THE+UNIT+TITLES+ACT Compressed
THE+UNIT+TITLES+ACT Compressed
THE+UNIT+TITLES+ACT Compressed
Abstract
The article examines the Unit Titles Act, its background, prospects and enforcement
challenges. It is clear that the enactment of the Unit Titles Act aimed to inter alia ameliorate
the problems associated with urban housing by providing for division of properties into units
where common areas on land may be shared, including facilities and services thereupon. This
form of common property ownership provides economized costs by spreading the cost among
the occupiers.
The article surveys the various modes of disposition through which a person can acquire or
transfer a unit property in Tanzania. The modes include sale, lease and mortgage. The article
notes that there are challenges that impinge on realization of effective disposition under the
Act. Hence, there is need for an effective legal and institutional regime for the Act to achieve
its intended objective. Laws like the Land Act, Registration Act should be harmonized with
the Unit Titles Act. There should also be robust, well-coordinated administrative machinery
to ensure effective development and transfer of unit title properties. Such effort should go
hand in hand with improving the capacity of the relevant land departments in the office of the
Registrar of Titles and Local Government Authorities.
Key Words: Unit Titles, Unit Title Properties, Disposition, Unit Plan, Transfer
1.0 Introduction
In 2008 the Government enacted the Unit Titles Act, Act No. 16 of 2008. The
enactment of the Act was considered to be3 one of the Government’s
initiatives4towards addressing housing problem5 attributed to poor physical
planning, lack of appropriate framework, lack of long term housing finance
(mortgage finance), absence of real estate development, weak management, poverty,
lack of cash to buy or build decent home and increased urbanization.6When
1Senior Lecturer at the School of Law of the University of Dar es Salaam, a senior Advocate and a part time lecturer at the Law
4 Other previous efforts include the establishment of the National Housing Corporation in 1962, revolving Housing Loan Fund
through circulars No. 8 1962, and No. 4 of 1965, establishment of Building Research Unit (BRU) and Housing Cooperative
Societies, Establishment of Ardhi Institute and Centre for Housing Studies now, Ardhi University etc. See the National Human
Settlement Development Policy (2000) pp 10-20.
5Wan Nor Azriyati Wan Abd Aziz, Noor RoslyHaniff, ZairulNisham Musa, AinorizaMohdAini, Abdul GhaniSarip and
ZafirahZyed, in the paper, Vertical Living Phenomenon in Malaysiadefines condominium solution as vertical living phenomenon
solution.
6NkyaTumsifu, the Director of Housing Ministry of Lands Housing and Human Settlement Development on ‘the Housing
Question’ presentation in the preparations for the Unit Titles Act., ZelalemYirgaAdamu, ‘Institutional Analysis of
Condominium Management System in Amhara Region: the Case of Bahir Dar City’ notes that, housing is one of the basic
assessing the trend in condominium7 properties and the challenge of urban housing
Kironde noted that, some urban property owners live in ‘archetypes’ of
condominiums but given the enactment of the Unit Titles Act some of the properties
will have to be transformed in order to comply with the framework of the Act.8 The
properties were merely informal condominiums, based on some form of co-
occupancy9 which resulted from the lack of an appropriate legal framework.10 So, the
article endeavours to examine some of the prospects and challenges associated with
the introduction and application of the Unit Title Act.
The above provision was intended to formalize the occupation as well as conferring
upgraded status to informally held urban land. In general however, this was an
initiative towards improving not only tenure security but also residential livelihoods
of urban dwellers. As a result, about 90,000 licences were issued and the duration of
the licences was extended from two to five years to provide more time for further
necessities for human beings and […] it is a [more] critical problem for millions of poor people in developing countries, in
African Review of Economics and Finance, Vol. 3, No.2, June 2012, p 13. See generally the urbanization problem in Ghana,
‘Urbanisation And The Challenges Of Development Controls In Ghana: A Case Study Of Wa Township’ in Journal of
Sustainable Development in Africa (Volume 13, No.7, 2011);Tenga W. The Condominium Property Model in Tanzania: An Overview,
presentation at the Tanganyika Law Society, CLE, Workshop Dar es Salaam, 2009. See also the URT, UN-HABITAT joint Report
on Housing Finance, 2003.
7According to Tracht, Hofstra LJ, 1999, in a condominium development, each property owner has an individual interest in a
defined parcel of property, and shares in the ownership (typically as tenant-in-common) of various common spaces and
facilities. Thus, in a typical multi-unit residential development, each owner owns an apartment unit plus a proportionate
interest, with all of the other owners, in the common elements, such as hallways, lobby, elevators and recreational facilities.
This hybrid form of ownership can be contrasted with a cooperative, in which a corporation owns the real property, with each
shareholder in the corporation being entitled to a proprietary lease to a specific apartment.
8Kironde L. Land Governance Study, Tanzania Report, World Bank Nov 2009. p. 56.
9Ibid, p. 62.
10 See Tenga W. The Condominium Property Model in Tanzania: An Overview, presentation at the Tanganyika Law Society, CLE,
horizontal growth.
12 See Clause 6 of the National Land Policy (1995).
13 Ibid.
14 No. 4 of 1999, [Cap. 113 R.E. 2002].
formalization.15 The enactment of the Urban Planning Act, 2007, 16 read together
with the Land Act, provides room for regularisation of informal areas.17 Areas like
Makongo, Ubungo Maziwa in DaresSalaam, and Isamilo, Ibungilo in Mwanza
communities organised themselves and sought to regularise their areas and get
official recognition of their regularisation plans.18 However, these efforts did not get
official approval19 which rendered the opportunity for upgrading residential
properties through formalization to be a suspect option for many informal
landholders.
The other option for the control of urban sprawl was the necessity of introducing
property ownership that would recognise horizontal ownership as well as utility
management arrangements that would favour cooperative living. The best
proposition was to consider the condominium form of property holding. According
to Masinde, writing in 2006, the land laws did not allow the development of
condominium property in Tanzania. She suggested the need to enact an appropriate
law that would provide for creation, management and disposition of condominium
properties.20 James notes, in 1971, that most problems associated with operation of
condominium schemes were inherently linked to the common law which was
applied in Tanzania.21 He suggested by then the enactment of an appropriate legal
framework that would promote the operation of condominium properties in
Tanzania.22 Although his work was published in 1971 such law did not see the light
of the day until 2008 when the Unit Titles Act was enacted.
With the Unit Titles Act in place, it has been expected that the challenge of urban
housing in Tanzania will be ameliorated as it provides for the development of unit
title properties across the country. Prof. Tumaini Nkya, the former Director of
Housing in the Ministry of Land, Housing and Human Settlement Development, in
his paper notes that:
19 Ibid.
20 See ScholasticaMasinde, Establishment & Management of Sectional Properties in Dar Es Salaam, MSc. Dissertation in Real Estate,
UDSM, 2006.
21 See James W. Land Tenure and Policy in Tanzania. East African Literature Bureu. Nairobi. (1971), this was equally noted by
Tenga W. in his presentation The Condominium Property Model in Tanzania: An Overview, presentation at the Tanganyika Law
Society, CLE, Workshop Dar es Salaam, 2009.
22 Ibid.
23 See also Tenga W. &Mramba S. The Unit Titles Framework in Tanzania: An Introduction, 2016 presentation for TLS Law Lectures
So, enacting the Unit Titles Act was a mechanism to solve the problems associated
with urban housing.24Nkya accepted the position proposed by both James and
Masinde in that the laws in Tanzania inhibited development of unit title properties
as it restricted division of property vertically not horizontally.25
Despite the shortfalls in the legal framework, unit title properties have been deemed
to be economical and efficient in terms of land use and provision of social services.26
The unit properties provide a mechanism where common areas on land may be
shared, including facilities and services thereupon.27 This form of common property
ownership provides for economized costs by spreading the cost among the
occupiers. The enactment of the Unit Titles Act introduced for the first time the
concept of condominium property in Tanzania, named the unit title property, as in
jurisdictions such as Australia.28 The Act defines a unit as a portion of property
which is owned by a specific owner exclusively, or co-owned29 by joint occupiers for
the exclusive use of several owners.30 This means therefore that, instead of the
person owning or occupying the entire property he can only own or occupy a
portion in the property which could be less expensive to buy the whole property.
Unit title properties can be developed in rows, clusters, or high rise.31 The law
regulates the management of such properties by providing legal and institutional
framework to that effect. In addition, to ensure better enjoyment of unit title
properties the law provides for the issuance of certificate of unit titles to unit
owners,32 including management and resolution of disputes arising from the use of
common areas and services within the whole property.
Therefore, with the introduction of the Unit Titles Act, 2008, developers can use the
framework of this statutory scheme to develop unit properties in Tanzania. As noted
in the preceding paragraphs, one of the notable features of housing problems in
Tanzania was lack of mortgage financing. The enactment of the Unit Titles Act
(UTA) led to the enactment of the other laws such as the Mortgage Financing
(Special Provisions) Act (2008)33 which amended other laws such as the Land Act,34
24Ibid, See op cit, fn 20 ScholasticaMasinde, see further Tenga W. &Mramba S. Presentation at the Registrar of Titles Workshop,
Ramada Inn, Dar Es Salaam, 15.03.2010.
25See section 53 & 83 of the Land Registration Act, Cap. 344 R. E. 2002.
26 See Clause 6 of the National Land Policy (1995).
27 See Section 6(3) of the Unit Titles Act for shared properties.
28 Under section 5(1) and (2), a unit property includes a single building or several buildings comprising of sections of unified
site together with the land on which they are located and all real rights existing in their favour. The unit property may be in the
form of high rise structures or in rows or terraces. or in buildings in a cluster form.
29 Section 6(1) provides that [o]wnership of the common areas of the property shall be divided into fractions belonging to one or
co· owners, and every co-owner shall hold an undivided right of ownership in the common areas equal to the relative size
several
for their exclusive use and certain portions of the same property are held in coownership for common use.
31 See section 5(1).
32 See also section 9(2) & (4) of the Unit Titles Act.
33 Act No 17 of 2008.
34 [Cap 113 R.E. 2002].
Civil procedure Code,35 Magistrates’ Courts Act36 and the Land Registration Act.37
These amendments were strategic in that they aimed to enable the financial sector to
play its critical part in the development of urban housing in general, including unit
titles in particular, by creating the environment where property developers and
buyers could get secure financing.38 While the Act was seen as the nexus for
promoting development of decent homes it is almost nine years since its enactment
in 2008 but development of unit title properties under the Act is so far mostly carried
out by parastatal developers such as; the National Social Security Fund (NSSF),
Parastatal Pension Fund (PPF), Avic International, Watumishi Housing Co. Ltd and
National Housing Corporation (NHC). In a consultation with the Housing
Department of the Ministry of Lands, Housing and Human Settlement Development
it was found that there is a need for more public involvement since the extent in
which unit title properties are developed is still low and the market is not vibrant
despite the myriad of benefits associated with the Act.39 The next section will survey
some of the issues that could impinge on the efficiency of this law.
The Unit Titles Act and regulations made thereunder provide for procedures for the
development of unit title properties. The procedures are elaborated under sections
14 and 15 of the Act and Regulation 9 of the Unit Title Regulations (2009). Although
the tasks enumerated under the sections as shall be seen are clear however,
development of a unit title property must commence with obtaining a valid land title
under the Land Act. In that case, the developer will have to buy or apply for the
grant of right of occupancy under the Land Act.40 He must also do initial
consultation with experts such as estate agents, land surveyors, valuers, lawyers and
planners to get preliminary guidance on the proposed development.41
The UTA specifically stipulates that, the developer’s unit plan must conform to
certain requirements.42 He must submit the unit plan to the Registrar of Titles for
registration. The Registrar under the UTA is mandated to register unit plans.
However, before registration the Registrar must satisfy himself that the unit plan has
complied with all requirements. He must, for instance, ensure that the unit plan is
headed as a unit plan and the delineation of the external surface boundaries of the
common property and the location of the building are clearly indicated.43 The plan
must have a drawing illustrating the units and distinguish the units by numbers or
40 See section 25-30 for the application for granted right of occupancy.
41 See the NHC and MLHHSD, Manual for the Operationalization of the Unit Titles Act, 2011.
42 Unit Titles Act, section 14.
43 Unit Titles Act, section 14(1) (a) & (b).
other symbols and define the boundaries of each unit in the plan.44 In addition to the
boundaries, the approximate floor area of each unit has to be clearly shown.45 The
plan must be supported by a schedule specifying the unit factor for each unit in the
common property in whole numbers46 to show how much area in the common
property each unit would be assigned. There must also be a statement containing
sufficient particulars to identify the title to the common property.47 The applicant
must have procured specified certificates under section 16 of the Act.48
According to section 16, every application for registration of a unit plan must be
accompanied by certain certificates. There must be a certificate from a registered
land surveyor showing that the structure on the plan is within the external surface
boundaries of the common property, the subject of the plan.49 In case there are
projections beyond the external boundaries, it must be shown that an appropriate
easement50 has been granted as an appurtenance to the common property.51He must
secure necessary building permit / consents which will enable him make application
to the registrar of titles for approval and registration of the unit plan. The consent is
signified by a certificate from a local government authority52 showing that the
proposed division of the structure as shown on the plan has been approved by the
local authority and it conforms to any enactment regulating land use and building
construction.53 Lastly, there must be a certificate from a registered architect54
indicating that the plan correlate with the existing structure before it is registered.55
The certificates outline above must follow the prescribed format under schedule 10
to the Regulations.56Such application will have to be accompanied by fees.57Once the
above are fulfilled, the Registrar must ensure that the unit plan is signed by the
proprietor or developer and there is a corresponding address.58 Where the law or
regulations prescribe any other particulars, then the applicant must comply
accordingly.59 Also, if the unit plan includes residential units, in addition to the
above requirements, the plan must indicate a demarcation of the boundaries of the
areas that are to be leased under section 9(3) of the Act.
49 Section 15(a).
50 Ibid, see sections 21-23 for easements.
51 Ibid.
52 See the functions of Planning Authorities under the Urban Planning Act section 28 and section 59 (e) of the Local
Government (Urban Authorities) Act, No. 8 of 1982, [Cap. 288 R.E. 2002].
53 Section 15(b).
54 Section 22 and 23 of The Architects and Quantity Surveyors (Registration) Act, Act No. 16 of 1997 makes it mandatory that in
order for a person to provide the services of an architect he must be registered short of which he will be committing an offence.
55 Section 15(c).
56 Ibid.
57 Where the application is for turnkey project the fee will be Tshs. 50,000/- while for phased project each extra phase will be
The implication of the above requirements is that, the developer of a unit title
property must procure certified experts to advise on the area for construction, plan
and compliance with building regulations. Obtaining the certificates implies cost and
time which must be borne by the developer in undertaking the above tasks. Since,
the application for the certificates involves different offices there could be delays
which may discourage all those involved in the project chain such as financiers,
potential buyers/tenants and intermediate parties. Therefore it is important that the
developer set aside adequate time and financial resources to accommodate the
processes to be done.
Since a unit under the Unit Titles Act amounts to an object of real property, its
acquisition and disposition can be through various modes of conveyancing.
Generally, in the disposition of real property in order to have a transfer there must
be an acquisition. Thus, as the transferor/seller disposes there must be a willing
transferee/buyer to acquire. The two parties are central in the transfer or disposition
of property. The Land Act60 employs the term disposition to imply inter alia transfer
of an object of ownership or (sic) or right of ownership or occupancy.
The section outlines the forms of disposition or the ways through which transfer of
property can take place. Since in real property discourse property includes a right of
occupancy, it therefore implies that disposition inferred under section 2 of the Land
Act is disposition of a right of occupancy.61
In the context of the Unit Titles Act,62 each unit of a unit title property constitutes a
distinct object of real property and may be the subject of disposition by the owner in
whole or in part.63 So, while the Land Act views property within the context of right
of occupancy, the Unit Titles Act views property in the context of units. In any case
as between the two what is vital is occupation. Occupation could be of land or
building or portion in a building, hence the Unit Titles Act deals with occupation of
units. Under the provision that governs dispositions under the UTA is section 28
which provides that:
‘[s]ubject to the provisions regarding the dispositions affecting land under the
Land Act, each unit of the property constitutes a distinct object of real
property and may be the subject of disposition by the owner in whole or in
part.’
Hence, what the section implies is that no disposition can be carried out under the
Act without complying with the provisions of the Land Act that governs disposition.
So, in order for a disposition to be valid it must follow all the requirements for a
valid disposition under the Land Act. This takes us to the theory of transfer under
the Land Act that includes writing, consent and approvals etc.64
‘[t]he disposition under subsection (1) shall include sale, mortgage, transfer,
grant, partition, exchange. lease, assign, surrender or disclaimer, creation of
an easement, a usufructuary right or any other servitude or interest in a right
of occupancy, and in each case, the fractional share appurtenant to the unit, as
well as the right to use the appurtenant restricted common areas, where
applicable.’
The dispositions envisaged under the above section are similar to those provided
under the Land Act. The incidents of unit titles and those for specific dispositions are
similar to those of the right of occupancy since a unit title is a derivative of a right of
occupancy.65 What has been added is the fractional share of the unit owners and any
restricted common areas.66 In that view, the provisions on disposition under the Act
should be ready together with the provisions of the Land Act on disposition. In
section 6 of the UTA the fractional share appurtenant to a unit may not be alienated
separately from the unit or be the object of an action in partition.67Alienation of a
divided section of a unit cannot have no legal effect unless the by-laws of co-
ownership68 and the plan of the property have been altered prior to the alienation so
as to create a new fractional share.69
5.1 Sale
From the foregoing, the developer of a unit property can dispose his units. The
disposition can involve sale, lease, mortgage, partition or any other form of
disposition permitted under the Land Act.70 The first form of disposition that this
article looks at is disposition by the developer by way of sale. The Unit Titles Act
allows the developer to transfer by sale, unit(s) or proposed unit(s) prior to
completion or after completion to willing buyers.71 The validity of the sale depends
on adherence to the provisions under the Land Act72 but in addition, the seller
(developer) must deliver to the purchaser several documents.73 He must deliver a
copy of the sale agreement which contains the matters set out in the 17th Schedule to
the Unit Title Regulations (2009).74 He must give the existing or proposed by laws in
the 14th schedule75 and existing or proposed management agreement.76 He must also
provide existing or proposed recreational agreement77 and any lease of the common
property which the unit is subjected to.78 He must give the certificate of title in
respect of the unit or proposed unit79 and any charge or proposed charge which may
affect the title of the unit80 and the unit plan.81 In case of a charge or proposed
charge he must deliver to the purchaser a written notice indicating the principal
amount under the charge82 and the maximum monthly payment.83 He must state the
amortisation period84 and the grace period, if any.85 In case there are pre-payment
terms he must state it86 including the interest rate or the formula for determining the
interest rate.87
Essentially, the above disclosures are part of the buyer’s due diligence.88 With such
details the buyer can make informed choice on whether to buy or not the property.
So, the requirements of the provision are more of consumer protection mechanisms89
intended to ensure that sellers do not take unfair benefit of purchasers’ information
gap. If the seller has not given all the documents mentioned above to the purchaser,
70 See the forms of disposition under section 2 of the Land Act and section 28(2) of the Unit Titles Act.
71 Ibid, section 29 (1).
72 Ibid, section 28 (1).
73 Ibid, section 29 (1).
76 Ibid, section 29 (1) (c), see also matters set out in the 11th Schedule to the Regulations.
77 Ibid, section 29 (1) (d).
he may rescind the sale agreement within 10 days after the date of its execution
without incurring any liability90 with a refund of monies paid.91 In case all the
documents have been delivered to the purchaser in less than 10 days before the
execution of the sale agreement the purchaser cannot rescind the agreement.92 Here
the law imports a timeline within which certain thinks should be done. The time
limit guard buyers against speculative sellers who may jeopardize the interest of
their clients.93
Where a unit owner who is not a developer wants to sell his unit, he must furnish to
the purchaser certain documents.94 He must provide copies of the by-laws,95 current
budget and financial statement96 of the Association97 and a certificate containing a
statement of the amount of assessments for common expenses.98 He must also
provide the amount of unpaid common expense due and payable and of any other
fees or charges payable by the co-owners.99 The Owners’ Association will have to
provide copies of all documents and certificates required within 10 days of request
by the owner subject to payment of the costs of reproduction.100 The purchaser will
be bound to pay all common expenses due in respect of that unit at the time of the
acquisition but he cannot be liable in excess of the amount shown in the sales
certificate of the Association.101
5.2 Lease
The other possible form of disposition under the Act is leasing.102 As far as leasing is
concerned, it is the owner of a unit who may lease his unit.103 In case the developer
develops a unit title property and retains some units for himself then he can lease
such units. Also, the developer can lease where after developing the unit property he
does not want to sell but simply lease; in such case he will be deemed to be the
owner of the units since they will still be in his name.104 In such case there will not be
an Association but the developer will have to register bylaws.105 An association can
only be registered after five or more unit have been sold.106
94 Section 29 (1).
97 Ibid, see section 35 for the formation of the Unit Owners’ Association.
102 See more discussion on incidents of leases in Willy T. & Sist M. Conveyancing and Disposition of Land in Tanzania: Law and
104 See the implication of section 11(3) and section 46 of the Act.
105 Ibid, see section 35 (4).
106 Ibid, see section 35 (3).
5.3 Mortgage
113 According to section 2 of the Land Act, a mortgage is an interest in a right of occupancy or a lease securing the payment of
money or money's worth or the fulfilment of a condition and includes a sub-mortgage and the instrument creating a mortgage.
114 See part X of the Land Act.
Generally, apart from the clear import of the provisions of the Unit Titles Act, there
have been challenges in smooth operation of the unit title market in the country.
Such challenges could be attributed to a number of factors. Since the enactment of
the UTA, the operating latitude required condition precedent to be effective.126The
process of obtaining unit title has not been simple. It has been time consuming a
disappointing terrain to the parties involved namely the developer or seller thus
stifling the unit titles market.127 As may well be appreciated, developing unit title
property requires huge investment involving several actors such as; developers,
financiers, unit buyers, and intermediaries such as architects, surveyors, lawyers,
planners, engineers etc.128 So, development of a vibrant unit title market calls for
effective interplay of all these actors.129 The process also requires the involvement of
the Commissioner for Land and planning authorities. Consultations with the
authority having responsibility for town and country planning in the area where the
land is situate; the local authority having jurisdiction in the area where the land is
situate, any other authority whose consent to that change of use is necessary130is
crucial to advise on the suitability of the use for planning purposes. The
Commissioner will also need to endorse any change of use on the certificate of
126 See for instance the enactment of the Mortgage Financing (Special Provisions) Act 2008 which called d for the amendment of
the Land Act, Magistrates’ Courts Act, Civil Procedure Code and the Land Registration Act.
127 TLS CLE Workshop Deliberations on the Conveyancing: Issues and Challenges held in Arusha from the 22-23 Feb, 2016., see
Condominium Property Model in Tanzania: An Overview, presentation at the Tanganyika Law Society, CLE, Workshop Mwanza,
19th June 2009.
129 See Willy T. &Sist M, presentation to the Department of Housing on the Unit Titles Act held at the Ramada Hotel Dar es
planning and building permit consent from appropriate local government authority as provided for under Part IV of the Urban
Planning Act, 2007.
occupancy;131 sign the endorsement with his official seal and by the occupier; and
ensure the applicant has paid all premia and additional rent have been paid in
accordance with the terms and conditions subject to which the change of use is
granted.132Sometimes there could be a legal requirement of obtaining a certificate of
title in case the land for developing the unit title lacks one or it is questionable and it
requires clearance.133 This by itself could take over six months up to a year.134 In
other cases, the developer could be changing a land use from one category to
another.135So, during these processes, time is of essence and could be a critical
impediment.
Furthermore, the other challenge that confronts both developers and unit buyers is
the cost of developing and selling or buying of units. This results from the fact that
both the developer and the unit buyer quite often get financial facilitation from the
banks.136 Due to the risks inherent in financial lending, banks have been strict on
their lending terms thus affecting the unit title market.137 One of the stringent
conditions is the incorporation of buy-back clause in the mortgage deed, requiring
the developer in the event of default by unit buyers who purchase through mortgage
financing to be willing to buy the unit.138 This approach has put an extra burden on
the developer thus forcing him to sell at a much higher price to cushion the risk. The
increased sale price affects the purchasing power of unit buyers thus impacting on
the potency of the unit title market. Buy back is not reflected in the law but it is
increasingly becoming a practice that requires law to regulate and set criteria for
banks and developers in order to exercise such option.139
Also, the above challenge goes hand in hand with the rate of taxes that the unit
seller/buyer must meet. These taxes include capital gains, Value Added Tax (VAT)
and stamp duty all of which cause increase in the property price. Consequently,
while the motivation behind the UTA is to promote decent housing, this is being
affected by the price and the rate of taxes which hikes up the cost for acquiring the
units including properties intended for low end consumers.140 There is a need for
considering the taxes involved in the transfer of such properties such a special VAT
and Capital Gains Tax and the manner such taxes should apply. For instance, VAT
134 See the Word Bank Report on the Ease of Doing Business in Tanzania 2016, that globally, Tanzania stands at 133 in the
ranking of 189 economies on the ease of registering property in Sub-Saharan Africa it scores 51.37 out of 100 compared to
Botswana that scores 67.25, see pp 45 & 46 of the Report.
135 See section 35 of the Land Act for change of use.
136 Op.cit, fn 10, the institutional structure for the implementation of the Unit Titles Act in Willy T. &Sist M. Presentation on the
2015.
138 Consider for instance, the NMB common mortgage clauses in mortgage offer letters and optional buy-back agreements.
139 Ibid.
on these properties should be reassessed if the focus is to promote decent home and
discourage informality. The Capital Gains tax could equally be reduced.
In addition, sometimes the developer might need to consolidate multiple plots to get
enough space for developing the unit property.141 In such case, a different procedure
as stipulated under the Land Act will have to be employed which might take up to a
year to accomplish.142 So, while the Unit Titles Act has introduced a new property
ownership regime under which ownership can be defined horizontally or vertically,
still depends much on the framework and implementation of the provisions of the
Land Act and the Land Registration Act.143 As noted, these delays do not only affect
the process of transfer but also the parties involved. For instance, to the lawyer it
could imply higher cost and fees for undertaking the exercise.
Also, although the Unit Titles Act is in place and enforced, some of its regulations
relating to transformation of existing buildings are not ready.144 The implication of
this is that there are numerous archetypes of unit title properties that cannot be
brought to the realm of unit title framework.145 For instance, while it is well
appreciated that transfer of subtitles has been going one such subtitles though
related to unit title properties they lack the basic tenets of a unit title properties that
is unit owners’ association, common properties/ areas and individual units.146
Although the last two could be present but the first one for a unit owners’
association cannot be met.147 So, these properties find themselves outside the
framework of the appropriate framework of the UTA rendering the security of the
subtitle buyers unwarrantable. Much as subtitles are archetypes of unit tittles the
property buyers hold a subtitle while the head or main title is held by another
person who can tread it in some other deals.
Furthermore, since its commencement in 2009, the UTA has not been well
understood by the public including the to-be implementers.148 So long as UTA,
introduces a new property ownership regime its enforcement requires an increased
knowledge above the traditional knowledge of land law or real estate. The issues
inherent in transfer of unit title properties are different from the transfer ordinary
properties. For instance, the one will have to consider; if there adequate insurance
for the whole of the unit title development; if there is a recent building valuation to
support the amount of insurance; if the buyer can afford quarterly levies; if there are
141 Ibid.
142 Ibid.
143 See sections 9(1) & (2) of the Unit Titles Act that [t]he provisions of the Land Registration Act relating to registration
techniques, procedures and practices shall, unless otherwise provided in th[e] Act, apply to the registration of land dealing
with units under the [Unit Titles] Act. A certificate of title issued in respect of a unit comprised in a Unit plan registered under
this Act shall, upon registration of the plan, be deemed to have been issued under the Land Registration Act;
144 Consider MLHHSD (2010) call for proposals for the drafting of Transformation of Existing Archetype properties Regulation.
145 See Scholastica Masinde op.cit fn 20.
any special levies planned; if there are any outstanding building works, unpaid
invoices, etc. that could result in a special levy; if there is any weekly or monthly
tenants in any of the common areas; for example, where someone hires a garage or
storage space.149
One must search the land transfer register at the office of the Registrar of Titles to
make sure that there are no separate dealings in relation to the common property by
the current registered owners. If the unit title property has an adequate sinking fund
he must take into account the age of the building, the current state of repair and the
type of construction. Where there is annual sinking fund he must find out if
allocation is adequate.150 He must consider the current balances in the administrative
and sinking fund account. He may also wish to find out any current or proposed
litigation matters involving the Owners’ Association.151 In case there are limitations
or restrictions on the use of common property which may affect the buyer, he must
find out what they are.152 If there are any outstanding public liability claims
involving the Owners’ Association he must also consider they nature.153 In case there
are restrictions or conditions or any alterations to the unit that have been approved
by the Owners’ Association such as installation of an air conditioning unit he must
consider their implication to his interest.154
The above issues are even more pronounced when it comes to sales before
completion.155 In pre-completion sales, the buyer has the task of ensuring that there
are adequate representations and warranties so that he can get appropriate remedy
in case there is breach of the representations.156 So, the contract must be well drafted
and the terms must be carefully considered by the buyer. The buyer must also
incorporate both precedent and subsequent conditions depending on the nature of
the transaction;157 for instance in case the buyer depends on mortgage finance or it is
sold before completion there must be conditions precedent and if the transfer is
subject to Commissioner for Lands’ or Registrar of Titles’ approval there must
conditions subsequent.158
149 See for instance, Nicole Tan and Sumathi Murugiah, Law and Realty: Problems Faced by Owners of Strata Title Properties,
151 Ibid see also Sam Butler, Should you buy property off the plan? Available at https://www.mywealth.commbank.com.au/property
accessed on 25.05.2016.
152 Ibid.
153 Ibid, see also State of New South Wales, Strata living: What you need to know about living in your strata community
available at www.fairtrading.nsw.gov.au.
154 Ibid.
155 See section 30(1) of the Act, that sale can be before completion.
156 See James Home Ratings, The 4 Key Risks in Off-Plan Purchases , available at http://marketnews.com.au/2010/07/the-4-
key-risks-in-off-plan-purchases/Accessed on 25.05.2016.
157 Ibid, see Tina L. Stark, ‘Thinking Like a Deal Lawyer,’ in 54 J. Legal Educ. 223 (2004).
158 Ibid.
‘[a] person or a group of persons whether formed into a corporate body under the
Companies [Act] [Cap 212] or otherwise who is or are non-citizens, including a
corporate body the majority of whose shareholders or owners are non-citizens, may
only obtain - (a) a right of occupancy for purposes of investment approved under the
Tanzania Investment Act, 1997;160 Or (b) a derivative right for purposes of
investment approved under the Tanzania Investment Act, 1997; or (c) an interest in
land under a partial transfer of interest by a citizen for purposes of investment
approved under the Tanzania Investment Act, 1997 in a joint venture to facilitate
compliance with development conditions while section 20 (1) provides that,[f]or
avoidance of doubt, a non-citizen shall not be allocated or granted land unless it is for
investment purposes under the Tanzania Investment Act.’
In view of section 20(1), the law does not take away the possibility of grant or
allocation of land to a foreigner or foreign company. Also under section 19(2) above,
it is apparent that a foreigner or foreign company161 can be granted a right of
occupancy as long as the land will be used for investment purposes and such
investment must have been approved by the Tanzania Investment Centre (TIC).162
Where the foreigner does not get a right of occupancy he can get a derivative right, a
partial transfer by a citizen which could include leases, licenses or a joint venture. In
all these cases, the precondition is approval of the investment by TIC. It is however,
debatable that much as the unit title market is an investment opportunity but one
requiring huge investment capital whether a foreigner or foreign company can apply
and be granted land under the section for developing unit titles and sell the units to
potential buyers in the market. Some foreign investors like AVIC International in
Kigamboni did apply but got derivative rights.163 The problem with derivative rights
in unit title properties is the limitation on the right of disposition. In this case, the
developer will have to sell through the TIC and the sale agreement will have to
incorporate provisions that are part of the developer’s terms with the TIC. Also, the
developer will be selling subleases not right of occupancy which most buyers would
not need. These properties have also raised concerns from house financing
institutions as to whether the title based on derivative interest is sufficient to
guarantee an adequate security rendering unit buyers ineligible for loans on the
basis of such properties.164 But also, since the buyers are citizens it is not clear why
163 Comments from participants in the TLS CLE seminar on Conveyancing: Issues and Challenges, held in Arusha, Feb. 22-24,
2016.
164 Ibid.
they should get a derivative right and not a right of occupancy under the framework
of unit titles.165
While some of the problems as noted above are linked to the legal framework, there
are also administrative issues that call for re-consideration of the working
approaches in order to speed up transactions involving unit title properties.166 For
instance, while the law may predicate a certain process to be undertaken the manner
such process is undertaken results into undue delays hence affecting the transfer of
unit properties. In view of complying with the requirement of section 14 and 15 of
the UTA, on issuance of certificates 167 sometimes there has been unnecessary
bureaucracy especially on issuance of certificates from Local government authority
to certify that the unit plan conforms to the building permit.168 The practice has been
that the building permit ought to be issued by the Municipal Director while in actual
sense the building permit is issued by municipal engineer.169 Perhaps there is need to
amend the provisions that requires the Municipal Director to sign the Certificate of
Local Authority and instead mandate the Municipal Engineer to sign the same to
reduce bureaucracy.170
165 Ibid.
166 Op cit, fn 133.
167 Section 15(1) of the UTA provides that [a] unit plan referred to in section 14 shall be accompanied by- certificate of a
registered Land Surveyor to the effect that the structure shown on the plan is within the external surface boundaries of the
common property which is the subject of the plan, and if there are projections beyond the external boundaries, that an
appropriate easement has been granted as an appurtenance of the common property; and a certificate of a local authority to the
effect that the proposed division of the structure as shown on the plan has been approved by the local authority in accordance
with any enactment regulating land use and building construction and; a certificate of an registered architect in case the unit
plan is of an [existing] building or structure that is to be brought under the operation of the Act before the plan is registered to
the effect that the units indicated in the plan correlate with the existing structure.
168 Op. cit,fn 133.
169 Ibid.
170 Ibid.
171 Ibid.
requires computerization of the process for handling and managing unit title
transactions. Since it has been noted that sometimes files may be needed by more
than one office at the same time then the need for completing and operationalizing
the Integrated Land Management Information System (ILMIS) championed by the
MLHHSD is needed now, more than before.175The system would fast-track handling
of unit title applications and transfers.
Administratively further, there has been inadequate capacity of the Land Registry
which is exacerbated by the additional tasks from the UTA where the RoT is the
central figure. This will require expansion of the registries and addition more
working facilities and manpower. To ensure effective expediency and coordination,
the ILMIS initiative will lend a great support. In addition, District land offices seem
to have been overwhelmed by multiplicity of land related transactions since the
enactment and operationalization of the Unit titles Act introduced new work load,
while offices remained understaffed and the same budget constraints- Recruitment
of more staff and adequate budget allocation.176
It is also well appreciated that since the UTA introduces a new property scheme; so
more work is needed to provide awareness and knowledge among players
(municipalities, office of the registrar and others) in handling Unit Titles
properties.177 Any training to the key players will apparently help to partly address
the problem of delays which could also be attributed to lack of adequate
competence.178 Awareness should also be created among architects, surveyors,
planners on the requirement of section 14 of the Act.179 This may also involve liaising
with the relevant professional bodies to ensure knowledge of the law is widespread,
public campaign to the public in general of the enforcement of the legislation.
Lack of body to regulate the real estate sector implies that there has been increased
mushrooming of real estate industry sector.180 Such increase has led to poor services
and posed risk to property buyers due to lack of regulatory machine. In a demand
driven property market the need for controlling the operations of such actors is
exceedingly important. In condominium property /unit title schemes the risk posed
to the consumers is even higher due to the nature of the properties in question. The
since the developer can begin advertising unit prior to completion, the buyers need
to have assurance that their vested interests will be secure and the quality of the
property will be guaranteed.181 Also, the buyer needs assurance that the property
175 Ibid.
176 Ibid.
177 Ibid.
178 Ibid.
179 Ibid.
180 Ibid.
181 Ibid.
will be delivered on time and the quality of the fittings, fixtures and other
accessories is warranted.182
Sometimes developers may also submit their applications for registration to the
Ministry of Lands, Housing and Human Settlement Development (MLHHSD) for
approval after sale while at the same time there could be pressure at the MLHHSD
from the banks to obtain unit titles for mortgage purposes, ensuring that unit plans
are registered before construction starts.183 This implies that applications for unit title
should be lodged before sale. So far, there is no mechanism to recognize the interest
of the bank before the registration of the mortgage.184 So, the law should recognize
the interest of the bank even prior to the issuance of the Unit Title Certificate
otherwise there should be creation of temporary documents.185
From the foregoing, it is clear the enactment of the Unit Titles Act was an important
development in the real property sector. However, such requires an effective legal
and institutional regime in order to achieve the intended objective. Laws like the
Land Act, Registration Act should be harmonized with the Unit Titles Act. Also,
since the Unit Titles Act was intended to inter alia ensure efficient development and
transfer of unit title properties, such object will be hard to attain without a robust,
well-coordinated administrative machinery to enforce it. This effort should go hand
in hand with improving the capacity of the relevant land departments in the office of
the Registrar of Titles and Local Government Authorities.
Moreover, as it has been noted, there is limited public awareness which renders the
implementation of the law less effective. Hence, there is need for broader public
engagement to ensure that there is adequate awareness. All necessary intermediaries
such as real estate developers, real estate agents, lawyers, financiers, architects,
valuers /appraisers, suveryors, and planners should be involved for smooth
operation of the law.
NOTES TO CONTRIBUTORS
1.0 Introduction
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is inviting submission of articles of substantial legal merit. Each manuscript we
receive is scrutinized in an extensive review process. The decision to publish an
article is based on many considerations, including the significance and timeliness of
182 Ibid.
183 Ibid.
184 Ibid.
185 Ibid.
the topic and quality of the writing. The articles must focus on enhancing legal
practical skill and promoting legal education. The LST Law Review articles address
diverse legal issues and no article shall be accepted for publication before a first draft
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The LST Law Review Editorial Committee works diligently to select articles that are
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exceptional cases where the article makes substantial contribution to the field of
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