What are main grounds for losing leasehold rights?

Dear reader,

We must recognise leasehold tenure as property rights established by a lease, which is a contract between a landlord (lessor) and a tenant. Their agreement includes clearly defined terms and conditions that bind them to particulars. Such a contract grants the tenant exclusive possession of the property for a specified period. If there is no development of the land during this time, it could lead to grounds for recall or repossession. The first fundamental and yet differentiating principle in this scenario, according to the strictest interpretation of a business contract, is the comprehensive performance of the main terms.

The performance is related to the obligations designed and assigned to each party, whose fulfilment determines the status of the contract. Importantly, it does reflect the attitude and commitment, hence the faithfulness of the parties involved.

Land issues are in part addressed in Article 10, Clause (2) of the Constitution, which fundamentally promotes sustainable development as a framework for implementing Article 40, Clause (1). This article grants every individual the right to acquire and own property of any kind anywhere in Kenya. However, this right must be respected and fall within Chapter 5 of the Constitution, especially Articles 64 and 65.

There are legal and just principles underlying the intentions of Article 65, as outlined in paragraphs (d) and (e) of Clause 2 of Article 10. These principles emphasise that all aspects of resource allocation should be aimed at promoting dignity (where it is lacking), equity, social justice, inclusivity, and human rights. Additionally, such practices should prioritise good governance, transparency, accountability, and integrity.

County governments have the authority to allocate land within their jurisdictions under leasehold agreements, often to promote specific types of development. Experts categorise leasehold interests as some of the most restricted and least privileged property rights.

Several reasons may lead a county government or another authorised body not to renew a lease agreement, including the repossession or recall of the property within this tenure framework. One primary consideration for such actions is the fidelity the lessee has shown in adhering to the existing lease. Adherence to the lease agreement ensures the lessee’s rights, provided they consistently comply with the terms and conditions established by the lessor, which go beyond merely paying rates. These expectations are outlined in the Guidelines for Renewing and Extending Leases, developed by the Ministry of Lands and Physical Planning and the National Land Commission. The concept of fidelity, or lack thereof, is grounded in Section 13 of the Lands Act and is operationalised within the frameworks of the County Government Act (2012), the Urban Areas and Cities Act (2011), and the Lands Act (2012).

Section 13 (1) of the Lands Act specifically states that when any land reverts to the national or county government after the expiry of a leasehold tenure, the Commission shall offer pre-emptive rights to allocation of the land to the immediate past holder of the leasehold interest. This is provided that the lessee is a citizen of Kenya and that the land is not required by the national or county government for public purposes. Your situation can be addressed through the terms of the lease agreement, which you agree to comply with upon signing. For example, when the government advertises for public land allocation, it typically presents an offer with defined terms and conditions.

Once allocated, this offer is formalised in writing through an allotment letter, which requires the allottee to make the necessary statutory payments as mandated by law within thirty days of receiving the offer. Upon acceptance of the conditions and payment of the statutory obligations, which are solely monetary, the agreement is finalised, binding the allottee and the government. The execution of the formal lease document between the lessee and lessor, along with the issuance of a lease certificate upon registration, legally binds the lessee to the terms and conditions set by the lessor. This creates a covenant between the lessee and the lessor.