Article 65 of the Constitution of Kenya, 2010 restricts foreigners to owning leasehold property for a maximum lease term of 99 years. Consequently, foreigners are not legally allowed to hold freehold titles in Kenya.
For context, a freehold title confers absolute ownership of a property with an unfixed duration while a leasehold title grants ownership for a fixed term, typically up to 99 years.
Regulation 14 of the Land Regulations, 2017 (the “Regulations”), provides that the National Land Commission (NLC) would commence conversion of all freehold titles and leases exceeding 99 years, held by non-citizen owners, within 5 years from the Regulations’ effective date. The NLC was required to notify non-citizens of its intention to reduce the tenures to 99 years. However, due to the lapse of time, there is a lack of clear guidance on how non-citizens can proceed with the conversion of tenures.
In Koome Mwambia & 3 others v. Deshun Properties Company Limited & 4 others [2014] Eklr, Hon. Judge L.N Gacheru cited Article 40 of the Constitution of Kenya which guarantees ownership of land to any person. He noted that this right is not absolute, because Article 65 restricts non-citizens to holding land only as leasehold for a maximum term of 99 years. Also, he argued that while there is no law explicitly prohibiting non-citizens from acquiring freehold land, the Constitution limits such ownership to a leasehold of up to 99 years. Thus, he ruled that the transfer of the freehold property in question to Deshun Properties, a non-citizen, was not illegal as claimed.
Conclusion.
The conversion process of a freehold title to a leasehold title for foreigners comes with legal and administrative challenges. With the Kenyan legal framework restricting land ownership for foreigners to leasehold only, it is imperative for foreigners to hold leasehold properties. We anticipate that the relevant government authorities will address this conversion process of tenures to ensure compliance with Article 65 of the Constitution.
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