinitely from a period to period e.g. 1 year. Such a lease may be express or implied. Its duration is not specified and it may arise if a fixed period tenant remains in possession and continues to pay rent.
- Tenancy at will
Tenancy whereby the tenant occupies premises on the terms that either party may determine the relationship at any time. The tenancy terminates in the event of death of either party or committing an act inconsistent with the tenancy.
- Tenancy at sufferance
Arises whenever a fixed period tenancy holds over or remains occupation without the landlord’s consent. This tenancy is created by operation of law. If landlord accepts rent, it becomes a periodic tenancy. However, the tenant may be ejected at any time without notice.
- Service tenancy
Created to enable the tenant perform a particular service. The occupation is necessary for performance of the service; however the tenancy terminates on determination of employment.
OBLIGATIONS OF THE PARTIES
A tenancy/ lease impose upon the parties certain legally binding obligations.
DUTIES OF LANDLORD/LESSOR/GRANTOR:
- Duty not to derogate from the grant: He must not do anything inconsistent with the tenancy or lease. These are acts likely to render the premises unfit for the purpose for which they were rented.
- Duty to ensure quiet enjoyment: The landlord, his servants and agents must not interfere with the tenant’s enjoyment of the premises. Tenant is entitled to peaceful occupation without unlawful interference or interruption.
- Duty to grant premises fit for purposes: Landlord must ensure that the premises let are fit for the particular purpose for which it is let.
- Duty to suspend or adjust rent: If the premises or part thereof is destroyed/ damaged without the tenants negligence rendering it wholly or partially unfit for occupation or use, the lessor is bound to suspend or adjust rent depending on the nature of damage until the premises are rendered fit for use or occupation.
- Duty to repair: As a general rule, it is the duty of the lessor to repair the roof, main walls, main drains, common passages and installations. This duty is statutory if only part of a building is let
- Duty to put the tenant in possession: The lessor is bound to hand over to the lessee, the mains which enable him enter into occupation
DUTIES OF TENANT/LESSEE/GRANTEE:
- Duty to Pay the Rent Reserved
It is obligation of lessee to pay the rent as agreed. Such rent is payable irrespective of occupation.
- Duty to Pay Rates and Taxes
Lessee is bound to pay all rates and taxes except where the landlord is under statutory obligation to pay.
- Duty Not To Commit Waste
Lessee is duty bound not to commit waste i.e. he must not do anything which reduces the value of the premises. Fixed term tenants are liable for voluntary and permissive waste.
- Duty not to transfer, sublet or part with possession
As a general rule, the lessee must not transfer, sublease or charge the premises without the lessor’s written permission.
- Duty to Permit Landlord to View the Premises
It is the duty of the lessee to enable the landlord appreciate the condition of the leased premises. The obligation is generally implied where the lessor is bound to repair the premises.
- Duty to Make Reparation for Any Breach
The lessee is bound to repair and make good any defect or breach of agreement for which he is to blame. Reparation must be made within reasonable time as may be specified by a notice given by the lessor.
- Duty to Make Material Disclosure
The lessee is bound to inform the lessor of any external interference by third parties or of any action he is about to take which affects the value of the premises
- 8. Duty Not To Erect Fixtures
The lessee must not, without the lessor’s consent erect any permanent structures on the property. However, structures erected for agricultural purposes are permissible
- Duty to Put the Landlord in Possession
It is the lessee’s duty on expiration of the lease to put the lessor in possession of the leased premises. If a tenant is guilty of breach of terms of the lease e.g. non-payment of rent, landlord has an action in damages or may distress the tenant pursuant to the provisions of the Distress for Rent
Act3.
TERMINATION OF TENANCIES/LEASES
A tenancy agreement may terminate in the following ways:-
- By Notice
Applicable where the tenancy is for a fixed duration or where either party desires to terminate the leases before the duration expires. The notice must sufficiently indicate the party’s intention to terminate the lease.
- Lapse of Time/ Expiration of Time
A fixed period tenancy terminates on expiration of the duration
- Forfeiture
This is the right of the lessor to re-enter the premises and there-by prematurely determine the lease in the event of certain breaches. The lessor may do so pursuant to forfeiture clause or in accordance with the provisions of the ITPA or Registered Land Act e.g. If the lessee is bankrupt or insolvent or upon the winding up of the company
- Surrender
The giving up by the tenant, to the landlord, of the leased premises. Express surrender must be made in a prescribed form
- Merger
Under the ITPA and Registered Land Act, a lease determines if the lessee or some other person becomes entitled to the property as of right. A merger must be express.
- Enlargement or Conversion
A lease determines if it is converted into some other interest e.g. freehold in accordance with the law.
- Frustration
As a general rule the doctrine of frustration does not apply lease agreements. However, a lease is terminable by frustration if the property or part therefore is rendered unusable.
- Disclaimer
This is the right of the lessee/tenant to disclaim the lease. He can only do so if authorized by statute. On doing so the lease terminates.
A Lease differs from a Licence in that traditionally, licence is permission given by the occupier of land which without creating an interest in the land allows the licensee to do some act which would otherwise be a trespass.
A licence does not confer the right to exclusive possession of the land. It is a mere permission by a party to another to enter upon the licensor’s land. It does not require any writing or registration and is not transferrable
SERVITUDES
These are rights in alieno solo i.e. a right conferring a power on another’s land for the benefit of the right holder or his estate.
At common law, servitudes include:-
- Easements
- Profit apprendre
- Restrictive covenants
EASEMENTS
A right attached to a parcel of land which allows the proprietor of the land either
- To use the land of another in a particular manner
- To restrict its use to a particular extent
An easement may be positive or negative. It is positive if it authorizes the use of another’s land in a particular way. It is negative if is restricts that other in the use of his land.
CHARACTERISTICS OF AN EASEMENT
- There must be a dominant and a servient tenement: There can be easement properly so-called only if there be both a servient and a dominant tenement. An easement must be connected with the dominant tenement.
- Dominant and servient tenement must be owned/ occupied by different persons: This is because an owner cannot have an easement over his land. It has been observed that in order to obtain an easement over land, you must not be the possessor of it for you cannot have the land itself and also an easement over it.
- Easement must accommodate the dominant Tenement: What this requires is that the right accommodates and serves the dominant tenement and is reasonably necessary for the better enjoyment of that tenement.
- Easement must be capable of forming the subject matter of the grant: This characteristic means that the easement must be capable of being granted by deed hence there must be:-
- A capable grantor
- Capable grantee
- The right must be sufficiently definite
- Right must be of a nature capable of being granted
An easement differs from a license in that it is a proprietory interest attached to the land. It differs from a lease in that it does not confer possessory rights over the land.
CREATION OF EASEMENTS
An easement may be acquired in the following ways:
- Express Grant: A situation where the grantor expressly confers the right to the grantee in prescribed form which must specify the nature of the interest, duration and other conditions or limitations.
- Statute: An easement may be granted by an Act of Parliament to facilitate the discharge of a statutory obligation.
- Prescription: Under the Limitation of Actions Act, 20 years of continuous use of another’s land grants an easement to the user. The use must have been uninterrupted.
TERMINATION OF EASEMENTS
- Lapse of Time
Under the Registered Land Act, an easement terminates on expiration of the prescribed duration.
- Occurrence of an Event
The Registrar of lands is empowered to cancel the registration of an easement on application by the party affected by any breach of its terms
- Unity of Seisin
Acquisition of full ownership of both the dominant and servient tenements by the grantee or some other person destroys the easement.
- Merger of Interest
Under the Registered Land Act, an easement terminates if the dominant and servient tenement are vested in the same person provided the tenements are combined under one title and registered as such.
- Release or Abandonment
A grantee may by executing a deed abandon the easement to the grantor thereby terminating the same.
- Judicial Discharge
Under Section 98 of the Registered Land Act, the court is empowered on application by an interested party to order termination of an easement if satisfied that there is reasonable cause to do so.
PROFIT APPRENDRE
The right to take something off another’s land It is the right to go on the land of another to take particular substance from that land, whether the soil or products of the soil. A profit enables the grantee to take something capable of ownership from grantor’s land.
If a profit is enjoyed by others, it is referred to as profit in common/common. If it is enjoyed to the exclusion of others it is a several profit. If a profit is attached to the land, it is said to be a profit apportionment.
A profit may be created or acquired by:
- Express grant
- Prescription by law
May be terminated by:
- Release/Abandonment
- Unity of Seisin
RESTRICTIVE COVENANT
An agreement by which a proprietor or land owner undertakes to restrict the use of his land in a particular manner for the benefit of some other land. Such an agreement may arise between two landlords or tenants owning or occupying adjoining properties. The covenants are created by agreements which are registerable under the law.
They are terminable by mutual consent.
ENCUMBERANCES
These are rights in alieno solo which constitute burdens on the property. They are generally of a temporal character. Encumbrances are either mortgages or charges.
MORTGAGES
In the words of Lindley J in Santley V. Wilde (1859) a mortgage is a conveyance of land or assignment of chattels as security for payment of a debt or the discharge of some other obligation for which it is given
CHARACTERISTICS OF A MORTGAGE
- Conveyance of the title to the mortgage
- A proviso for reconveyance on payment
- The right of redemption
The law relating to mortgages and charges in Kenya is contained in the Indian Transfer of
Property Act, Registered Land Act and Equitable Mortgages Act
Under Registered Land act, A Charge is an interest in land as a security for the payment of money/ monies or the fulfillment of any condition.
TYPES OF MORTGAGES
The ITPA recognizes the following types of mortgages:
- Simple mortgage
A mortgage transaction whereby without delivering possession of the mortgaged property, the borrower binds himself to pay the mortgage and agrees that in the event of non repayment, the mortgagee shall have the rights to sell the property and the proceeds applied in the payment of the mortgaged money.
- Mortgage by conditional sale
A mortgage transaction whereby the borrower ostensibly sells mortgaged property to the mortgagee on condition that the event of default, the sale becomes absolute or in the event of payment the sale becomes void.
- Usufructuary mortgage
The lender (mortgagee) takes possession of the mortgaged property and uses the proceeds to repay himself
- English Mortgage
The borrower binds himself to repay the mortgaged money on a specific date and transfers the mortgaged property to the mortgagee subject to a re-transfer upon repayment of the mortgaged money.
- Anomalous Mortgage
Created by Section 98 of the ITPA. The rights of the parties and other terms and conditions of the transaction are determined by the mortgaged instrument.
- Equitable Mortgage
Created by the Equitable Mortgages Act CAP 291. The borrower deposits his title deed with the mortgagee but without delivering possession of the mortgaged property.
DUTIES OF MORTGAGORS AND CHARGORS
- To repay the principal sum and interest
- To pay all taxes and rates
- To honour previous obligations if the charge or mortgage is a subsequent transaction
- To keep the premises in repair
- To insure the property in the joint names of the parties
- To farm according to the rules of good husbandry in case of agricultural land.
- To honour the terms of the lease if the property is a lease.
These obligations terminate upon the discharge of the charge or mortgage or on cancellation of the transaction by the registrar
REMEDIES OF MORTGAGES AND CHARGES
- Foreclosure
A Court order which denies the borrower the right to redeem his security. The remedy may be availed by the court after the mortgage debt is due but before redemption. It is provided for by section 67 of the ITPA
- Appointment of Receiver
A mortgagee/ chargee is empowered to appoint a receiver to take over the security given by the borrower to facilitate payment of the debt. Exercisable in circumstances in which the lender has the right foreclose. A charge may appoint a receiver if there is a default which continues for one month or if the borrower does not honour a demand notice in three months. The amount recovered by the receiver must be applied to pay rates and taxes, prior mortgages, any commission payable, insurance premium, interest payable under charge/mortgage
- Statutory Power of Sale
The power of mortgagee or charge to sell the mortgaged property in the event of default by the borrower. This right is exercisable if:-
- There is no contrary provision in the mortgaged instrument
- Borrower’s signature has been attested to by an advocate
- Notice to pay the amount has been served upon the borrower who has not responded in three months time or interest has in arrears for 2months. The monies realised must be applied to pay prior encumberances, expenses of the sale, mortgage or charge, subsequent encumberances if any.
- Consolidation
The equitable right of a chargee holding several charges to insist that all be redeemed together.
This right is only exercisable if:-
- The mortgages had been executed by the same borrower
- The charges are held by the same chargee
- There has been default in respect to all of them
- The securities are still in existence
- The right to consolidate is expressly reserved by the instruments
- Suit on Personal Covenant
The right of a chargee or mortgagee to sue the borrower in the event of default. It is an action for recovery of the amount lent. The right is exercisable if: –
- The mortgagee/ borrower has executed a personal covenant to repay
- Security provided is destroyed by a wrongful act or default by the borrower
- The borrower has refused to deliver possession to a mortgagee who is so entitled.
RIGHT OF REDEMPTION
This is the right of the borrower to recover his security from the mortgagee/chargee. The right is recognized by common law and equity. During the contractual period of the transaction, the borrower has the legal right to redeem by paying the amount due at any time.
If the amount is not paid within the contractual period, the borrower loses the legal right to redeem but has an equitable right to redeem which must be exercised within a reasonable time as it is conferred by equity. The equitable right to redeem is only exercisable after the legal right to redeem is exhausted.
In law the borrower has unrestricted equitable right to redeem his security. Any provision in a mortgage or charge purporting to deny the borrower the equitable right to redeem is void.
This right must not be subjected to any conditions by the charge or mortgagee.
However, the equitable right to redeem is lost when the property is sold or a foreclosing order is made by the court. The right of redemption is exercisable by
- Any person having an interest in the property
- An executor or a signee
- A guarantor
- A judgment creditor
The equitable right to redeem must be distinguished from equity of redemption which is the residual interest in property conveyed to the chargee or mortgagee which is retained by the borrower. This interest is extinguished on foreclosure.
The equity of redemption enables the borrower exercise equitable right to redeem.