• Mon. May 23rd, 2022

UGANDA, Kampala | Real Muloodi News | Land ownership is everyone’s dream in Uganda. Most individuals, understandably, wish to own land in perpetuity. As a result, rather than taking up a land lease, they will opt for Mailo or freehold land. According to Ivan Matthias Mulumba, a valuation surveyor in Uganda and guest writer for the Buganda Land Board (BLB), the common problem is that such land is out of reach for most people because of its excessive cost.

Much of the land that is ideal for commercial use in Kampala is under leasehold tenure. However, because of the uncertainty people have regarding land leases, they overlook the most suitable land for prime investment opportunities.

A land lease is an agreement to use someone else’s land for a particular purpose with exclusive rights for an agreed period under signed agreements between the lessor (land owner, or landlord) and the lessee (a person to use the land). The lease for public land is 49 to 99 years. For private land, the term of the lease is five years or more. In Uganda, you can get a lease from the owner of freehold, customary, or Mailo land, or by the Crown, or Uganda Land Commission, to another person for an agreed period.

The following questions are always on people’s minds: “Will they renew the lease when it expires?” “Will I be able to afford to pay the ground rent?” While these are valid questions, they shouldn’t preclude you from considering land under leasehold tenure. The initial cost of owning such land is so low; a fraction of the land’s market value, which should factor into your investment equation. It also gives you the opportunity to own land in a location you wouldn’t otherwise be able to break into. 

Further, the lessee is entitled to a certificate of title issued by the government, which you can then use as collateral to secure a mortgage or loan. You will be afforded the right to use the land exclusively, and you can also sell your interest in it at a later point in time. 

Rather than ignoring good real estate, we must be courageous if we want to become Real Muloodis or live in desirable neighbourhoods.

What to Consider Before Signing a Lease Agreement

A land lease agreement is a contractual agreement between the lessor and lessee that defines the terms and conditions that suit their reciprocal land use needs. 

The agreement should outline the length of the lease, how the land will be used, and the terms of payment.

Payments include the premium (the initial lump sum amount paid), and the annual rent payments. You can negotiate the amount of money you pay to the landlord, depending on activity and type of business you are using the land for.

Be sure that the agreement states that so long as you have made the agreed payments, the lease should carry on until expiry. In the event the landlord wants to arbitrarily terminate the agreement, you are protected by the courts of law.

Noah Kiganda Ssonko, a real estate manager at Eco Land Property Service, advises:

“In the agreement, it should be stated that as long as it is not an issue of non-payment, the lease should carry on until expiry. When termination is the option from your landlord, you can go to court and after evaluation for the surface value of the items and property that are on the land, the time wasted and expected gains from the venture (damages), the tenant can be compensated,”

Can You Renew Your Lease?

Depending on the lease terms, some leases are renewed automatically while others, it is upon request. You can only renew a lease that has ended. However, if you wish to change an existing lease, you can request a lease variation or extension.

The terms of renewal of the lease period depend in a large part on how the lessee complied with the contractual terms.

You should ensure that you or your successors in title are prepared for the lease’s impending expiration, especially if the title is used as collateral. You will be required to seek an extension of the lease, get a new one, or vacate the land upon lease expiry. Read this article for more detailed in formation about the process of leasing land in Uganda

READ MORE LIKE THIS:

The Process of Leasing Land in Uganda

Purchasing Land in Uganda: How to Avoid “Buying Air”