Residents express their dissatisfaction after an alleged land grabber razed their gardens in Wakiso District in December 2023. Photo/ Busein Samilu.
The Buganda Land Board (BLB) has advised the public to consult them when purchasing mailo land.
This comes days after the Commercial Court overturned a Shs1.3 billion Kibanja mortgage that was approved without clearance from BLB, which sent several banks into a panic.
According to BLB, more than 10 commercial banks have since reached out to them to seek guidance on how to comply with the court ruling on bibanja mortgages.
The case in question is in regard to the attempted sale of a piece of land at Block 203 Zone in Nansana Municipality. According to court documents, Opportunity Bank attempted to sell the land which had been purchased by Dr Esau Wangi Waswa from Mr Muhamood Byaruhanga after the latter failed to clear a loan.
In an interview yesterday, the deputy chief executive officer of BLB, Mr Bashir Kizito Juma, said the Land Act and the Land Regulations 2004 are very clear when it comes to the rights and obligations of tenants on registered land.
The law gives a tenant a right to obtain a certificate of occupancy on registered land and he or she is protected for as long as they fulfil their obligations.
“The Land Act Section 34 gives a tenant on a registered land the right to mortgage his or her kibanja provided they obtain consent from the landlord and regulation 57 is also clear about the consent of a registered owner,” Mr Kizito said.
“As a body responsible for Kabaka’s land, our message is simple; financial institutions shouldn’t receive mortgages of Bibanja without our consent…. Coming from the law and the judgement, we are saying all the affected financial institutions should approach any branch of BLB to get consent. We don’t withhold it, we grant it and it comes with benefits…. once we give a particular financial institution, we can’t give another for the same kibanja.”
When contacted last evening, the executive director of the Uganda Bankers Association, Mr Wilbrod Humphreys Owor, said: “I can’t comment now. Let me consult with our legal department then get back to you.”
Court ruling
In a June 21 judgment, Commercial Court Judge Patricia Kahiigi Asiimwe said Opportunity Bank should have obtained consent from BLB.
“As I found under issue one above, the alleged mortgage was invalid and unenforceable at law because of lack of consent from the mailo owner, therefore, the second defendant (Opportunity Bank) did not obtain any interest in the suit land as a mortgagee,” Justice Asiimwe ruled.
She added: “I, therefore, find that the first defendant (Mr Byaruhanga) did not seek the consent of Buganda Land Board, as a body that manages the property of the Kabaka of Buganda, contrary to the spirit of Section 3 (a) (3) of the Land Act. In addition, the Buganda Land Board did not avail the consent to the 2nd defendant to register a mortgage on the suit property and required under the memorandum of understanding.”
The ruling also means that a mortgage obtained using a kibanja without the consent of the landlord is invalid.
The judge held that under Section 29 (1) of the Land Act, a kibanja holder is the lawful occupant of the land.
The case
Court documents show that on August 28, 2019, Dr Waswa entered into a purchase agreement with Mr Byaruhanga for the piece of land. Mr Byaruhanga agreed that the leasehold title would later be transferred to Dr Waswa’s name.
On November 25, 2019, Dr Waswa made further payment to Mr Byaruhanga, who introduced him to the local leaders and granted him vacant possession of the suit land. Mr Waswa took possession of the land and even set up a washing bay that is still on the land.
Mr Waswa on several occasions asked Mr Byaruhanga to follow up on the processing of the land title at BLB, which the latter allegedly did not do. Mr Waswa decided to engage officials at BLB but discovered that Mr Byaruhanga, through his company Mashunga Enterprises, had mortgaged the suit land to Opportunity Bank without a title.
On September 17, 2020, Mr Waswa later found out that Opportunity Bank was advertising the suit land.
In his defence, Mr Byaruhanga said he fulfilled his obligations under the agreement when he introduced Mr Waswa to BLB. He said Mr Waswa should have followed up the titling process himself.
In October 2018, Mashunga Enterprises applied for and obtained a Shs1.3b loan from Opportunity Bank using the land in question as collateral and other properties.
Court documents further show that Mr Byaruhanga defaulted on his loan obligations and the bank advertised the land for sale without exercising its rights under the facility agreement.
The bank contended that it had a prevailing interest over Mr Waswa since the suit land had always been a security for the credit facility extended.
