• Mon. Oct 2nd, 2023

Possession of a Land Sales Agreement During and After Transactions Matters

UGANDA, Kampala | Real Muloodi News | It is one thing to utilise land, but quite another to establish ownership—which is the root of all disputes. Both parties (the seller and the buyer) must possess a sales agreement before and after the sale and purchase of land.

What does it mean to have proof of ownership before and after land sale transactions? The seller must provide the buyer with the prior sales agreements as evidence of ownership. After purchasing land, the buyer should have ownership documentation, including a sales agreement in addition to a land title.

On the verge of losing your land, one side inquires, “Do you possess the land’s title? The other responds, “No.” But anything like a sales agreement may have saved them. However, they lack it.

What to Know

According to the Registration of Titles Act, all land titles are registered.

Whether or not the land in question is registered, experts believe it is essential to have confirmation of the seller and buyer’s agreement to minimise fraud.

According to Milly Nassolo Kikomeko, an expert in land affairs, a sales agreement is “a protective gear,” since it is your insurance policy against fraud, which is a prevalent problem in property matters.

“It helps you show proof that whatever happened, you agreed with someone else. And in case of no title, the agreement helps you show proof of interest in land,” she says.

The Land Act states that the title is the evidence of ownership and that when you desire to transfer land, it is the title that is transferred.

“However, in case there is no title, an agreement of sale is as good as the titles. It is proof that the previous owner of the land transferred their rights to you through the agreement,” she says.

A land title grants the holder a legal right over the land, whereas a sales agreement grants the buyer an equitable stake in a specific piece of land.

“That means whoever wants to deal in that land—sell or develop it—must settle with you, first.”

The Involved Parties Matter

A sales agreement also depends on the parties involved in the land ownership.

Nassolo says, “If it’s a family land, then definitely there are more people involved in the land ownership who should as well be involved in the agreement.”

So, how can an intended buyer ensure that the intending seller is the only owner of the land in question before signing the agreement?

According to Nassolo, the prospective buyer must do a physical investigation of the property to determine its exact limits and measurements, among other important details.

She believes it is important to speak with as many neighbours and local officials as possible to find out “who owns that land? How they acquired it? Are there any conflicts about it, among other questions, before one decides to enter the agreement?”

“In case the land is titled, you must crosscheck with the district registry to ascertain whether the person selling is the one on the title,” she says.

Nassolo debunks the premise that leaders of Local Council I should be a party to the agreement.

“It’s not a must that they should endorse the agreement of sale, because there’s no law that says so,” she says.

She recognises, however, that because the LC I [chairperson] is engaged in practically every property transaction in the region and may have lived in the area for some time, they may be better knowledgeable about the land in question and the seller(s).

She adds, “That’s why it is safer to have them involved in business, though it’s not compulsory.”

Furthermore, the contract is transferrable. For example, if a landowner who purchased the land through an agreement dies, their kid might inherit the deceased parent’s stake in the land as evidenced by the current sales agreement.

Make it Impenetrable against Fraud

Agreements of sale, like property titles, are not immune to deception. They, too, are susceptible to forgery. However, there are methods for making them fraud-proof.

While the buyer and seller are the primary parties, Nassolo proposes that at least two additional persons serve as witnesses. Each witness must provide a legitimate identity document, such as a National ID card. Most importantly, the agreement must be recorded.

She says, “And if you need to make any transfers of that agreement, make sure those witnesses are around. For any document to have legal effect, it has to be registered with URSB.”

The Uganda Registration Services Bureau (URSB) is the sole government agency responsible for civil registrations (including marriages and divorces but not births, adoptions, or deaths), business registrations (start-ups and liquidations), and patent and intellectual property rights registration, among other things.

It is during the registration procedure that you will require the expertise of a lawyer such as Nassolo.

You will have considerably reduced the risks of fraud if you, the seller, buyer, witnesses, and lawyer, have copies of the registered agreement and the national registration has a copy.

Agreement Needed Even Without Sale

Is a contract required if a landowner just provides their land to be developed for social purposes, such as the construction of churches, mosques, or schools?

According to Nassolo, even though the title will not be transferred, there has to be a memorandum of understanding or an agreement outlining the plans for the land.

“For instance if someone is offering land to a church, there must be an agreement in respect to that such that no one will change their mind just like that.”

Avoid engaging in common verbal agreements.

She urges, “Everything should be agreed upon and put in writing. And it should be registered.”

Drawbacks of an Unregistered Agreement

The primary obstacle regarding agreements, according to Nassolo, is the incapacity to read and write the official language, English.

As a result, individuals struggle to design the agreement and express the terms: parties involved; considerations; payment and acknowledgement terms.

As a result, many settle for papers that are not registered because they cannot afford the services of attorneys. However, Nassolo contends that a document must be registered to be regarded in a court of law.

But what is the bare minimum that a lawyer can charge for such work?

It is determined by the value of the land. According to Nassolo, if the land is worth USh4 million, an advocate might seek USh300,000 or more.



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