Real Estate and the Law II

Sitting at one of Kenya’s rural courts one day, I witnessed the drama of a land-related family wrangle between men in their 70s and 80s. They claimed that their deceased father’s wishes regarding the division of the land were not being respected. I have a feeling the reason many of us were laughing so much is that we were all silently amused that these men who might die in just a few years were so keen on fighting for what they considered their fair share. The hilarity of the scene was dimmed by the sad fact that the case had taken years.

The land in question in that case was freehold land which is part  of the reason it was so lucrative and considered worth fighting for. In legal terms, one of the types of interests there can be over land is an estate. There are either freehold or leasehold estates. The main disticntion between the two is the duration of the interest. Just as the word suggests, a freehold estate generally has the longer term.

Freehold estates are of various types. A fee simple estate is the most absolute in terms of the duration of the interest. The interest in land is held for as long as the owner and his descendants exist. It could go on for centuries. Once the last known descendant dies, the interest in the land reverts to the state. The fee tail estate is less absolute in the sense that the interest can only pass on to lineal descendants and not just any successor. The freehold life estate is a type of interests that exists only while the land owner is alive and it lapses when he dies. The Estate per autre vie is peculiar because the interest in land is held for the duration of the lifetime of a person other than the one to whom the title in land is granted.

Land owners with freehold estates do not pay rent. I can imagine how dreamily those of you who have to pay rent read that sentence.

Perhaps of greater interest to us is the leasehold estate. Most of the prime properties in the capital are leasehold estates. The types of leasehold estate depend on the agreement between the lessor/landlord, who is the owner of the land (sometimes the government) granting an interest to another, and the lessee/tenant who is the beneficiary of that grant.

Fixed term leases have a specific period set out in the tenancy agreement. It could be a few months, a few years or longer.

Periodic tenancies are deemed to be renewed every so often. Your monthly tenancy is an example of this. It is also common to find quarterly tenancies for business premises for which rent is paid every three months. To terminate this sort of lease, it is usually sufficient to give notice equivalent to the period of the lease - one month's notice or three months' notice etc - depending on the agreement.

A tenancy at will on the other hand can be terminated at any time the landlord or tenant wishes. The arrangement is such that the tenant simply obtains rights or occupation of the land with the permission of the landlord with few other terms agreed if any.

The tenacy at suffereance occurs where another type of leasehold estate ends but the tenant continues to occupy the land without the landlord's express consent. The landlord contitnues to collect rent which is considered to mean that he does not really mind having the tenant stay on even though he won't say so.

These last two types of leasehold estates are rather risky. Both the tenant an landlord are exposed to the risk of having the lease terminated with no notice. In most cases, it is the tenant who faces the greater risk. Picture the typical forlorn looking man and his family sitting outside with all their stuff piled high behind them. The landlord is only likely to lose revenue for a while.

Naturally, freehold estates are better because of the kind of interests they confer but it happens that sometimes the government grants only leashold titles  in certain areas in order to retain some control over the land in those areas but also because they are a source of revenue. It's annoying I know but there is a legal basis for it that is even more annoying: the principle that all interests in land are ultimatley held by the state.

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