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Society

Origin of law that allows forcible takeover of assets

The State has the right to pull down structures to pave way for important infrastructure projects. Photo | Laban Walloga
The State has the right to pull down structures to pave way for important infrastructure projects. Photo | Laban Walloga 

The power of the State to compulsorily acquire private property under the principle of eminent domain has come into sharp focus recently with the building of national highways and more notably the standard gauge railway (SGR).

The term “eminent domain” has its origins in the legal treatise De lure Belli ac Pacis, written by the Dutch jurist Hugo Grotius, which used the term dominium eminens (supreme lordship).

It stated that “the property of subjects is under the eminent domain of the State, so that the State or those who act for it may use and even alienate and destroy such property, not only in the case of extreme necessity, in which even private persons have a right over the property of others, but for ends of public utility, to which ends those who founded civil society must be supposed to have intended that private ends should give way. But, when this is done, the State is bound to make good the loss to those who lose their property.”

The exercise of eminent domain is not confined to real property and the State can take intangible property such as contract rights, patents, trade secrets and copyrights.

However, taking of property must be accompanied by just compensation to the owner which, in theory, should restore his pecuniary position to the “status quo ante”.

Compulsory acquisition of property in Kenya is governed by the Land Acquisition Act CAP 295, as revised in 2010. The process starts with the State publishing a preliminary gazette notice in respect of the property to be acquired.

All affected owners must be served with a copy of the gazette notice.

The State must justify the public interest that the property is intended to be used as defined in the Act and demonstrate that such public interest overrides any loss that is to be suffered by the private owner. Preliminary objections may be lodged at this point by interested parties.

Once the preliminary notices are satisfied the State must then publish another gazette notice indicating the property to be acquired and the compensation to be paid as fair market value plus 15 per cent for disturbance.

Property owners may raise objections at this stage if they are not satisfied with the amount of compensation offered by the State.

This has been the cause of delay in many projects as owners seek higher pay outs whether justified or not. After all objections are dealt with, the State will proceed to take possession and transfer the property.

There are different classes of takings. Complete taking involves the appropriation of all the property including permanent improvements thereon.

Partial taking, as in the case of a strip of land required for expansion of a road, where the owner is compensated for the value of the piece to be taken plus any diminution in the value of the remainder land.

Temporary taking, where the property will be appropriated for a limited period, say for the construction of a highway, and the owner gains possession after completion and is compensated for the period of use.

Easements and rights of way for installation and maintenance of power lines are another type of taking. Condemned properties may be taken over by local authorities and leased afresh for redevelopment.

Declaration of national monument status derives its powers from the concept of eminent domain, only in this case, no compensation is paid for the restriction on alterations imposed by such declaration.

In more developed economies, national monument status can actually bestow a premium on property value, particularly in the art market.

As with many other laws, the principle of eminent domain can be and is abused by cities across the world. Local authorities force people off their land so that private developers can build more expensive homes and offices that will pay more in taxes than the buildings they are replacing.

The term “public interest” can be amorphous and infinitely elastic in definition creating loopholes for abuse.

On the other hand, in Kenya, public officers have been known to collude with private owners and more so, speculators to leak development plans in advance where the government intends to invoke powers of compulsory acquisition thereby artificially inflating the market price of land.

The case of the SGR passing through part of the Nairobi National Park is unique in that the government is setting aside land from another public body to the railway.

The bone of contention is the negative environmental impact the railway is likely to have on the national park. Which is the greater “public interest”, the railway or the park and its animals?

The city of Nairobi was once a vast grazing ground and watering hole for these animals, but we have encroached on their territory until there is little of it left. We know where we began but where do we stop in the pursuit of “public interest”?

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