Why on-ground due diligence is necessary before buying land

Can you expound on the new requirement of securing a building permit. What exactly does it mean for a land owner or buyer?

The Ministry of Works and Transport unveiled new Building permit requirements under the Building Control (fees) Regulations 2020.  The peculiar aspect of these regulations is that all cities, Municipalities and town councils and villages will pay uniform fees irrespective of location and level of development. For instance, a developer in the new city of Gulu would pay as much as a developer in the upscale area of Kololo in Kampala. The fees have not taken into consideration the other aspects of development such as value of land, location and level of economic activity in a given area. This in my view may prove counterproductive as developers will find ways to avoid what may be viewed as an unfair levy.

Secondly, all permit fees collected are to be remitted to the central Government. This may prove to be a disincentive to the local authorities who will not see a direct benefit in collecting these fees.

What should you consider when buying land?

When buying land, there are a number of factors to look at. First, is the land titled or a “Kibanja?” Is it leasehold or Mailo land or freehold. In the case of titled land, you would have to ensure that what appears on the title corresponds with what is on the ground in terms of acreage and location plus actual possession, meaning is the seller of the land actually in physical possession of that land. One would also have to do a search at the registry of titles to confirm authenticity of documents. For non-titled land an on ground due diligence is critical plus ascertainment of the actual land lord so as to get consent to transact otherwise you stand to enter a void transaction

What are the risks involved?

The risks involved in purchase of land are primarily two. The first is the danger of purchasing land from an imposter who is not the actual owner. Secondly, in the case of titled land, proceeding to purchase on the basis of fake documents e.g. a forged land title.

How should you guard yourself from these risks as a buyer?

To mitigate these risks, always do an in-depth due diligence. Irrespective the type of land always visit the actual location and engage both the neighbors and the local authorities. If land is titled also do a search at the land registry and engage a surveyor to do both a location survey and a boundary opening to ascertain location and acreage.

Speaking of land valuation, how exactly is the real value arrived at?

Land valuation is in fact technically a science of sorts and is done by registered land valuers. It primarily takes into consideration the size and location of a parcel of land, the developments thereon and the going market value of land at the time.

How exactly can you do due diligence when buying land in Uganda?

On due diligence. Ensure that you do a physical visit to the actual location of the plot. Engage the neighbors and immediate communities and the local authorities-LCs. If land is not titled seek to find history of ownership for instance how did the current owner acquire the land. Where land is titled do a search at the registry of lands to ascertain that document is not fake and also engage a surveyor to confirm to you both acreage and location as per land title.

What challenges are associated with land transactions?

The biggest challenge in land transaction is the level of fraud. This is widespread and very often, it involves the very persons or offices which are charged with protecting the populace from it. To compound this, our police and judiciary are so overloaded that the dispute resolution is slow and costly.

When buying land, how does one know whether they are not getting conned?

The only way to ascertain that you are not being defrauded would be to take the steps of effective due diligence that I have highlighted above.

Legal representative

When should you use legal representation in the process of acquiring land?

The moment you decide to purchase land, retain the services of a lawyer to help you coordinate various aspects of due diligence. The cost of legal services would depend on the magnitude and complexity of the transaction and your ability to negotiate a comfortable fee.

Should you hire a land surveyor for the land search? If so, what are the estimated costs?

Whenever you are purchasing titled land, I would advise that you engage a surveyor to confirm boundaries and actual location. Survey fees are not usually very high. But this would also be dependent on the scale of the transaction. With regard to average sized plots in Kampala this may cost you between Shs400, 000 and Shs800, 000 for these tasks.