Bill proposes payment for expired leases

Land owners whose leases are not renewed will be compensated for improvements made on the property if a new Bill becomes law.

The Land Laws (Amendment) Bill, 2015 says that infrastructural developments like dams and reservoirs; buildings, commercial trees and shrubs and fences will be paid for at market rates when properties revert to government.

The current law does not provide for compensation and all developments on the land revert to the national or county government if the lease was for a period exceeding 30 years.

For leases below 30 years, investors are required to remove the improvements within three months of expiry of the lease or risk the assets being taken over by the government for free.

The Constitution caps land leases at 99 years, but the tenancies are renewed for periods determined by the Sate.

“If upon the expiry of the lease the national or county government declares that the land or part thereof is required for public purposes, and immediately preceding lessee had applied for a renewal or for a new term before expiry but was not granted, the departing lessee shall be entitled to compensation,” the Bill sponsored by National Assembly Majority Leader Aden Duale says.

The proposed law comes as county governments like Kericho, Nandi and Kiambu threaten not to renew leases for companies that hold sizeable tracts of land in their areas.

READ: Surveyors warn governors Kabogo, Chepkwony on foreign leases

Companies like Van Rees Group, Finlays, Williamson Tea, Eastern Produce and Unilever have thousands of acres of tea bushes and accompanying facilities like factories in Nandi and Kericho.

Kiambu governor William Kabogo has opposed the renewal of Del Monte’s lease on 20,000 acres in Thika, which expires this year. Del Monte grows pineapples on the land and currently has 3,000 employees. The leases for most of these lands were for 999 years but the 2010 Constitution reduced the period to 99 years. A lot of them were granted under British rule in the early 20th century.
Paul Wambua, the Institute of Surveyors of Kenya (ISK) chairman, said that the premise for the clause is that having been the leaseholder, the improvements cost money to put in place or are worth something. “The intention is to make sure you are not left in a worse position,” he said.