1.0 Introduction/General Overview
This is a question that many foreigners who have or had intentions and interest in investing in Kenya have to ask themselves before committing to any investment in the county.
Prior to the promulgation of the new Constitution, there existed a misconception in Kenya that a foreigner cannot own land in Kenya and the law was not clear on ownership of land by foreigners and the rights they enjoy as landowners in Kenya. This led to many foreigners who were interested in owning land in Kenya to make arrangements like acquiring land through proxies or third-party nominees which led to many of them losing their land or being duped.
This was the case in Hartmann v Mbogo (Civil Case 222/2007) where the Plaintiff jointly registered the Property with the Defendant on the Defendant false representation that a foreigner alone cannot own land in Kenya.
2.0 Are there any Laws in Kenya Governing Land Ownership by Foreigners?
2.1 Legal Analysis
Article 40 of the Constitution of Kenya 2010 grants the right of ownership of land to any person in any part of Kenya meaning that any one in Kenya whether a Kenyan citizen or a non-citizen can own land in Kenya. The said Article 40 is however subject to and is to be read with Article 65 (1) of the Constitution which sets out restrictions to the limitations as to the land tenure which a non-citizen can own. The distinction of land acquisition in Kenya for a foreigner or non-citizen and a Kenyan citizen lies in the tenure which the property can be held and some restrictions on ownership of agricultural land by foreigners.
The Parliament has passed several laws relating to ownership of land in Kenya. Land Registration Act No. 3 of 2012, Land Act no.6 of 2012 and the National Commission Act.
Therefore, the position of Land ownership by foreigners in Kenya is clear in that they can own Land and the only limitation is the tenure which they can hold land limiting them to a Leasehold of not more than Ninety-nine (99) years.
2.2 Legal Provisions
There are various that govern land acquisition and ownership of land by foreigners in Kenya and they are as follows: –
2.2.1 The Constitution
The Constitution under Article 65 limits the tenure which the foreigners can hold land to only Leasehold of less than 99 years. It is imperative to note that contrary to earlier views based on wrongful interpretation of the Article 65 of the Constitution, there is no prohibition of foreigners acquiring or owning freehold land. The constitution only restricts ownership to a leasehold of 99 years.
This position was upheld by the High Court in the case of Kunde Road Residents’ Welfare Association Versus Deshun Properties Company Limited & Four Others (ELC PETITION NO. 1433 OF 2013). Justice Gacheru observed that:
“…The Constitution at Article 40 guarantees ownership of land in Kenya by any person. Granted, this provision is not absolute as it is subject to Article 65 thereof which restricts land to be held by noncitizens only as leasehold of a term of 99 years and no more. Article 65(2) of the Constitution, in my view, envisages a situation where non-citizens can enter into transactions for acquisition of interest in land that is freehold. Indeed there is no law that prohibits non-citizens from acquiring and owning freehold land, the Constitution however restricts that ownership to leasehold of a period of 99 years. It is therefore my finding that the transfer of the property in question, though the interest therein being freehold to the 1st Respondent being a non-citizen is not illegal as alleged. The bottom line is that the 1st Respondent has acquired 99 year leasehold interest…”
In the event that a Kenyan citizen sells the freehold interest to a foreigner and the freehold tenure is converted to Leasehold the property cannot be converted again to freehold tenure after the expiry of the leasehold term.
The Constitution also restricts a non-citizen from owning freehold property under a trust and provides that any property held in trust shall be regarded as being held by a citizen only if all the beneficial interest of the trust is held by people who are citizens.
After the expiry of the Leasehold term the foreigner can apply for a renewal of the Lease term or an extension of Lease. Unlike citizens, foreigners do not enjoy an automatic right of renewal or extension of a lease on expiry. Section 12(7) of the Act provides that upon expiry, termination or extinction of a lease granted to a foreigner, the land shall vest in the government.
2.2.2 The Land Act
Section 12 (5) of the Land Act allows the National Land Commission to allocate land to foreign governments on a reciprocal basis in accordance with the Vienna Convention on Diplomatic Relations. This is however subject to the Constitution and any other relevant law and consultation with the National and county governments.
The Act was amended in 2016 to introduce a new section – 12A – which requires foreigners to obtain consent to purchase 1st and 2nd row properties. This was however challenged in court leading to suspending the application of these sections until the matter is fully heard. More details are under Section F below.
2.2.3 Land Registration Act
The Land Registration Act in section 107 (3) reiterates the provisions of Article 65 of the Constitution that the maximum leasehold period that may be granted to a foreigner is 99 years.
2.2.4 Land Control Act
The Land Control Act (the Act) restricts the ownership by non-citizens of agricultural land or land within land control areas The Act in section 9 as read with section 6 provides that any dealing in agricultural land or controlled land the purported effect of which is to sell, transfer, lease, charge, partition or exchange land with a non-citizen is void for all intents and purposes.
There are two ways in which a foreigner can own agricultural land;
· Through an application for exemption to acquire agricultural land by the President under section 24; and
· Through owning shares in a public company that owns agricultural land.
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