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Talking Property Law with Gerald Mukomondo; Property Rights

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Talking Property Law with Gerald Mukomondo; Property Rights



In my introductory article I mentioned that other than for personal use, property is acquired for the purposes of storing wealth as well as income generation. I also dealt in passing with the issue of economic value in immovable property. Value in a property is in what you can and cannot do with the property. The value of a property depends largely on the nature of the property and the rights or entitlements of the holder over the property. This article will be talking to the aspects of property rights and their relationship to economic value.
It should be understood that there are property rights and rights to property. Property rights refer to a group of entitlements over a property which can be varied or limited depending on the rights in question. Property rights can be real rights, limited real-rights or personal rights. On the other hand, rights to property are the entitlements as provided for in section 71(2) of the Constitution which include the right to acquire, hold, use, occupy, transfer, hypothecate, lease or dispose of. These rights when summarized mean the right to private ownership, occupation, use and possession. For ease of comprehension of this article the Constitutional rights to property shall therefore be referred to as entitlements, and the usual property rights shall be referred to as rights.
The most noteworthy property right is the real right. A real right is enforceable against the entire world. It is an exclusive property right which carries all the Constitutionally provided entitlements over property. A real right over a property is conferred through a tittle deed, issued through the Deeds Registry office and regulated by the Deeds Registries Act. This is the most secure property right and is suitable for long term investment. Properties which carry real rights through tittle deeds are usually the most expensive and complex to transact. Despite being exclusive a real right is not immune to legal limitations.
The most common limitation to a real right is the state powers of compulsory acquisition. Compulsory acquisition is administered through the Land Acquisition Act. According to the Act the President or any Minister can compulsorily acquire any land for the purposes of among others; defense, public safety, public order, public morality, public health, town and country planning, forestry, environmental conservation, wildlife or for other natural resources. The test for appropriateness of compulsory acquisition according to the Act is reasonable necessity. Compulsory acquisition is prevalent with agricultural land. Reasonable notice and fair and adequate compensation are prerequisites before an acquisition can be effected. In the event of a contested acquisition the acquiring authority is supposed to proceed by way of court application whereupon the holder, occupier or owner is given a chance to make representations in respect of their objections.
Other than the real right there is the limited real right. A limited real right is an entitlement in another person’s property which does not provide ownership. A limited real right limits the right of the holder of the entitlement as well as that of the owner of the property. It gives the right to occupy, possess and use over the property. This right is conferred to a third party through some form of agreement or relationship between the parties. The common agreements or relationships which creates a limited real right includes mortgages, leases (over ten years), mineral rights as well as servitudes and restrictive conditions. A limited real right is compulsorily registerable with the Deeds Registry. When a limited real right is registered the Deeds Registry will endorse such third party interest through a caveat. There is no transfer of ownership which can be done until the caveat has been lifted.
Last but not least, there is a personal right, this form of right relates to an entitlement/s held in another person’s property as a result of some form of legal relationship such as a contract. A personal right is enforceable only against a particular person and the basis would be the legal relationship. It confers the right to occupy, possess and use. Unlike a limited real right, personal rights over property are not registerable with the Deeds Registry. This therefore means that the owner of the property can not be precluded from disposing of the property by any law however, it will be improper not to consider personal rights held by other people over the property. Unlike with limited real rights, personal rights can exchange hands easily provided the terms are agreed to comprehensively.
A common form of a personal right over property is a cession. A cession confers personal rights to the individual paying for the stand but the property remains owned by the issuing local authority or entity. A cession can however mature into a freehold. Its common practice that after the purchaser or holder of a cession has paid for the stand in full from the local authority and has satisfied the requisite developments the purchaser can thereafter apply for tittle deeds. On another note, besides council stands, rural land, communal land and most agricultural land is also held through personal rights. Personal rights over rural, communal and some agricultural land are not registerable, unless gazetted otherwise they remain vested in the state.
This article is a successive part of a simplified series of an outline and discussion of property law. Join me in the next column when I will be talking about methods of acquiring ownership/tittle of immovable property.
Mr. Gerald Mukomondo is a registered Legal Practitioner and a judicious researcher with interests in commercial law. He writes in his personal capacity. The content of his articles should not be taken as legal advice.
He is contactable via email @ [email protected]

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