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Banks assured on validity of land titles used to lend

Lands Secretary Jacob Kaimenyi.  PHOTO | SALATON NJAU| NMG
Lands Secretary Jacob Kaimenyi. PHOTO | SALATON NJAU| NMG 

Jitters among banks, which hold vast collaterals, that some land titles and leases could be voided following failure to include anticipated provisions on the validation and audit of the documents in proposed rules are misplaced.

The Ministry of Land says the new regulations—that have also spooked lawyers and real estate players—did not include validation and audit clauses because these would have no basis in any section of either the Land Act or the Land Registration Act.

Just over a week ago, the Kenya Bankers Association and the Law Society of Kenya were quoted in the local media saying they had raised issues with the draft land regulations because they failed to show how validation and audit of titles and leases would be done for transactions that had been made after 2012.

“When the final draft (of the regulations) was forwarded to the Attorney-General for review and drafting, the ministry was advised against inclusion of these clauses on the ground that they are not anchored in any section of either the Land Act or the Land Registration Act,” it said.

Based on the AG’s advice, Land secretary Jacob Kaimenyi said, “the clauses on audit and validation were excluded from the Land Registration Regulation draft.”

The regulations were made to operationalise the new land laws and were published in the Kenya Gazette last November.

The issues of audit and validation partly arose from a court judgement by Justice Joseph Onguto, for which parties with stakes in the land sector have had varying interpretations.

Quoting the judgment, the ministry maintains the court did not invalidate any titles or provide for an audit.

Given that there is also provision for any corrections in the existing laws, there was no need therefore to provide for such in the regulations, the Ministry says.

“The judgment issued by Justice Onguto neither invalidated the leases/titles nor ordered the ministry to validate the same… Lately there have been allegations made through the media that the regulations have critical omissions on audit and validation of leases issued since 2012,” said Prof Kaimenyi.

Justice Onguto had noted that there was an ongoing process of validating titles and leases issued after 2012, stressing that there could be adverse consequences should he declare them invalid.

The ministry maintains that even if there was to be any invalidation on the basis of the judgment, it would not affect titles and leases that had already been issued since the law would not be applicable retroactively.