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23 September, 2020

Nkhani Mchitumbuka

Malawi News Updates

Buying land in Malawi

Understanding Land as an Asset in Malawi

Land Asset is the greatest asset any civilization or country could have. Its importance can never be overemphasized. Dwellings, agriculture, industries, etc all need land.

Nomadic societies when faced with the question of shortage of land or deteriorating land quality, they would simply relocate to more pristine parts of the earth. But as population began to grow, that was/is no longer viable.

As a result, societies began naturally developing some sort of rules to regulate use and ownership of this important resource. The creation of countries and borders also meant people could no longer just abandon an area and migrate to another place.

Before the coming of Europeans, land use in “Malawian” societies was guided by customary law. This is the totality of the customs, traditions, rules and regulations handed down from generation to generation orally and differ from culture to culture

In most of the Malawian societies, at custom, no one would own land in their own right. The Chief was the custodian of the land but on trust for his people. Thus the Chief could allocate or re-allocate land for use to his people and no one had a right to sell the land.

When the Europeans came, however, they introduced the concept of buying land in the country (thus implying individual private ownership of land). They bought land in present day Blantyre, Thyolo and Mulanje and from Yao Chiefs around the area sometimes even for a bottle of whisky

This was clearly alien to local customary law as the land was not the Chief’s to sell but he was merely trustee holding it for his people. In fact, even his people simply held the land on trust for future generations. They had no right to sell.

Nevertheless, the Europeans had come with their own understanding of land use and ownership. Since by this time Europe had already industrialized, they had this idea that land is put to its best use when the occupier of the land has some security of ownership to the land.

In England, land was owned by individuals called Lords who would then rent it out to those who had no land through periodic leases. Lease periods could be as little as a month to as high as 99 years. Even the Crown (government) could own land and lease it to individuals.

The above system was transplanted into Malawi and a number of customary land areas were converted to allow for this private ownership of land. Blantyre CBD was one of the earliest to be converted after the Blantyre Mission, some Europeans and some Indians had bought the land

This meant that this foreign system of land ownership had to exist side by side with the customary system of land use and ownership within the same legal system. To this date, this is an ongoing legal issue that continues to cause problems some of which I’ll explain later.

Concepts and Terms: Let’s now move away from history and delve into some of the commonest terms in the land ownership discourse

Freehold: This is the absolute ownership of land. There is no other superior owner of the land but yourself and this is not just for a period but forever until you or your successor decide to sell it to another person who will also own it in freehold.

Leasehold: This type of land ownership stems from freehold ownership. Technically, it is not land ownership because you don’t own the land but you have the right to use the land for the lease period be it 33 years or 99 years. At the end of the lease, the land reverts to owner.

The Malawi government has adopted this idea and also created some leasehold interests out of Customary land.

Title: In Land Law, title refers to the cumulative rights which a person has in relation to a particular land. For instance, if you ‘bought land’ from MHC, you have leasehold title to that land while MHC have freehold title to that land. You both have title but different rights.

Title Deeds: Historically, selling land in England was by way of what is known as conveyancing. Everytime land was sold to a new buyer, the conveyancing was supposed to be recorded on a deed which also showed past conveyancing that had taken place. It was called the Title Deed.

Thus, the title deed was a record of transfers that had taken place on a particular land as well as evidence of current ownership of that land. When they saw that this was inefficient, the English introduced land registries which we adopted as well and I will explain later.

Factors to consider when buying or selling land

Selling and Buying Land In Malawi: As I have stated above, there are different types of land ownership systems in Malawi, and add to that the different types of title, the process of selling or buying land in Malawi is different on a case by case basis.

But before I go into the details of the different ways to sell or buy land in Malawi, let me explain land registries or land registration.

As I stated earlier, the English decided that registering deeds was laborious and inefficient and hence moved to what is termed Torrens Title land registration system. Under this system, the State keeps a record of land transactions and issues out Certificates as proof of title.

While in the Deeds Registration system you write the whole history of the transactions on the land, and your evidence of title is the Deed, in the new system, the history is kept by the State and you only record the current transaction and proof of title is issued by the State.

Since not all land in Malawi is registered land, only parts of the country, especially urban areas use the new system. All other transfers are done under the old system of Deeds Registration.

If you want to buy/sell freehold land, you will have a sale agreement then transfer of land prepared by your lawyers, relevant fees paid (Registrar General, MRA, City Council or Commissioner of Lands, and Land Registrar) and the government will issue a new Land Certificate

If you want to buy/sell a lease, you will have a sale agreement then transfer of lease prepared by your lawyers, all fees paid (Registrar General, MRA, MHC or City Council or Commissioner of Lands, and Land Registrar) and the government will issue a new Lease Certificate.

If you want to buy/sell customary land with no lease, an agreement is prepared with the effect that the Chief is witnessing that one of his people is ceding his use of land to another person for a fee termed compensation not price. Remember customary land cannot be sold.

Once that is done, you become entitled at custom to use that land. However, for purpose of security you are advised to apply for a customary lease from the minister of lands. The process involves surveying and mapping the land and obtaining relevant approvals from the DC.

There has currently been changes made in relation to the role of Chiefs in the management including transfers of customary land. Moving forward, once it’s actualized it will be Community Committees in charge and not Chiefs alone.

If you want to buy/sell a lease which is on customary land, your lawyer prepares a deed of assignment of lease which after payment of the relevant fees is registered with the Deeds Registry in Lilongwe. That Deed signifies new title.

Pertinent Issues: I will finish by discussing some of the common questions asked generally and those raised on my earlier tweets about this thread.

Effect of termination of lease: Ideally, once the lease ends whether by agreement or breach of contract or effluxion of time, the rights revert to the freehold owner and this includes any immovable property on the land.

However, I believe constitutionally, the lessee has the right to renew the lease and the lessor cannot arbitrarily refuse to honour that right else the lessee will be entitled to claim for damages. These, in cases where the lessee has built buildings for instance will be huge.

I have however yet to see a decision of our courts on what happens after the 99 year lease has expired which is what would advise us on the proper interpretation to make of this law. For now, we will wait to see what happens when one expires and the lessor refuses to renew…

Land for farming

Foreigners Owning Land:

The law has placed a number of restrictions on foreigners acquiring land in Malawi. For instance, a foreigner cannot acquire an interest in land exceeding 50 years unless it is shown to the minister that a greater interest is needed for investment. (Fertile ground for corruption)

Effectively, a foreigner should not own freehold title in the country unless they owned it prior the law being enacted. This is because it is virtually impossible to show that you need a freehold title for investment. Surely a 99 year lease should suffice at most?

Again, foreigners cannot gift land to each other. They can only sell it. And to sell land to a foreigner, a citizen must have the right of first refusal. This means that the land must be offered to the public at a price determined by the government to be the true value.

If a citizen fails to buy the land, then the foreigner may buy it but remember subject to the 50 year rule stated above, with the explained exception as well.

In practice, I have realized that most of the people we think are foreigners in Malawi actually have the Malawian passport. It is therefore imperative that in discussing this aspect, we tackle our passport security as well. Maybe even do a passport audit.

Closing remarks

In closing, I will state that some of the most challenging cases I have had to do in Land Law in my short stint at the Bar oscillated on issues around reconciling customary land tenure and the english system and mentality.

Let me give you food for thought: “A chikamwini family, allocated land by the Chief, they build a good house on the land, the wife later dies and leaves the husband with 3 children. Who does the land belong to?”

Have a good day. And Oh questions are welcome!