LEASES IN UGANDA

Getting a Leasehold Title

Dennis Obbo, spokesperson for the Ministry of Lands, Housing and Urban Development (MLHUD),
outlines the requirements of acquiring leasehold title, noting;

 An applicant must first fill in Forms 8, 10, 18, 23.

 Attach a set of three original deed plans.

 Accompanied by three passport photographs.

 Attach receipts of payment.

 Add a forwarding letter requesting a leasehold title signed by the district land officer in the same
district.

 Applicants must present the complete set of original documents and attach photocopies of the
same documents to the land administration department for perusal.

“If the photocopy is stamped ‘received’ and returned to the applicant, the applicant checks with the
Department of Land Administration after 10 working days to confirm their approval or rejection, and is
given a letter of advice on the fees to be paid,” Ssentongo explains.

He says that the individual requesting the leasehold title must pay stamp duty, which is 1% of the
premium and ground rent. That paperwork is signed and stamped by the district land board chairperson.
Lastly, the secretary of the Uganda Revenue Authority (URA) embosses the documents.

The expenses involved include 1% of the premium and ground rent paid to URA; registration costs USh
10,000; guarantee of title at USh 20,000; issuance of title at USh 20,000; and lease preparation at
Shs20,000, all of which are paid at the ministry or district.

Terms and Conditions of Lease

A typical lease agreement includes the names of the landlord and tenants, as well as terms and
conditions of the lease, including;

 The purpose of the land, or what you want to do with it, should be specified. For example, you
cannot have property leased to you by the National Forestry Authority and then use it to erect
commercial structures.

 It is critical to consider how long someone intends to use the land. For example, if you plan to
cultivate pine trees, Ssentongo suggests a 20-year agreement because pine takes 15 to 20 years
to develop.

 The payment details, such as the premium and yearly instalments, should be explicitly indicated
in the agreement.

 The contract should also specify the size of the agreed land.
Kiganda says, “Depending on the agreement, “The landlord should also have a right to inspect and
monitor his land to determine if it is used for the intended purpose. Also, there should be use and time
factor limitations. For instance, if you agreed to use the land for seasonal crops, you are not supposed to
grow long-term crops such as coffee or pine that require lengthy growing periods.”

The agreement should also have the following;

 The contract should indicate the terms of termination, and both the tenant and landlord should
be free to end the arrangement.

 The lease agreement should explicitly state the automatic renewal clause, subject to the
period’s terms and conditions. (Should indicate the expiration date).

For example, if you rented land 49 years ago, the premium and rental costs may have been much lower
when compared to today’s purchasing power. As a result, these values should reflect today’s equivalent.

“Upon expiry of the lease, a tenant may have accumulated a significant amount of valuable property and
assets and may not wish to lose them. Oftentimes, the landlord may claim their property after expiry. So
the clause of automatic renewal protects the tenant against discontinuity. It is to the tenant’s best
interest to include the automatic renewal clause to his lease agreement. The automatic renewal clause
protects a tenant’s personal property from claims by the landlord at lease expiry,” Kiganda remarks.

Transfer Rights

A tenant may give another individual their lease right by selling their lease before the lease term expires.
The new tenant must be introduced to the landlord and will remain bound by the lease’s terms and
conditions until it expires.

Kiganda says, “It is also possible that a tenant does not totally go out of the lease agreement but instead
sub-leases the land to another person.” “In the situation where I do not want to sell my lease, the
agreement should mention the freedom of subleasing to third users.”

Lawfully, both parties, the tenant and the landlord, should be safeguarded. Hence the agreement should
cover even the topic of death.

“If the landlord or tenant should die during a lease term, the surviving party is expected to honour the
lease. The heir to the property usually becomes the person in charge of the property after death,” he
says.