THE LAW OF PROPERTY NOTES

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 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 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:

  1. Sole ownership
  2. Joint ownership
  3. Common ownership

 

SOLE OWNERSHIP

The land in question is owned one person who exercises all the rights in relation to it

JOINT OWNERSHIP

A situation where property is owned 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 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:

  1. Estate
  2. Servitude
  3. 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 inheritance or otherwise. The rights it confers can be transmitted to future generations.

Freehold estates include;

  • Free simple
  • Free tail
  • Absolute proprietorship
  1. 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 deed or 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 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
  1. 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 inheritance

  1. ABSOLUTE PROPRIETORSHIP

Created 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 the Act. The person to whom the land is registered becomes the absolute owner to the exclusion of all others. This estate is illustrated the decision in Obiero V. Opiyo. The registration terminates all customary rights previously exercisable on the land.

Creation of Absolute Proprietorship

  1. Registration after Adjudication
  2. Conversion from other registers
  • Transfer
  1. Inheritance
  2. Consolidation

Examples of fee simple

  • Life Estate

An estate which lasts for the life of the grantee and is created 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 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 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

  1. 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.

  1. Defined premises

The premises to which the tenancy or lease refers must be defined or ascertained. It must be identifiable reference to the agreement. It was held in Heptulla V. Thakore.

  1. 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

  1. Scope of grant or Quantum of Rights

The bundle of rights conferred 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 wherethe 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 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:

  1. Duty to Pay the Rent Reserved

It is obligation of lessee to pay the rent as agreed. Such rent is payable irrespective of occupation.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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 a notice given the lessor.

  1. Duty to Make Material Disclosure

The lessee is bound to inform the lessor of any external interference third parties or of any action he is about to take which affects the value of the premises

  1. 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

  1. 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-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 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 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 statute. On doing so the lease terminates.

A Lease differs from a Licence in that traditionally, licence is permission given 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 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:-

  1. Easements
  2. Profit apprendre
  • Restrictive covenants

EASEMENTS

A right attached to a parcel of land which allows the proprietor of the land either

  1. To use the land of another in a particular manner
  2. 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 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 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 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

  1. Lapse of Time

Under the Registered Land Act, an easement terminates on expiration of the prescribed duration.

  1. Occurrence of an Event

The Registrar of lands is emto cancel the registration of an easement on application the party affected any breach of its terms

  1. Unity of Seisin

Acquisition of full ownership of both the dominant and servient tenements the grantee or some other person destroys the easement.

  1. 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.

  1. Release or Abandonment

A grantee may executing a deed abandon the easement to the grantor thereterminating the same.

  1. Judicial Discharge

Under Section 98 of the Registered Land Act, the court is emon application 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 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:

  1. Express grant
  2. Prescription law

May be terminated by:

  1. Release/Abandonment
  2. Unity of Seisin

RESTRICTIVE COVENANT

An agreement 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 agreements which are registerable under the law.

They are terminable 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:

  1. Simple mortgage

A mortgage transaction wherewithout 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.

  1. Mortgage conditional sale

A mortgage transaction wherethe 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.

  1. Usufructuary mortgage

The lender (mortgagee) takes possession of the mortgaged property and uses the proceeds to repay himself

  1. 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.

  1. Anomalous Mortgage

Created Section 98 of the ITPA. The rights of the parties and other terms and conditions of the transaction are determined the mortgaged instrument.

  1. Equitable Mortgage

Created 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

  1. To repay the principal sum and interest
  2. To pay all taxes and rates
  3. To honour previous obligations if the charge or mortgage is a subsequent transaction
  4. To keep the premises in repair
  5. To insure the property in the joint names of the parties
  6. To farm according to the rules of good husbandry in case of agricultural land.
  7. 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 the registrar

REMEDIES OF MORTGAGES AND CHARGES

  1. Foreclosure

A Court order which denies the borrower the right to redeem his security. The remedy may be availed the court after the mortgage debt is due but before redemption. It is provided for section 67 of the ITPA

  1. Appointment of Receiver

A mortgagee/ chargee is emto appoint a receiver to take over the security given 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 the receiver must be applied to pay rates and taxes, prior mortgages, any commission payable, insurance premium, interest payable under charge/mortgage

  1. Statutory Power of Sale

The power of mortgagee or charge to sell the mortgaged property in the event of default the borrower. This right is exercisable if:-

  1. There is no contrary provision in the mortgaged instrument
  2. Borrower’s signature has been attested to 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.
  1. Consolidation

The equitable right of a chargee holding several charges to insist that all be redeemed together.

This right is only exercisable if:-

  1. The mortgages had been executed the same borrower
  2. The charges are held the same chargee
  3. There has been default in respect to all of them
  4. The securities are still in existence
  5. The right to consolidate is expressly reserved the instruments
  6. 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: –

  1. The mortgagee/ borrower has executed a personal covenant to repay
  2. Security provided is destroyed a wrongful act or default the borrower
  3. 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 common law and equity. During the contractual period of the transaction, the borrower has the legal right to redeem 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 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 the charge or mortgagee.

However, the equitable right to redeem is lost when the property is sold or a foreclosing order is made 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 the borrower. This interest is extinguished on foreclosure.

The equity of redemption enables the borrower exercise equitable right to redeem.

 

 

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