Before purchasing land, there is need to conduct due diligence from persons independent of the transaction

Jennifer Nsubuga V Michael Mukundane & Shine Asiimwe, Court of Appeal Civil Appeal No. 208 of 2018, judgment delivered on 17th March 2023

Attention!

Due diligence “beyond

the parties to a transaction” is a prerequisite before purchase of property

Failure by a kibanja owner to register their interest with the registered proprietor invalidates any claim by the kibanja holder in relation to the property and failure by the kibanja holder to seek consent of the registered proprietor before selling their kibanja interest invalidates the sale

A survey report prepared by a non- registered surveyor is invalid

Background to the case.

This was a second appeal arising from the judgment in Civil Suit No. 246 of 2017(Makindye Chief Magistrates Court). The Suit was filed in the trial Court by the Respondents; alleging trespass by the appellant on the suit land. The trial Court dismissed the case and the respondents appealed to the High Court which overturned the findings of the trial Court and ruled in favor of the respondents. Being dissatisfied with the judgment of the 1st appellate Court, the appellant filed this appeal. The crux of the appeal regarded ownership of the suit land which was claimed by the appellant as hers and described as Plot 5568 and which the Respondents described as Plot 8543 both being on Block 273.The appellant claimed to have purchased the suit land in 2006 from the administrators of the estate of the deceased registered proprietor and a one Sheila Idrisa witnessed the sale. The respondents claimed to have bought the suit land in 2013 as a kibanja interest from Sheila Idrisa and before buying, they conducted the necessary due diligence and ascertained that there was no other owner of the suit land.

Judement of the Court

The Court of Appeal upheld the appeal and overturned the judgment of the first appellate Court. In a nutshell, the Court stated as follows:

1. Before concluding a purchase of land, it is most pertinent to conduct “an independent due diligence” to verify the title of the Seller. Failure to do this may lead to a purchase being void should other factors later arise which would have been ascertained had the said due diligence been conducted.
2. In the present case, had the respondents conducted additional due diligence and spoken to the Local Council for example, they would have ascertained that the land they subsequently purchased was one and the same as that of the appellant who had acquired it first in time.
3. Failure by the “vendor” to register her kibanja interest with the Registered Proprietor which was Buganda Land Board and her further failure to seek its consent before selling to the respondents rendered the sale void because it was contrary to Sections 34(3) and (9) of the Land Act Cap 227.
4. A survey report prepared by a non-registered surveyor is invalid and inconsequential when tendered in evidence.

Effects of the court’s judgement.

The Court of Appeal has clearly reiterated the interest of a kibanja holder in the hierarchy of land ownership. It is at all times subject to the legal interest of the registered proprietor. The Court has further reiterated the need for additional due diligence before purchase; a position which has oscillated from case to case.

Concluding Observationas

In as much as the emphasis of the principle relating to the interest of a kibanja holder is applauded, concern still abides in relation to the need for due diligence “outside the register.” This concern stems from the conflicting law and jurisprudence on the issue. We would therefore advise a prospective purchaser for the avoidance of any doubt, to always carry out that extra due diligence which shall cushion them in the event of any dispute.

Disclaimer: No information contained in this alert should be construed as legal advice from Namara Musinguzi & Co. Advocates or the individual authors, nor is it intended to be a substitute for legal counsel on any subject matter

Prepared By:

Ann Namara Musinguzi (Managing Partner)

ann@namaramusinguziadvocates.com

Ainomugisha Anita ( Legal Associate)

anita@namaramusinguziadvocates.com