Supreme Court of Kenya Again Highlights the Need for Proper Due Diligence When Buying Land

Share

Author: Thuo

Another judgment by the Kenyan Supreme Court highlights the importance of conducting thorough due diligence when purchasing land.

A company by the name Torino Enterprises Limited had instituted a suit in the High Court claiming that it had acquired land for a term of 99 years commencing from the year 2000, from Renton Company Limited, which company had acquired the said property for value, through an allotment letter. The company contended that on or about the year 2005, the Department of Defence encroached on its property and unlawfully fenced off ninety (90) acres.

The Ministry of Defence challenged the legality of Torino’s title, arguing that the same had not been acquired in accordance with the applicable laws. It contended that the suit property was public land, and as such, was not available for allocation to a private entity such as Renton Company Limited, the first allotted.

In a judgment delivered to the High Court, the Court stated that Torino was the lawfully registered proprietor and its title to the land could not be challenged. On appeal, the Court of Appeal overturned the judgment by the High Court and held that the title held by Torino was acquired unlawfully.

Aggrieved, Torino appealed to the Supreme Court which argued that its title could only be challenged on the ground of fraud or misrepresentation and since it was not proved that it was a party to any fraud or had acquired the property illegally, it remains an indefeasible owner of the property.

The Supreme Court stated that to determine the legal status and validity of the title held by Torino, the Court must inquire into the root title of the suit property. Since the process leading to the issuance of its title was unlawful, Torino could not have acquired a good title.

As to the question as to whether Torino was an innocent purchaser, the Supreme Court held that such an argument could not hold water as the process leading to the issuance of its title was defective. Additionally, the Court believed that an innocent purchaser for value would denote one who is aware of what they are purchasing by inspecting the suit premises.

What is clear from this decision is that Torino needed to carry out proper due diligence prior to purchasing the suit property. Had it carried appropriate due diligence, it could have known that Renton Company Limited was not the lawful owner of the property and that the suit land was occupied by the Department of Defence.

Like in the case of Dina Management Limited vs The County Government, the Supreme Court mandates purchasers to investigate the root of the Title to the property before acquiring land, for the validity of the title is now hinged on the process leading to the acquisition of the title. Any title now acquired through an illegal process is defeasible.

If you are a purchaser intending to buy land in Kenya, Advocate Getter is a phone call away and will guide you in carrying out the necessary due diligence.