The position under Section 13 of the Land Act and Land (Allocation of Public Land) Regulations, 2017, has been that Kenyan citizens who hold a leasehold interest in land enjoy a right of first refusal (pre-emption) when such leases near expiry. Non-citizens do not have similar pre-emption rights.
In a recent landmark decision, Harcharan Singh Sehmi & Another v Tarabana Company Limited & 5 Others (Petition No. E033 of 2023), the Supreme Court provided important guidance on lease renewal, pre-emption rights, and the limits of title protection where public land is allocated irregularly.
Key Takeaways for Purchasers, Developers, Financiers and other Investors
- Pre-emption Rights
These rights must be properly exercised as they do not override the legal requirement for formal renewal and registration. This decision reinforces the importance of diligently pursuing lease renewals and maintaining accurate records of communications with the authorities. - Effect of Expiry
Upon expiry of a leasehold interest, the property reverts to the Government. Post-expiry continued possession without a renewed lease does not preserve rights or create equitable interest. Further, where land has reverted to the Government, any reallocation must comply with statutory procedures. - Legitimate Expectation
A leaseholder who applies for extension before expiry and is in continuous occupation may have a legitimate expectation that the lease will be renewed. However, legitimate expectation has strict thresholds. There must be clear communication or promise from a public authority with capacity. - Silence or Inaction by Authorities
Failure by the Government to act on a lease renewal application does not automatically amount to approval or preserve or extend the lease or entitle the lessee to continued legal ownership beyond expiry. - Limits of Bona Fide Purchaser Doctrine and
Indefeasibility of Title
A purchaser cannot rely on the doctrine of "Bona fide purchaser" or the defence of "indefeasibility of title" where the root of title is irregular or unlawful. Titles acquired in an unprocedural manner or through unlawful means are liable to cancellation. - Due Diligence
Root of title due diligence (including confirming validity of original allocation and investigating any longstanding occupation) cannot be understated. The judgment builds on the Court's decision in the Dina Management Limited v County Government of Mombasa & 5 Others Petition No. 8 (E010) Of 2021 (Dina Management case) which we discussed in our previous alert. - Remedies
Legal remedies are available, and courts may reinstate lapsed leaseholds if a renewal application had been made in time, order evictions, and award substantial damages where unlawful allotments result in loss or demolition.
Background
H.S. Sehmi and J. Sehmi (the Appellants) were the registered
leasehold owners of a parcel known as Land Reference Number
209/2759/9 in Ngara, Nairobi (the Property), having bought it in
1968. They had a 59-year lease, commencing in 1942 and expiring in
October 2001. At least three months prior to the lease expiry, the
Appellants initiated the process of seeking a lease extension.
Despite correspondence from the Commissioner of Lands and "no
objection" letters from the Director of Physical Planning and
the Director of Survey, the lease was never formally extended.
In 2009, the Property was allocated to Rospatech Ltd (the 2nd Respondent) who subsequently sold it to Tarabana Co. Ltd (the 1st Respondent). The Appellants were evicted in 2014, prompting litigation in the Environment and Land Court (ELC) challenging the eviction and the legitimacy of the 1st Respondents' title.
Litigation History
Environment and Land Court (2019)
The ELC found in favour of Appellants, held that their lease
renewal application gave rise to legitimate expectation and
declared the allocation to the 2nd Respondent unlawful and that the
subsequent transfer to the 1st Respondent was tainted by the
irregularity and fraud.
Court of Appeal (2021)
The CoA overturned ELC's decision on the basis that at the time
the Property was allocated to the 2nd Respondent, the
Appellants' lease had expired, and the Property had reverted to
the Government. The court also held that the 1st Respondent was a
bona fide purchaser.
Supreme Court (2025)
The Supreme Court overturned the CoA's decision, and held
that:
- First, by the time the Property was allocated to the 2nd Respondent, the lease had expired and the Property had reverted to the Government.
- Second, the allocation to the 2nd Respondent was unlawful, having failed to comply with the procedures under the repealed Government Lands Act.
- Third, the 1st Respondent was not a bona fide purchaser since the 2nd Respondent was incapable of passing a valid legal title, having acquired the same illegally. Further, the 1st Respondent did not conduct adequate due diligence and had constructive notice of the irregularities.
- Lastly, the Appellants had a legitimate expectation that their lease would be renewed.
The Court consequently ordered the Chief Land Registrar to cancel the title that was issued to the 1st Respondent and to restore the Appellants as the proprietors of the Property upon payment of applicable registration fees. The 1st Respondent was ordered to demolish structures and developments on the Property within 6 months. Notably, the 1st Respondent had created a charge over the Property which was consequently extinguished upon cancellation of the 1st Respondent's ownership interest.
This decision serves as a landmark restatement of land tenure principles in Kenya. It is now clear that formality and procedure matter just as much as possession and good faith.
Contributors
- Amollo Simba – Associate
- Eden Nyagah – Trainee
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
