INSIGHT: Key issues in property transfer and registration

Dar es Salaam. Real property is a booming industry in Tanzania, especially in Dar es Salaam. Investors and local business men and women spend their money on buildings and apartments, even in the outskirts of the city.

People buy and sell properties such as land and houses almost every day. With this rapid increase in transactions in the real estate industry it is vital for citizens to understand key issues or rather the whole process of transfer and registration of formal properties.

Formal properties in ordinary meaning refer to properties that are already registered. Such properties include those with title deeds. Formal transfer requires compliance with provisions of The Land Act No 4 of 1999 [RE. 2002], The Land Registration Act (Cap 344), The Town and Country Planning Act (Cap 355), The Stamp Duty Act [RE 2002], The Income Tax, 2004 and regulations therein. It is important to note that the following procedures are necessary for the buyer.

First, in any transfer of formal property it is highly advised to begin with on-site verification which is to be done by the buyer. This stage involves an actual visit of the area to be purchased. The aim here is to establish a physical environment of the asserted property, visiting neighbours around the area just to cross check if there is any conflict related to the boundaries of the property.

Next to this is official search. This stage is mostly done by lawyers. Official search aims at assisting the buyer to check if the seller is the real owner of the property and if the plot is free from any encumbrances such as being  registered as a mortgage.

This is done through the application of the official search at the registry of titles. This application follows submit to the appropriate land registry. In return to the application for the official search, the registrar will give a certified summary of entries on property.

This certificate will bear the name of the seller and certify that there is no registered encumbrances with the property. Besides that, is with the hope that everything has gone well at this stage and the buyer is satisfied that the property truly does belong to the purported seller.

It will now be advisable to continue to the actual signing of a sales contract. The sales agreement should contain the basics of a contract, such as authorised witnesses. It is imperative to have pictures of both the buyer and seller in the contract.

After signing of the sales agreement there should be notification to the authorised officer at the district land department. This approval in practice takes a long time. 

Further to this the law asserts under section 36 of the Land Act,  1999 [RE 2002] that any person proposing to carry out a disposition will send or deliver a notification in prescribed form to the commissioner or an authorised officer before or at the time the disposition is carried out together with the payment of all premiers, taxes and dues prescribed in connection with that disposition.

However, it is not only the buyer who has to go through this key process of transfer of registered property alone, the seller also comes into place.

It is the seller who notifies the commissioner (the district authorised officer of land administration) of his  or her intention to dispose of their right of occupancy. Normally, this is done through  land forms No 29 and No 30, which are to be completed and attached to it.

In practice it will be a  certificate of occupancy or a letter of offer and three sets of the deed of the disposition accompany the forms used for such purposes.

Subsequent to the above step, a  valuation report follows. The valuer under the Ministry of Land and Human Settlements Development will conduct a field inspection. The main aim for this to this step is to check if the land was developed according to the conditions set under the right occupancy.

If the valuer finds that the land was developed, but not in compliance with the right occupancy, then he or she will render the matter to the allocation committee or if they find that the holder maintained the conditions set in the right occupancy he or she will issue a valuation report accordingly. But kindly note that practically this is not a one-day process, it is estimated that the process can take two month.

Payment of taxes is the next step to the valuation report. The general taxes should be included, but are not limited to capital gains tax and the stamp duty tax, which are subject to 4 per cent of the valuation report. The law specifies that such taxes are to be paid by the seller.

However, the practice vindicates that at this stage the seller will normally have gone aloof.  Here the buyer is highly advised that, before negotiating the actual price of the property to be purchased it’s worthwhile to check all these taxes. If at all there they are to be paid then while negotiating he or she will include these expenses to the seller.

The payment of tax should be followed with the payment of any outstanding land rents. To know the outstanding land rents will be through the valuation report. Caution: The taxes are to be paid to the Tanzania Revenue Authority and the land rents are to be paid to the Ministry of Land and Human Settlements Development.

Next to the payment of the taxes and land rents it will be required now from the land department officer of the district land administration officer to give a notice.

The notice will be in a special form. This will be in reply to the request of the disposition that must have been given by the parties to the sales agreement.

The notice will be informing the parties to fulfil certain conditions (if any not met) before proceeding with the disposition at hand. It is not easy to determine the period of which this stage may take as it is upon the discretion of the officer to approve the compliance as indicated. Before this process, the officer will issue a certificate of approval of the disposition.

Thereafter, the stage is built around a more complex arena. We move to the office of the titles registrar office. Once one has arrived to this stage it marks the beginning of the other long process.

In essence at this stage is where the actual transfer of formal property takes place. At this stage the application for the approval and registration of disposition takes place at the main registry. This is done through land forms No 30 and 35. This application should cover the nature of the transaction and particulars of the purchaser and the attached document.

The seller should apply to the registrar specifying his  or her intention to dispose of his or her right occupancy. In the application, the seller should include, among other things, the original letter of offer, original and rent receipts up to the date of application, the original deed transfer, an approved valuation report, a valuation fees receipt and a consent fees receipt.

Next to the above there will be an entry into the presentation book, of which in the book the reception office will describe documents which have been entered for the purpose of application.

The registrar will subsequently next to this examine the documents that have been submitted for the approval of the application. Once the document he has gone through, the documents will then be submitted to the responsible officer for recommendation.

The responsible officer (assistant officer) examines the documents and gives his or her point of view and recommends to the registrar indicating to the registrar whether or not the documents should be approved for registration.

Among the many things to be evaluated are as follows to mention a few: a tamp duty and registration fee have been correctly paid, consent from the authorised officer required before registration must have been given, to ensure that the name of the owner agrees with the records, to ensure there are no encumbrances to stop the registration, that no probate and administration issues concerning the property that have been handed before and if so what were the outcome, and the correctness attestation and execution of the related documents and lastly the validity of the right occupancy.

Further to that, once the documents have been returned to the registrar he she will observe their legality. Registration of land is a complex issue and in an actual sense a risky process as the office of the registrar may get into liabilities for such mistakes. Thus, the registrar will take note if the contents of the documents fulfil all the necessary legal requirements.

The actual registration will involve filing of a duplicate or copy of the documents presented for registration at the appropriate register. The transfer will be noted on the original copy of every documents registered, recording the hour and the date of presentation.

Every duplicate or copy filed will bear the number of the volume and the folio in which the same is registered, along with the time and date of registration.

Thereafter, the registrar will issue an official copy of the registered transactions. He should seal and sign the transfer as well as the duplicate. A duplicate of the registered document should then be given to the applicant.

The process of registering a purchased property after buying and selling activities is very cumbersome. In the actual sense, the process to many has been revealed to be a tiresome one.

However, looking at the above steps one should get an idea for the reason for such a delay. It is approximated that the process takes a period from six months to one year if all documentation appears to be correct and no mistake has been made at any stage.

Kindly, note that it is very essential to be careful at each stage of the transfer as one mistake can make the whole transfer null and void, and so call for the restart of the same process again which may cost more time and resources.

The author is an associate at ABC Attorneys and a member of the Young International Arbitration Group (YIAG).