OFFICIAL SEARCH NOT ENOUGH DUE DILIGENCE WHEN BUYING LAND IN KENYA

“Courts should nullify titles by land grabbers who stare at your face and wave to you a title of the land grabbed and loudly plead the principle of the indefeasibility of title deed…It is quite evident that should a constitutional challenge succeed either under the trust land provisions of the Constitution or under the doctrine of public trust a title would have to be nullified because the Constitution is supreme law and a party cannot plead the principle of indefeasibility which is a statutory concept.”

These are the words of Maraga J. (as he then was) in the case of Republic v. Minister for Transport & Communication & 5 Others Ex Parte Waa Ship Garbage Collector & 15 Others Mombasa HCMCA No. 617 of 2003 [2006] 1 KLR (E&L) 563 and emphasized by the Supreme Court in Dina Management Limited v County Government of Mombasa & 5 others (Petition 8 (E010) of 2021) [2023] KESC 30 (KLR) (21 April 2023) (Judgment)

In its decision the Supreme Court emphasized on what a bona fide purchaser must proof in order to fulfill the doctrine of innocent purchaser for value. In petition No. 8 (E010) OF 2021, the appellant (Dina Management Limited) contended that it was a bona fide purchaser of the suit property, having purchased it from Messrs. Bawazir & Co. for Kshs.18,000,000.00. That it was a second purchaser and acquired a valid and legal title, having carried out all the necessary due diligence and paid valuable consideration for the purchase of the suit property. That for these reasons, its title was indefeasible and protected under Article 40 of the Constitution.

Dina Management Limited further averred that in carrying out due diligence, it sought confirmation from the relevant government registry that a valid title capable of transmission to it existed. It was its case that the consent to transfer was sought and obtained from the Ministry of Lands who also confirmed the validity of the title to the appellant vide the letter dated 9th October, 2006 stating that “the above plot is the genuine plot”. Further, it states that it obtained a beacon certificate and survey plans to determine the boundaries and extent of the property vide the letter dated 25th August, 2010. It asserted that neither the national government nor the local government questioned its title but confirmed the validity or legality of the title, making the it the bona fide purchaser and its title remains indefeasible.

The Supreme Court in ruling otherwise, defined a bona fide purchaser as:

“One who buys something for value without notice of another’s claim to the property and without actual or constructive notice of any defects in or infirmities, claims, or equities against the seller’s title; one who has in good faith paid valuable consideration for property without notice of prior adverse claims.”

The Supreme court further while quoting the Court of Appeal in Uganda in Katende v Haridar & Company Ltd[2008] 2 E A 173, stated that for a purchaser to successfully rely on the bona fide doctrine he must prove that:

1. he holds a certificate of title;
2. he purchased the property in good faith;
3. he had no knowledge of the fraud;
4. he purchased for valuable consideration;
5. the vendors had apparent valid title;
6. he purchased without notice of any fraud; and
7. he was not party to the fraud.”

The Supreme Court then stated that where the registered proprietor’s root title is under challenge, it is not enough to dangle the instrument of title as proof of ownership. It is the instrument that is in challenge and therefore the registered proprietor must go beyond the instrument and prove the legality of the title and show that the acquisition was legal, formal and free from any encumbrance including interests which would not be noted in the register.

From the record and submissions, we note that the land was first allocated to H.E. Daniel T. Arap Moi in 1989. The applicable law at the time was the Land Planning Act, Cap 303, which was repealed by the Physical Planning Act Cap 286 which has since been repealed by the Physical and Land Use Planning Act No.13 of 2019. The Land Planning Act made provision for open spaces. Regulation 11(3) of the Development and Use of Land (Planning) Regulations, 1961 made under the Land Planning Act defined “public purpose” as any non-profit making purpose declared by the Minister to be a public purpose and includes educational, medical and religious purposes, public open spaces and car parks; and Government and local government purposes. Similarly, under the Physical Planning Act, Section 29 gave the local authorities power to reserve and maintain land planned for open spaces.

The suit property was at the time designated as an open space. Having been designated as such, it was rendered a public utility and could not be described as unalienated public land as urged by Dina Management Limited. It was therefore not available for alienation to H. E. Daniel T Arap Moi or for further alienation.

Dina Management Limited therefore ended up losing the property for lack of extensive and proper due diligence search.

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