Renewal Of Land Leases In Kenya

Under Kenya’s previous Constitutions, foreigners were allowed to acquire land from the government of Kenya on a leasehold tenure of 999 years. However, the 2010 Constitution of Kenya brought with it radical land reforms which saw the consolidation and harmonization of all laws pertaining to Land in Kenya. Therefore, the current lease tenure for foreign nationals is determined by the Land Control Act and the Land Registration Act. The Constitution grants the right of ownership of land in Kenya by any person although like many rights it is not absolute. The current Kenyan law gives the maximum lease tenure for non-citizens at 99 years (Article 65, Constitution of Kenya). However, the length of the lease may be shorter, depending on the location and intended use of the land. For instance, land leased for commercial or industrial purposes may have shorter lease tenures compared to residential or agricultural land.

The Constitution further provides that as at the effective date when the legislation was enacted, any land previously held by a foreigner for a period exceeding 99 years would automatically revert to the government and that if a foreigner held a freehold interest in land, it would convert to a leasehold interest (8 th Article of Sixth Schedule, Constitution of Kenya). The purpose of this specific restriction of ownership by foreigners was an attempt to correct historical injustices where foreigners had absolute control over land for unreasonable durations, i.e. 999 years. As far as can be established, the NLC has not issued notices of conversions.

Renewal And Extension Of Leases

Lease renewal for foreign nationals in Kenya may vary depending on the circumstances and location of the land. There is a prescribed legal process to be followed. The Land Act has empowered the National Land Commission to create regulations and rules pertaining the renewal and extension of leases in Kenya (Section 13, Land Act). In light of this, the Ministry of Lands and Planning together with the Commission have created guidelines under the Land (Extension and Renewal of Leases) Rules 2017 which involves the following key
aspects: –

• Issuance of Notice of Expiry of Lease
  The National Lands Commission is expected to inform a lessee (person who was granted a lease), through a notice that their lease is due to expire 5 years before the expiration date. This notice is usually delivered by mail and gives the lessee a pre-emptive right to seek a renewal or an extension of the lease. Where the person notified does not respond within a year, the same is published in a local daily newspaper with a wide circulation. The consequences of not taking action is that once the expiry date is passed the lease is extinguished and the land is reverted back to the government.
• Procedure for Extension or Renewal
  Application: The foreign national must submit an application for lease renewal to the National Land Commission way before the expiry of the lease. The application should include the current lease agreement, proof of payment of the renewal fees, a copy of the national ID or passport, letters of administration or confirmation of grant, where applicable, a current official search not older than 1 month, a passport size photograph and a certificate of incorporation in the case of a company. The application must be made by a registered proprietor of the land or an appointed administrator. The Commission, upon receipt, will forward the application to the relevant bodies within 7 days of receiving it. Where the land falls under the National Government, the application is sent to the Cabinet Secretary, Ministry of Lands and Physical Planning whereas if it falls under a County Government, the application is referred to the County Executive Committee of Lands for approval. Assessment: The Ministry will assess the application to ensure that the foreign national meets the eligibility criteria for lease renewal, and that the proposed use of the land is in line with the relevant laws and regulations.
  Approval: Once the assessment is complete, the Ministry will either approve or deny the renewal application. If approved, the Ministry will issue a renewal certificate to the foreign national.
  Payment: Where the lease is granted, the government will have the land re-valued to determine the payable land rates while the lessee surrenders the existing title for a new one as well as a letter of allotment. This determination is usually done within 90 days. The foreign national must pay the renewal fees, which are typically calculated based on the value of the land, the length of the lease, and other relevant factors.
  Signing of lease renewal: The foreign national must sign the renewed lease agreement, which outlines the terms and conditions of the lease renewal.
  Registration: The lease renewal agreement must be registered with the relevant land registry office in Kenya.

Several factors are considered when choosing to extend or renew a lease. These include the payment of land rates, any encumbrances on the property, evidence that the lessor complied with the terms of the lease, and their citizenship. The application may be rejected for reasons such as if the government wants to use the land for public use; or if the land is in a restricted zone such as urban areas. Citizenship is a factor because there are restrictions on the ownership of land by foreigners. When an application is rejected, the lessee is granted a right of appeal to the appeals committee and further to the Environment and Land Court. Of note, the government or relevant county may grant a lease but subject to a stipulated condition. For example, our firm was involved in a lease renewal dispute by Del Monte where one of the relevant counties had pegged
their approval to a ceding of approximately 50 acres for public use by the county. Del Monte as lessee challenged this condition in court.

In our next blog, we will look into the restrictions that foreigners may endure when they are seeking to lease land in Kenya.