Wednesday February 24 2016

What to consider before buying property from agencies

In 2016, property fetched less money as

In 2016, property fetched less money as compared to land because the rent charges were high. File photo 

By Esther Oluka

In 2014, Hossanna Real Estates was caught in a storm when police intensified investigations into its alleged cheating claims of clients.
This was after a number of their customers alleged that the company had defrauded them by theft, uttering and making false documents as well as impersonation. This included refusing to give them land titles after paying their money.
Derrick Waiswa is a complainant who says he was once duped by the company. After paying Shs4.7 million for two plots of land in 2011 somewhere in Kakiri in Wakiso District. The 43- year-old alleges that Hossanna Real Estates conned him by allocating him land that belonged to someone else.

“I got to discover one day while inspecting the place by myself. A man with a bulky physique confronted and shouted, “Why are you snooping around on my land? This is a restricted area. Leave this place now,” Waiswa says.
Upon hearing such claims, Waiswa defended himself by mentioning that the land was allocated to him by Hossanna Real Estates. When the stranger asked him to prove ownership by presenting a land title, Waiswa lost words because he did not have any.
“I was disturbed when the man mentioned that I was trespassing on his land in that we ended up having a quarrel,” Waiswa says.

Troubled, Waiswa stormed the Estate’s offices the following day demanding answers but was told that management would handle the issue at a later stage.
“Since the management kept dodging me for several months, I was forced to report the case to Wandegeya Police Station where I discovered that several other people had filed complaints against the same real estate company,” he says. “Despite police swinging into action, the estate never intervened in that particular land dispute. Even when I asked for a refund, I never got it.”

Waiswa eventually withdrew from pursuing the case because it wasted a lot of his time and energies. The businessman did not also bother taking the matter to court because of the additional costs he could incur paying a lawyer.
The company’s actions finally caught up with it as Daily Monitor reported on February 12, 2014 that three of the company’s directors were on the run over allegations of fraud and obtaining money by false pretence.


Despite the fact that issues of fraud continue brewing up in some real estate agencies, certain individuals think they remain the safest way of buying land or any other properties in the country.
Jerry Iga, 45, is one of such people.
“Working with agencies is more effective as it saves a lot time and money since they take care of the biggest load. I would rather deal with them than do the work by myself or with brokers who sometimes tend to be very unreliable,” Iga says.
To supplement this, Adnan Mpuga, the operations manager at Eastlands Agency Real Estate, which has been in operation for over 20 years now, says agencies are very important as they tend to handle the most complicated processes involved in acquiring propriety.

“Some of our key responsibilities include double checking and verifying things such as land titles, history of the property, consult the parties involved as well as avail contacts that one may need and these may range from surveyors, builders, engineers to interior designers,” he states.
Mpuga adds that since agencies have a wider knowledge of the real estate market, they easily help clients make appropriate decisions on whether to purchase, sell or rent out their property.

“Whenever clients involve us in handling their property, we ensure to evaluate the pros and cons of the offer and where we find loopholes, we advise the client on what they should d0 in order to get a good deal,” he states.
Another important key role these agencies play is negotiating prices for properties.
“Sometimes when individuals decide to handle business by themselves, they overwhelmingly get cheated because they lack the knowledge of the market, “he says. “ In fact, we have had clients running to us after being conned by impostors of their hard earned money.”
Save yourself a lot of trouble by using services of agencies, Mpuga notes.

The four types of land tenure

When buying land, it is important to know the type of tenure that land is under.
Denis Obbo, the spokesperson of the Ministry of Lands, Housing and Urban Development, says there are four types of land tenure in Uganda, clearly spelt out by the constitution. Mailo land tenure, freehold tenure, leasehold tenure and customary tenure. Obbo says one ought to be conversant with the nitty-gritty of these tenures before buying land under any of them.

Freehold tenure
The Land Act 1998 defines freehold tenure as a tenure that bestows upon someone ownership of registered land in eternity –which Obbo says means “owning the land forever,” he explains that this type of tenure was set up by the 1900 agreement between Buganda and the British colonial government. The Land Act specifies that the holder of land in freehold has full power of ownership, which means they can use it for any lawful purpose and sell, rent, lease, dispose of it by will. Obbo says tenure is pursued directly through the government authorities –where the Sub-county land office, the district land office and the zonal office of the Ministry of Lands are all involved.

Mailo tenure
Yusuf Nsibambi, a lawyer, says this type of tenure is predominantly in Buganda, with some minimal parts of Ankole, Bunyoro and Toro sub-regions having it. He describes Mailo tenure as one where permanent ownership of a large plot of land belongs to landlords who acquired it through the 1900 Buganda agreement, while at the same time tenants on the land are recognised and they also have rights to live on and utilise the land.

Nsibambi explains, “Under Mailo land tenure, owners have perpetual ownership and are free to sell or pass on their rights to their heirs. On the side of selling, many mailo holders have since 1900 sold off their holdings, to such an extent that the Ministry of Lands estimates the number of owners to have risen to over 200,000 today –courtesy of many having inherited or bought parts of what was previously one piece of land, thereby causing its subdivision,” the lawyer says.
Ministry of Land’s Obbo says it is important to note that there are no more new titles issued for land under Mailo tenure, because all titles were issued prior to 1928. He says what is done today is only further subdivision of the existing titles which were issued prior to 1928, as well as changing the names on the titles in cases where ownership is being transferred.

Customary tenure
Obbo says with the exception of Buganda which is mainly held under Mailo, land in other parts of Uganda is held mostly under the customary tenure. He says the Land Act of the Constitution describes this tenure as one where land is owned communally, by a clan, or a tribe, among others.
Obbo explains that with customary tenure, obtaining of a private certificate of title is possible for individuals, whereby they simply have to agree with the community that owns the land (the clan or tribal chiefs), then the Sub-county and government land boards take up the process of issuing the title. The constitution also provides for turning of an individual on communal tenure into one on freehold, and leasehold can also be issued by owners to tenants under this tenure.

The 1998 Constitution describes leasehold tenure as one where one party grants to another the right to exclusive possession of land for a specified period, usually in exchange for the payment of rent. Under this type, a land owner (whether through freehold, Mailo or customary tenure) grants a lease to another person.
Additional information by Joseph Ssemutoke

Lawyer's take

As much as it is safer dealing with property agencies, Muhammad Kikomeko, a lawyer and partner with KM Advocates and Associates says you ought to be very careful.

Background check
“It is always important to work out your own due diligence and not to take assurances you get from the property agencies before purchase as the gospel truth. For example, in case of land, despite all assurances from the property agencies, one needs to go and secretly carry out a search on the land of interest with the respective land registry where the land is located,” Kikomeko says.

“As one does this, they need to find out whether the land is completely vacant or if there are any developments.”
In addition, Kikomeko says you need to check and make inquiries from the area local council authorities as to ownership of the suited land. Area local authorities always have all information on land within their areas.

Then for costly land where the buyer is going to part with huge amounts of money, Kikomeko says it is always advisable not to pay the whole amount upfront.
“It is prudent that the buyer pays an instalment and later attaches their presence by putting things like building materials on the land to see if anyone will come out to lay claim on the land,” he says.

Get own surveyor
Other than that, Kikomeko notes that it is also very important that you engage your own surveyor to establish whether the land you want to buy is exactly located on the site the agency is showing you. This is a given fact that most of the land agencies buy huge tracts of land and divide them into very many same sized portions for sale.
“Problems of selling someone a portion different from location on land title grid are very common. This problem may be out of mistake or scrupulousness on the part of the agency.

Therefore, it is important that the buyer thoroughly double checks in order to avoid developing a different place from what they purchased,” Kikomeko says.
Kikomeko summarises by noting that property agencies in Uganda have not yet developed to the level of agencies in the western world, a number of them are facing challenges of unscrupulousness and dishonesty, hence prospective buyers most especially those in the diaspora should be very careful when dealing with them. Buyers must always exercise caution.