On 9th June 2017, the Cabinet Secretary for the Ministry of Lands and Physical Planning in consultation with the National Land Commission (the “Commission”) issued guidelines governing the extension and renewal of leases (the “Guidelines”) through Gazette Notice Number 5734 of 2017. These Guidelines should be read together with Section 13 (1) of the Land Act, 2012 which sets out the general provisions to be complied with by the Commission where a lessee wishes to exercise their pre-emptive right to an extension. The Guidelines set out the process for both extension and renewal of leases.
- Extension of leases
a) Requirement of a notice
i. Within 5 years before the expiry of the lease, the Commission is required to send a notice via registered mail, informing the lessee of the date of expiry of the lease, setting out the rights of the lessee to apply for extension and to whom to make the application.
ii. The notice is to be copied to the Cabinet Secretary or the relevant County Government.
iii. If the lessee fails to respond to the notice within one year, the Commission will take the following steps:
- publish the notification in two newspapers of countrywide circulation indicating where the application is to be made.
- conduct a physical verification of the land with a view to establishing the status of the land.
- If the commission finds that the lessee and the family is occupying the land, it will advise them to apply for extension and the consequences of failing to do so which include forfeiting the right over the land and automatic reversion to the National or County Government.
b) Procedure for making an application for extension of lease
The registered proprietor or an appointed administrator shall make the application to the office of the Commission where the land is located. The applicant should attach the following to the application:
i. Copy of the ID/Passport (for an individual) or Certificate of incorporation (for a company)
ii. Letters of administration and confirmation of grant where applicable
iii. Current official search (obtained within the month the application is made)
iv. Passport size photograph
v. For a company, the names of the directors and their citizenship status including a search from the Registrar of Companies showing the shares of each director
vi. Land rent and rates clearance certificates from the relevant authorities
vii. Information whether the title to be extended will be subject to any existing encumbrance(s)
viii. Proof that the lessee has complied with the terms and conditions of the existing lease.
Within seven (7) days of receiving the application, the Commission shall forward it to either the representative of the Cabinet Secretary if the land is vested in the National Government or the County Executive Committee Member for lands if the land is vested in County Government for approval.
c) Large Scale Investments
For large scale investments, the Commission in consultation with the National or County Governments shall ensure that the renewal will be beneficial to the economy and that the investment purpose is in line with the national development goals and objectives.
d) Consultations with relevant offices
Before approval or rejection of an application, the county or national government shall seek the views of the following offices:
i. County Executive Committee Member responsible for land
ii. County Government Surveyor
iii. County Government Physical Planner
iv. Land Administration Officer of the Commission
v. Any other relevant authority.
e) Approval or objection of application
Upon receiving views, the National or County Government may either:
i. approve the extension of lease for a specified term. The land will then be revalued to determine the payable land rent and other requisite fees, re-surveyed and geo-referenced and the lessee shall surrender the existing title or lease certificate in consideration for a new lease; or
ii. decline to extend the lease and give the lessee the reasons thereof within ninety days (90) from the date of the application for extension. The reasons for declining shall be limited to:
- where the National or County Government needs the land for public purpose under Section 13, Land Act, 2012 in which case the National or County Government are required to give the lessee a notification, copied to the Commission, of at least three (3) years before expiry of the lease of their intention not to extend the lease or
- there is proof that the lessee has failed to comply with the terms and conditions of the existing lease.
The decision to approve or reject an application of extension of a lease must be forwarded to the Commission for implementation.
An applicant who is aggrieved by the decision of the National or County Government may refer the matter to an independent appeals committee established by the Commission which will be located in the office of the Executive Committee Member in charge of Land at each County.
- Renewal of expired leases
a) Where the term of the lease had expired without prior notice to the lessee, the lessee or the administrator must apply to the Commission for renewal of the lease. The application can be addressed to the Chairman of the Commission or made through the online portal at email@example.com
b) The application should be accompanied by the same documents as for an extension as listed under paragraph 2
(b) above but should also include the original lease to confirm the status.
c) The Commission must seek the views of the County Executive Committee Member responsible for land, Director of Surveys, Director of Physical Planning, Land Administration Officer of the Commission and any other relevant authority.
d) Where favorable recommendations are received, the Commission will ensure that:
(i) the land is revalued to determine the land rent and other requisite fees to be paid;
(ii) the land is re-surveyed and geo-referenced;
(iii) a new letter of allotment is issued; and
(iv) ultimately, a new lease for the parcel is to be issued in accordance with the provisions of the Land Act, 2012 and the Guidelines.
e) If any recommending authority is of the view that the lease should not be renewed, such authority will give reasons to the Commission within thirty (30) days.
f) Any applicant who is aggrieved by the decision not to renew their lease can appeal to the independent appeals committee established by the Commission.
g) The appeal or the application for renewal will not be accepted where the land is required for public use or where the lessee has not complied with the terms and conditions of the existing lease.
- Some observations
a) For those who hold leasehold properties, we recommend that they carry out an audit to confirm when the leases expire.
b) Ensure that their correct address appears in the title so that the Commission notice is send to the correct address.
c) The owner of a leasehold property should note to make an application for extension of lease at least five years before the expiry of the term whether a notice is received from the Commission or not.
d) Although the Guidelines have been issued, it is unclear whether these are being implemented.
e) There have been media reports that the freeze on renewal of leases for subdivided parcels may still be in place.
f) The Commission now has extensive powers to determine extension of leases and renewals.
g) The approval of extension or renewal of leases for large scale land owners shall be based on the benefits to the economy and the country as a whole and the national development goals and objectives. No clear definition of what constitutes a large scale investment is given.
h) The Guidelines also attempt to deal with absentee land owners.
The procedures and process for obtaining extension and renewal of leases is welcome and helps with transparency. The Guidelines have attempted to provide for specific timelines for processing applications to ensure applicants do not suffer from unnecessary delays.