THE LAW ON CAUTIONS AND CAVEATS IN LAND TRANSACTIONS IN KENYA

1.0 INTRODUCTION

Land is the most important and valuable factor of production in Kenya. 80% of the total population relies on agricultural produce, and it is considered as a source of personal wealth and power. This is why quite a number of times people protect and fight for it as it is the major source of livelihood.

One method in which people protect their interest in property is through making use of Caveats and Cautions. This article explores the law on caveats and cautions in Kenya.

 

2.0  DEFINITIONS

2.1 MEANING OF CAVEAT

The word caveat means a warning or proviso (something said as a warning, caution, or qualification). The lodging of a caveat over a property is a way of telling anyone who wants to deal with the property to be aware of the fact that someone else’s interest already has priority. Therefore if there is a caveat on the property, whoever wants to perform any kind of dealing like buy, sell, lease out or anything is made aware of the fact that someone else already has interest in that land.

 

2.2 MEANING OF A CAUTION

This is a notice in the form of a register to the effect that no action of a specified nature in relation to the land in respect of which the notice has been entered may be taken without first informing the person who gave the notice.

 

3.0 WHO CAN PLACE A CAUTION OR CAVEAT

Any person who is claiming a contractual or other right over land amounting to a defined interest capable of creation by a registrable instrument, for example a lease, may lodge a caution with the Registrar against any dealing which is inconsistent with his or her interest. Entry of a transaction, with respect to such land, may not then be made unless the cautioner has received notice that the same has to be done. Lodging of a caveat or caution without reasonable cause can lead to a remedy in damages.

 

4.0 HOW TO PLACE A CAUTION

A caution is registered by a person who has an interest on a certain parcel of land to prevent any other person from dealing with the land in a way that prejudices the said interest. The effect of a caution is to forbid, to a certain extent, the registration of dealings and the making of entries in the register relating to the land without the cautioner’s consent or until the caution has been withdrawn by;

1.  The cautioner or;
2. Removed by order of the Court or;
3. The Registrar.

The registrar then gives notice in writing of a caution to the proprietor whose land, lease or charge is affected. So long as the caution remains registered, no disposition which is inconsistent with it shall be registered, except with the consent of the cautioner or by order of the court.

 

Section 71(1) of the Land Registration Act outlines the qualifications of a lodger. However, this is not an absolute right and the Registrar pursuant to Section 71 (4) of the Land Registration Act may reject a caution that is unnecessary or whose purpose can be effected by the registration of an instrument.

 

5.0 REGISTRATION PROCESS OF A CAUTION/CAVEAT

One requires the following documents:

1. The prescribed form (Form R.L. 22)
2. An affidavit explaining the interest the cautioner has in the land
3. A copy of the title (or the title number)
4. The prescribed fees

It is important to note that no notice is required to be given to the proprietor of the land before one lodges a caution. The documents are filed with the Registrar of Lands who then gives notice, in writing, of the caution to the proprietor whose land, lease or charge is affected by the caution.

 

6.0 WITHDRAWAL AND REMOVAL OF CAUTION

A caution can be removed by the person lodging the same, or by order of the court, or subject to Section 73 (2) of the LRA, by order of the Registrar, if such person fails to remove it after being served with a notice to do so by the Registrar.

 

According to Subsection 2 the registrar may, on the application of another person interested, serve notice on the cautioner warning him that his caution will be removed at the expiration of the time stated in the notice. If at the expiration of the time stated the cautioner has not objected, the registrar may remove the caution.

 

However, if the cautioner objects to the removal of the caution, they shall notify the Registrar, in writing, of the objection within the time specified in the notice, and the Registrar shall, after giving the parties an opportunity of being heard, make such order as the Registrar considers fit, and may in the order provide for the payment of costs.

 

7.0 EFFECTS OF LODGING A CAUTION OR CAVEAT WITHOUT CAUSE

Any person who lodges or maintains a caution wrongfully and without reasonable cause shall be liable, in an action for damages at the suit of any person who has sustained damage and to pay compensation to such person

 

This is because placing a wrongful caution that may lead a registered owner losing prospective clients would attract high damages and compensation. Cautions or caveats are temporary restraints that are lodged with the Registrar of Lands by people forbidding the transactions. Cautioners must prove that they are entitled to interests in the disputed property whose transfer they seek to forbid.

 

Section 75 of the LRA states that ‘Any person who lodges or maintains a caution wrongfully and without reasonable cause shall be liable, in an action for damages at the suit of any person who has sustained damage, to pay compensation to such person.’

 

8.0 SECOND CAUTION IN RESPECT TO THE SAME MATTER

The registrar may refuse to accept a further caution by the same person or anyone on his behalf in relation to the same matter as a previous caution.

 

9.0 CONCLUSION

Caveats and Cautions play a very important role in protecting property. It is however important that everyone understands when to use them and when not to use them, in order to avoid incurring legal liability.