The Land Control, Bill, 2022 was published in the Kenya Gazette on 25th February 2022. The main objective of the Bill is to replace the Land Control Act (Cap 302), in order to align the existing law on transactions relating to agricultural land with the Constitution of Kenya 2010, the Environmental and Land Court Act, 2011, the Land Registration Act and the Land Act, 2012.
The Bill, if passed, will apply to transactions relating to dispositions of: (i) land within an area that is not designated as a city or urban area by the Cabinet Secretary in charge of the Ministry of Devolution; (ii) land within an area designated for agricultural use under the Physical and Land Use Planning Act; and (iii) land used for agricultural purposes (“Controlled Transactions”).
The Bill seems to be broadening the scope of the current Act since, firstly, it shall apply to land used for agricultural purposes notwithstanding that the land is located within an area designated as a city or urban area, or the title to the land contains a restriction that the land may not be used for agriculture, which makes it unclear what using land for agricultural purposes shall comprise of. Secondly, the term “disposition” as defined under the Land Act also includes surrender of an interest in a lease or easement, which is not a Controlled Transaction under the current Act.
Where a transaction is a Controlled Transaction, consent of the relevant land control committee (the “Committee”) ought to be obtained prior to implementation of the Controlled Transaction, otherwise such a transaction shall be void.
What is new in the Bill?
The Bill departs from the Act in several instances as set out below.
Change of Control of Public Companies and Other Incorporated Entities Captured by the Bill
Under the Bill, the Committees shall be mandated to “grant consent for the issue, sale, transfer, mortgage or any other disposal of or dealing with any share in a company, co-operative society or any entity owning agricultural land.” The current Act only applies to dealings in shares in a private company or co-operative society which owns agricultural land.
This means that any trading of shares in a public company that owns agricultural land, including publicly listed companies and any transfer of an interest in a limited liability partnership that owns agricultural land, shall be a Controlled Transaction requiring the consent of the relevant Committee. The additional requirement for consent will greatly hamper trading of shares of listed companies that own agricultural land. Foreigners will also not be able to own shares in any entity that owns agricultural land.
Introduction of the Land Control Committees
The Bill establishes the Committees as the successor to the current land control boards, which shall be appointed by the Chief Land Registrar by notice in the Gazette in each constituency. Other than reviewing and granting consents to all dispositions relating to agricultural land (as currently undertaken by the land control boards), the mandate of the Committees shall also include:
granting consent to lenders exercising their statutory power of sale of agricultural land. Currently, even though the Act applies to all disposals of agricultural land, in practice, banks do not usually obtain consent of the land control board when selling a defaulting borrower’s agricultural land;
maintaining both physical and electronic registers of all applications for consent made to the Committees – members of the public shall be allowed to inspect the register upon paying a prescribed fee;
publishing a list of all applications for consent made to the Committee at least 14 days before the date of the hearing to review the applications. These must be published at the Chief Land Registrar’s office, at the constituency office of the area Member of Parliament, at the Chief’s office and on the Sub-County’s website. This means that an application for consent must be submitted to the relevant Committee at least 14 days prior to the date of review of the application. Members of the public shall also be allowed to file objections to applications for consent before the Committee;
hearing and determining applications for consent within 30 days of receipt of the application. This shall create certainty of the timeline within which consent ought to be granted or refused, but it is unclear what would happen in a situation where a Committee fails to deliver a decision within the prescribed timeline;
resolving disputes over general boundaries of agricultural land. General boundaries relate to land whose titles were issued pursuant to the repealed Registered Land Act and whose boundaries are delineated in the Registry Index Map. This means that the Committees shall not handle disputes relating to fixed boundaries, which are boundaries relating to: (i) land whose titles were issued under the repealed Registration of Titles Act and whose boundaries are delineated in a deed plan attached to the title; and (ii) specific parcels of land with titles issued under the repealed Registered Land Act, but whose boundaries are fixed;
settling any land disputes referred to the Committee by willing parties and handling matters referred to the Committees by the Environment and Land Court. This is in line with the Constitution of Kenya, 2010 which encourages settlement of land disputes through recognised local community initiatives; and
fact finding and evidence gathering on all matters involving agricultural land, including matters before the courts and succession matters.
Selection, composition and membership of the Land Control Committees
Under the Bill, Committees are to be established in every constituency. Currently, there is a land control board for every land control area, which consists of the administrative areas formerly known as districts. Clarification that every constituency shall have a Committee shall greatly enhance efficiency, since currently with the abolition of districts, the extent of every land control area is not clear.
There is a proposed reduction of the members of the Committees to 7 members, from the current minimum of 8 members and maximum of 12 members. Members of the Committees are to be appointed by the Chief Lands Registrar upon recommendation of a selection panel which shall advertise vacancies within the Committees, shortlist and interview applicants. Members of the current land control boards are appointed by the Cabinet Secretary in charge of the Ministry of Lands and Physical Planning.
The Bill proposes minimum qualifications for members of the Committee including, a degree from a university recognised in Kenya (for the chairperson of the Committee) or a secondary school leaving certificate (for all other members), and demonstrable knowledge of the traditions and dispute resolution mechanisms of the residents of the area under the Committee’s jurisdiction. Members of the Committee are to serve for a single term of 4 years.
Enlarged penalties for offences under the Bill
The Bill proposes to increase the current penalties upon conviction for offences defined in the Bill to fines not exceeding KES 100,000 or imprisonment for not more than 6 months, or to both. Offences under the Bill include refusal to appear before a Committee upon being summoned, paying, or receiving money or retaining possession of land that is subject to a transaction pursuant to which an application for consent has been declined and knowingly making false statements in an application for consent or an appeal.
Exemptions under the Bill
The Bill empowers the Cabinet Secretary in charge of the Ministry of Lands and Physical Planning to exempt any agricultural land, shares in a private company that owns agricultural land or any person who is a party to a controlled transaction from application of the Bill. Currently, this power is reserved only for the President.
Gaps in the Bill
Increase of the functions of the Committees to include settlement of disputes over general boundaries and land disputes referred to the Committees by willing parties is a welcome initiative, but Regulations should be enacted to provide procedures for the conduct of such hearings and the rules for gathering and presenting evidence during such hearings.
Under the Bill, an application for consent should be accompanied by a copy of the cadastral map of the land affected by the Controlled Transaction. A copy of the cadastral map would be obtained from the Survey Records Office. Currently, this is not a requirement when applying for the consent of the land control board, and will likely increase the cost and timelines for conclusion of Controlled Transactions.
The Bill prescribes that consent should be refused where the purchase price payable pursuant to a Controlled Transaction is not in accordance with the value of the land as calculated on the basis of a land value index. Firstly, the land value index prescribed to be developed under the Land Act, 2012 is yet to be established and secondly, such land value index would apply only to compulsory acquisition of land by the National or County Governments, yet the Bill specifically excludes transactions where the Government or a County is a party.
The Bill also empowers the Cabinet Secretary in charge of the Ministry of Lands and Physical Planning to enact Regulations prescribing the manner of conducting surveys and studies to ascertain the minimum and maximum land holding acreages in respect of private agricultural land. This is in contravention of Article 68 (c) (i) of the Constitution which empowers Parliament to legislate on the minimum and maximum land holding sizes and subdivision of private land. It should be noted that the Minimum and Maximum Land Holding Acreages Bill, 2015 was presented before Parliament but was shelved as a result of sharp criticism from members of the public.
The Bill makes reference to agricultural land owned by group representatives incorporated under the Land (Group Representatives) Act, yet the Land (Group Representatives) Act was repealed by the Community Land Act. This provision should be amended to make reference to agricultural land owned by and registered in the names of communities as defined in the Community Land Act.
The Constitution of Kenya, 2010 guarantees the right of foreigners to own land anywhere in Kenya, subject to leasehold tenures of not more than 99 years, but both the Act and the Bill curtail that right by providing that consent should be refused where any party to a Controlled Transaction is not a Kenyan citizen. This provision in the Bill may be challenged for being in contravention of the right to ownership of private property by foreigners and therefore unconstitutional. Last year, similar restrictions in the Land Act 2021, restricting foreigners from owning beachfront properties were held to be unconstitutional by our courts.
It should be noted that in 2012, as part aligning Kenyan land laws to the Constitution of Kenya, 2010, Parliament repealed the Land Control Act when passing the Land Act in 2012, save that the Act was omitted on the schedule of statutes to be repealed when the Land Act was published by the Government Printer. However, in 2012, the High Court in the case of Basil Criticos v. The Attorney General & Others ruled that the omission of the Land Control Act in the schedule of laws that were repealed did not fall under a clerical, printing or a formal error which the Attorney General could rectify, and made an order directed at the Attorney General to move a Miscellaneous Statute Amendment Bill to Parliament for consideration. No such Miscellaneous Amendment Bill has been presented before Parliament and whilst this Bill technically repeals the Land Control Act, it then reinstates it by way of the Land Control Act 2022, if and when this Bill is passed.
The Bill is yet to be presented before the National Assembly for consideration and debate, but we shall be on the lookout for the invitation to the public to submit comments on the Bill and alert you in due course.
Read the full article at Bowmans.