Why a sales agreement matters in land transactions

A view of Buddo in Wakiso District where most land owners have Buganda land agreements . PHOTOs/ Gabriel Buule

What you need to know:

  • Like land titles, agreements of sale are not immune to fraud. They too can be falsified. But there are ways to make them fraud-proof.
  • It is prudent that the agreement is written and have it witnessed by at least two other people

It is one thing to use land, and another to prove your ownership of it. And that is the mother of wrangles. Churches, mosques, schools, hospitals and other important social amenities have been closed or demolished in the middle of disputes.

“Do you have the title to the land? One party asks.

“No,” the other answers, on the brink of losing claim of ownership. Yet something like a sales agreement could have come to their rescue. But they don’t have it. Or it is vague if not verbal.

What it is

All land titles are registered under the Registration of Titles Act.

Experts say it is vital to have proof of agreement between seller and buyer whether or not the land in question is registered, to minimise fraud.

Milly Nassolo Kikomeko, an expert in land matters, says a sales agreement, sometimes called agreement of sale, is “a protective gear” because it is the backup you have against fraud, a common plague in land issues.

“It helps you show proof that whatever happened, you agreed with someone else. And in case of no title, the agreement helps you show proof of interest in land,” she says.

According to the Land Act, the title is the proof of ownership and in case you want to transfer land, it is the title that is transferred.

“However, in case there is no title, an agreement of sale is as good as the titles,” she says.

“It is proof that the previous owner of the land transferred their rights to you through the agreement.”

 While a land title gives the holder a legal interest in the land, a sales agreement gives the buyer an equitable interest, just like a spouse, child or administrator has in a particular land.

“That means whoever wants to deal in that land—sell or develop it—must settle with you, first.”

The parties

A sales agreement is basically between the seller and the buyer of the land in question.

However, Nassolo says, it depends on who owns the land.

“If it’s a family land, then definitely there are more people involved in the ownership who should as well be involved in the agreement.”

How then does an intending buyer ascertain that the intending seller is the sole owner of the land in question before the agreement is done?

Nassolo says the intending buyer must do a physical search about the land they intend to acquire to ascertain its exact boundaries and dimensions, among other relevant aspects. She says it is relevant to talk to as many neighbours as possible and the local area leaders to find out “who really owns that land? How they acquired it? Are there any conflicts about it, among other questions, before one makes the decision to enter the agreement.

“In case the land is titled, you must crosscheck with the district registry to ascertain whether the person selling is the one on the title,” she says.

Nassolo debunks the assumption that Local Council I leaders should be party to the agreement.

“It’s not a must that they should endorse the agreement of sale, because there’s no law that says so.”

However, she acknowledges that because the LC I [chairperson] is involved in almost every land transaction in the area and might have lived in the area for some good time, they might know more regarding the land in question and the seller(s). “That’s why it is safer to have them involved in business, though it’s not compulsory.”

What’s more the agreement is transferable. For instance, if the land owner who acquired the land by agreement dies, their child can take over their deceased parent’s interest in the land which is proved by the existing sales agreement.

Make it fraud-proof

Like land titles, agreements of sale are not immune to fraud. They too can be falsified. But there are ways to make them fraud-proof.

Nassolo suggests that while the principal parties are the buyer and the seller, it is prudent important the agreement written and have it witnessed by at least two other people. Each witness must present a valid identification document like a National ID.

“And if you need to make any transfers of that agreement, make sure those witnesses are around.”

But above all, the agreement must be registered.

“For any document to have legal effect, it has to be registered with URSB.”

URSB -the Uganda Registration Services Bureau, the sole government agency mandated to do civil registrations (including marriages and divorces but not including births, adoptions, or deaths), business registrations (setups and liquidations), registration of patents and intellectual property rights, among others.

And it’s in the registration process when you need the expert services of a lawyer like Nassolo.

If you the seller, buyer, witnesses and the lawyer, have copies of the registered agreement, and the national registry has a copy, you will have greatly minimised the chances of fraud.

Agreement without sale?

Is an agreement necessary in case a land owner just offers their land to be used for social benefits such as constructing schools, mosques, churches, etc?

Nassolo says even if there won’t be a transfer of the title, there must be a Memorandum of Understanding or there must be an agreement detailing what is going to be done on the land.

“For instance if someone is offering land to a church, there must be an agreement in respect to that such that no one will change their mind just like that.”

She warns people against entering ordinary verbal arrangements.

“Everything should be agreed upon and put in writing. And it should be registered.”

History and land documentation

Land records in Uganda go back to the 1900 Buganda Agreement, which distributed land in Buganda.

According to a paper published by the Director of Land Management at Ministry of Lands, Sarah Kulata, the country’s chief surveyor arrived in 1901 after the signing of 1900 Buganda Agreement.

In Buganda, following the Buganda mailo survey in July 1904, provisional and final land certificates were provided to all people in Buganda who were allocated land.

The first land titles were made in 1908 and distributed by Governor Sir Hesketh Bell on January 2, 1909, when the provisional and final land certificates became Uganda’s first land records.

Data provided by the Uganda Land Use Policy indicates that the total surface area of Uganda is about 241,500 km2, of which 194,000 km2 is land, and the rest is open water and wetlands.

The volume of land in Uganda covers 241,040 square kilometres with only 197,100 square kilometres of physical land.

A report by Land links indicate that most rural people have rights to their land through customary tenure arrangements (representing 75 per cent to 80 per cent of landholdings).

Only 15 per cent to 20 per cent of the land is formally registered.

 Freehold land tenure

Freehold land tenure system is not any different from the mailo system. This kind of land tenure system is found in many parts of the country.

Experts say, it is free land as the name suggests. It’s free from any kind of claim forever. The owner can sell or give it out as they wish, it is always registered and the owner has a duplicate certificate of title while the original is in the land office. The official explains.

If you want to find out information about this land, you get its particulars and go to the lands office to conduct a search by looking at the original title.

Customary system

The customary land holding depends on the community how they deal with land. Some communities have their customary rules of handling the land.

In some of the customary systems, land is owned communally.

Some may own land communally, others individually but it cuts across the entire country. In northern Uganda, land is mainly owned communally and here in central, we have the kibanjja ownership.

Limitations

However, Nassolo says, the major limitation regarding agreements is the inability to read and write the official language, that is English.

So people struggle to draft the document and state the terms: the parties involved; considerations; terms of payment and acknowledgement.

So, they settle for ordinary documents, which they don’t register because they cannot afford the services of lawyers.

Yet for a document to be considered in courts of law, Nassolo asserts, it must be registered.

But what is the least a lawyer can charge for such work?

It depends on the value of the land. For instance, Nassolo says, if the land is valued at Shs4m, an advocate can ask for Shs300,000, or more.

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