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Freehold and leasehold titles are valid documents issued by State

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Lease hold freeholdEarly this year, the public was treated to hilarious moments when President Uhuru Kenyatta gave out leasehold titles to squatters on the now famous “Waitiki Land”. Many did not seem to understand that the leasehold title documents they were given were valid and are guaranteed by the State. Some kept on saying that they wanted a “title”.

In an attempt to respond to their demands, interesting views were being proffered all over the place, some bordering on the absurd.

But it is that it important to put things into perspective.

Generally, there are two basic forms of legal ownership of land: freehold and leasehold.

Freehold

Freehold ownership, as the term implies, is “free” for you to own and improve/develop in line with approved building regulations and local laws. This type of ownership has the following unique features:

  •   The ownership is in perpetuity … fee simple…. You own it forever.
  •   It does not attract ground rent form the government;
  •   It attracts only rates from the local authorities for service delivery (garbage collection, sewerage, etc.)

Leasehold

Just as the term implies, in the case of leasehold ownership, the land has been leased to you by the freeholder, in this particular case the government, for a specific term, usually as in the case of the land in question, for 99 years. The key features of this mode of ownership are:

  •   The lease is for a given period, say 99 or 45 years depending on type of lease
  •   There is an element of ground rent, which is payable by the lessee to the lessor
  •   It attracts rates and levies from the local authorities
  •   The lease comes with restrictive clauses that control development or stipulate the type of use the land shall be used for
  •   Leases have renewal clauses that the lessee can use to apply for an extension.

Aspects that cut across both freehold and leasehold ownership

Both are good for collateral, so long as the lease period is long enough to allow reasonable comfort to the lender on repayment period, at least over 25 years, to run

  •   Both confer ownership
  •   They are both guaranteed by the government so they are authentic.

From the foregoing, it is clear that those who received leasehold titles from President Kenyatta should ignore the stories doing the rounds that what they received were mere “pieces of paper” and enjoy the benefits that come with conferment of ownership.

 

Paul Wambua is the chairman of the Institution of Surveyors of Kenya

 

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