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Dealing with fraudsters in real estate
If you are out of the country but want to buy land, you should work with a team of surveyors, lawyers and police to avoid cases of being defrauded.
What you need to know:
On a number of occasion, people have come out to complain about having been duped in a land deal. Lilian Namagembe spoke to some buyers and real estate companies on why there is an increase in land fraud cases and what is being done to deal with the problem.
Having lost her husband in 2010, Justine Kawere tried all sorts of jobs which did not seem productive enough to raise money to sustain her and her five children.
After struggling for almost two years, Kawere started looking for an opportunity to travel abroad to find casual work through which she would raise money to look after her children who had now dropped out of school. As fate would have it, in 2010, through a family friend, an opportunity presented itself for Kawere to travel to Dubai and work as a cleaner in a hotel.
Her plan was to use part of the money she earned to buy a piece of land back in Uganda and construct rentals through which her children would get school fees.
In 2012, Kawere thought her dream would come true when she responded to an advert on land placed in one of the local dailies by a real estate company after a tip from a friend in Kampala. She was now to return to Kampala to confirm and do a site visit of the land that they had agreed upon with the estate agents.
The 50x100ft plot of land which was located in Kasangati on Gayaza road, Wakiso district was sold to her at Shs10m.
She then signed a contract with the said estate agent and also paid for the land after which the former undertook to handover duly executed transfer forms and a certificate of title to Kawere.
But despite several demands to have the documents handed over, the agents refused to perform their part of the contract.
Kawere, on going to the lands ministry, discovered that the land belonged to a different person who was the registered proprietor and not her agents company.
She says it took her one year before court could order the faulted agents to compensate her with Shs50m.
But Kawere says she made a loss considering the income she would have made from the rentals.
The problem
Cases of Ugandans that have been defrauded through land deals have brought the authenticity of many real estate companies under scrutiny.
In some cases, land agents have been sued for selling land to more than one person and other agents have ended up in jail which has branded them as fraudsters.
But whereas its common perception by most people that real estate agents have been the major impostors, land proprietors have come out to dispute the allegations.
Ignorance
The real estate agents who have been operating in the business for quite some time defend themselves that most of these cases crop up as a result of ignorance on the side of both the agent and the client.
Sellers
Lauben Muhabuzi, the Managing director, Semu Real Estate Business and Agents blames the people who sell land to real estate agents as the ones who in most cases dupe the latter by selling the same piece of land to more than two companies or people.
He says, “Some land agents enter business without acquiring enough knowledge on land issues but not necessarily because they intend to dupe their clients.”
“At times, some agents are also ignorant about the legality of the land they are selling which they end up being forced by the courts of law to compensate for and because of the heavy losses their businesses collapse.”
Not paying fully
Muhabuzi adds that some real estate companies sell land to their clients before making full payments to the original sellers who later claim for their land after the breach of contact
“Clients should therefore always first look at those documents which the agents used to acquire the land and also ensure that the land was fully paid for and transferred to the latter’s names,” he advises.
Lack of sensitisation
Muhabuzi also says government has not done enough to sensitise the citizens on land issues which has made them vulnerable to imposters because they can easily be manipulated.
In the Diaspora
Peter Semugema, the Managing Director of Jesus Property Agents says people who leave in the diaspora are advised to get trustees such as lawyers to do site visits and verification rather than trusting the land agents.
“Our clients outside the country should endeavour to involve as many concerned people in the buying process as possible starting with police, surveyors and lawyers as this would scare away dubious agents.
What is being done
In the midst of such bad reputation in the real estate business, the proprietors decided to start an association in 2010 called the Estates Property Agents Association (EPAA).
According to Simon Peter Kareekezi, the EPAA chairperson, the five-year-old association was formed to unite sellers and buyers of land and fight fraudsters who want to tarnish the business.
Identification
Kareekezi says in order to distinguish between fraudsters and genuine agents; the organisation has introduced identity cards for the member real estate companies and individual agents.
“Land buyers and sellers have for long been defrauded because they could not differentiate between genuine agents and impostors since they had nothing to identify them,” Kareekezi says.
He warns, “Anyone planning to buy land through any land agent should first certify their membership with the agents’ association because our members have set guidelines which they follow.”
Mediation
Kareekezi also points out that the organisation mediates land conflicts between agents and clients, and also agents and land sellers to allow for compensation to anyone who is cheated.
Investigate
Lauben Muhabuzi, the Managing director, Semu Real Estate also advises clients and land agents to first research and verify the ownership of the land by inquiring from the concerned parties. He advises that it would be prudent for the buyers to first inquire from the neighbours in the area where the land is located as there is a high possibility of them knowing the real owner.
Muhabuzi adds that the buyers can also consult include local council leaders, before verifying with the concerned land boards in whose jurisdiction the sold land falls.
Target group
From the previous cases that have been reported to police, while any one may fall prey to one of these scams, the groups most targeted by real estate scammers are the elderly and individuals with low income.
These groups are targeted because the scammers contemplate that the groups at times can’t afford or even at times may not be able to file legal suits.
Precautions
Vincent Mubangizi, the executive marketer, Arkright Projects Limited gives the best procedures one would follow in order to buy genuine land and also differentiate it from one which is not.
Know what you want
“If you are to buy land, you are required to identify which part of the country you would like to buy land. This will enlighten you on where to go for investigations on the authenticity of the land and its seller.”
Site seeing
Mubangizi adds that the buyer then conducts a site view first by looking at the land using surveyors to get the rightful measurements and stop the sale agent in that case from inflating the price.
“This should be done before looking at the documents and if the land titles are ready, the client is supposed to verify them as the negotiation for the price continues,” Mubangizi says.
Know facts about the land
Recently, Abbas Mubiru, husband to local artiste, Stacia Mayanja who is a land broker, was dragged to court last month by a one Ronald Ddanze for selling him a fake piece of land on Entebbe Road.
Danze alleges that between October and November 2014, the former used fake documents through false presence and conned him of Shs45.5m for a piece of land in Lubowa, Wakiso district.
During police interrogation, Mubiru did not deny the charges but claimed that he too was unaware of the controversies surrounding the said land. On this note, Mubangizi advises that in cases where the land being sold does not have a title, the agent must disclose this fact to the buyer.
He adds that: “If it’s for example a lease hold kind of land, the buyer must be notified so that an agreement is signed and also the land owner notified about the new occupants to avoid clashes between the two.”
Types of land tenure
Freehold tenure
Freehold is a tenure that bestows upon someone ownership of registered land in eternity
Mailo Tenure
Mailo tenure is predominantly in Buganda, with some minimal parts of Ankole, Bunyoro and Toro sub-regions having it. It is where permanent ownership of a large plot of land belongs to landlords who acquired it through the 1900 Buganda agreement, while at the same time tenants on the land are recognised and they also have rights to live on and utilise the land.
Customary tenure
Customary tenure is where land is owned communally, by a clan, or a tribe, among others.
Lease hold
The 1998 Constitution describes leasehold tenure as one where one party grants to another the right to exclusive possession of land for a specified period, usually in exchange for the payment of rent.
