CAPACITY OF NON-CITIZENS TO HOLD ABSOLUTE TITLES TO LAND IN KENYA

INTRODUCTION

The Constitution of Kenya at Article 40 gurantees the right to property to ALL persons, whether citizens or non-citizens. The right to acquire and hold interest in land is envisaged within this provision.

This right, like most other rights, is not absolute. For instance, whereas one may acquire and own property of any description in any part of the Kenyan territory, the law grants the State the power of eminent domain (and or compulsory acquisition) over private property if the same is deemed necessary in public interest (subject to payment in full and just compensation and the right to access to court for redress).

HOLDING OF TITLES TO LAND BY NON-CITIZENS

The issue of land holding by non-citizens is adequately envisaged under Article 65 of the Constitution of Kenya 2010, which is to the effect that non-citizens can hold interest in land provided that such interests are restricted to LEASEHOLD INTEREST and no more. In addendum, the lease term must not exceed a period of more than 99 years (See Art. 65 (1) of the Constitution of Kenya, 2010), and should any agreement purport to covenant a longer duration, such leases would be contrued as 99-years lease for all intents and purposes (See Art. 65 (2) of the Constitution of Kenya, 2010).

As such,  an agreement for the sale of a freehold title to a non-citizen would be illegal and or enforceable. However, an agreement granting a lease for over 99 years would not necessarity be illegal but the lessee will be entitled to a 99 year lease notwithstanding covenants to contrary in any deed or agreement between the parties.

CONCEPT OF TRUSTEESHIP IN LAND HOLDING

The Former Constitution of Kenya did not purport to restrict land holding by non-citizens. This was due to the fact that contemporary challenges in property acquisition and manner of their use in the country had not been contemplated.

However, with real challenges such as scarcity of land for the local poulation, terrorism, money laundering and influx of illegal migrants into the country (some of whom are adequately resourced), the drafters of the Constitution were creative in sealing loopholes for attempts by non-citizens to hold freehold titles to land. Article 65 (3) of the Constitution envisages and thwarts possible avenues for maneuvers by unscrupulous non-citizens to acquire freehold titles, for instance, through the use of corporate entities whose shareholding are held by citizens to acquire freehold titles.

In company law, the case of Salomon v. Salomon [1897] AC 22 established the principle  of corporate personality - that a company is a distinct entity seperate from its owners/shareholders, and will all rights like any human person, including right to hold property. And with the invention of the concept of trusteeship, non-citizens would easily incorporate companies with Kenyan citizens as shareholders/directors subject to underlying Trust Deeds and Rights Deeds. The twin documents would often recite that all shares in the company are held in trust for a third party (non-citizen).

In view of such possibilities, the Constitution considers a corporate body as a citizen (and therefore entitles to Freehold Title) if the same is WHOLLY owned by one or more citizen. Property held by a corporate entity will also be considered as held by a Citizen only if the BENEFICIAL INTEREST in the TRUST PROPERTY is held for the benefit of A CITIZEN.

CONCLUSION

Whereas non-citizens can hold leasehold interest over land in Kenya, the law expressly outlaws holding of freehold interest by non-citizen. As such, any attemp to enter into a transaction for the holding of freehold interest in land in favour of a non-citizen would be based solely on good faith, for which no court of law will enforce (for ILLEGALITY - being contrary to express provisions of the law, and the Court will not assist a party enforce an illegal contract - See generally Cope v Rowlands (1836) 2 M & W 149).

In view of the above, it would be easy to proclaim that the Constitution of Kenya is discrimatory as against non-cititens in respect of right to hold freehold titles. Interestingly, however, a careful construction of Article 27 (4) of the Contitution reveals that it prohibits discrimination on the basis of "race, sex, pregrancy, marital status, health status, ethnic or social origin, colour, age, disability, religion, conscience, belief, culture, dress, language or birth" BUT does allow discrimination on the basis of Nationality or Citizenship, albeit tacitly. As such, an argument as to the unconstitutionality of such discrimination would be unsustainable in law.

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Teddy OKELLO
Centre for Legal Research & Policy Development, a participating consultancy firm in the SLS Group of consultancies.