• Land Regulation
• Required documents to complete the transfer Process.
• Procedures for Effectively transferring Land.
• Foreign ownership
• Foreigner occupying Land through a derivative right of occupancy.
• Certificate of Incentives
• Application for the Granted Right of Occupancy.

Overview

In Tanzania, the acquisition of land ownership encompasses diverse avenues through which individuals can obtain land from one another. These methods include purchasing, receiving as a gift, clearing virgin land for cultivation or development, inheriting through succession, acquiring through adverse possession, or by operation of law. Despite the variety in acquisition methods, the fundamental aspect shared among them is the transfer of ownership from the previous owner to the new owner. This article delves into the legal aspects of real estate transactions in Tanzania, providing valuable insights for both domestic (Citizen) and (Non-Citizen) Foreign Investors.

 Land Regulations:

The transfer of land ownership in Tanzania Mainland is governed by the Land Act Cap 113 and its amendments, and the Registration of Transactions/Documents Act. These laws govern land in urban areas that have been planned and surveyed. They are used to regulate the entire process of selling land with a registered title.

Required Documents to complete the Transfer Process

• Official Search Report
• Original Certificate of Title
• Sale Agreement/ Deed of Gift
• Land Transfer Forms
• Consent from the Land commissioner.
• Valuation Report
• Land Rent Assessment receipt.
• Tax Clearance Certificate
• Spousal Consent/ Affidavit as to marital status
• Commitment Bond (If needed).

Further, the process can be initiated by either the transferring party (seller) or the company itself. While the core steps might be similar, there will be additional company documents required if the company is facilitating the transfer.

• Memorandum and Article of Association
• Certificate of Incorporation.
• Tax Clearance Certificate for the company.
• Tax Identification Number (TIN)
• Nida of the directors

Procedures for Effectively transferring Land.

• Conducting a thorough Search

Before any transaction, it’s critical to conduct an exhaustive search to uncover any issues with the property’s title. This ensures transparency and guards against potential encumbrances. Adhering to the caveat emptor principle, buyers must verify the seller’s title validity. According to Section S.34 of Cap 334, buyers are obligated to be aware of all existing memorials related to the property upon acquisition, underscoring the importance of thorough due diligence.

• On-Site Property Inspections

Buyers should actively inquire about ongoing disputes or issues concerning the property, such as boundary disputes or access rights. A personal visit to the property allows buyers to validate the transaction’s legitimacy and assess its suitability firsthand.

• Valuation Report

A valuation report conducted by a government valuer is essential for determining the property’s fair value and potential capital gains tax implications. While the Chief Government Valuer typically oversees this process, reports from registered valuers may also be considered. Compliance with Section 41(3) of the Land Act ensures that property transfers are based on fair market values, preventing undervaluation.

• Comprehensive Sale Agreement Drafting

Sale agreements, prepared and notarized by legal professionals, serve as legally binding documents in property transactions. Delays may arise if sellers fail to provide necessary documentation or if negotiations prolong. Adherence to Section 64(1)(a) and (b) mandates written contracts for land dispositions, ensuring enforceability and clarity of terms.

• Drafting the Deed of Transfer

Completion of required landforms, such as Form No 29. 30 and No. 35 along with involvement from legal representatives, initiates the registration process with municipal and governmental authorities. Proper completion and submission of these forms facilitate smooth transfer proceedings.

• Issuance of Title Deed

Upon submission of required documents and payment of fees, authorities process the transfer, culminating in the issuance of a title deed. This document signifies legal ownership of the property. Given the complexity of property transactions, seeking legal assistance is advisable to ensure compliance and mitigate potential risks.

Foreign Ownership

In Tanzania, non-citizens typically cannot directly own land unless it’s for investment purposes. In such cases, the land must be held by the Tanzania Investment Center (TIC), which grants a Derivative Right of Occupancy.

• The meaning of a Derivative Right?

A Derivative Right of Occupancy refers to the right to occupy and utilize land, derived from a primary ownership right.

• The process for a foreign individual to acquire land under the derivative right of occupancy involves several steps:
• Land Allocation

The foreigner must identify suitable land for their intended purpose. While the Tanzania Investment Center (TIC) is responsible for land designation, the foreigner is required to first locate land that aligns with their needs.

• Application for Certificate of Incentive

Following land identification, the foreigner must apply for a Certificate of Incentive to the TIC.

• Required details for the application for the certificate of incentives.
• Name and address of the proposed business enterprise, its legal structure, banking information, and details of directors, partners, and shareholders.
• Qualifications, experience, and relevant particulars of project management.
• Nature of the proposed business activity and its intended location.
• Proposed capital structure, investment amount, and projected growth over the next five years.
• Financing plan for the investment.
• Evidence of adequate capital available for investment.
• Commitment to implementing the project as outlined in the project projections.

When the Tanzania Investment Center (TIC) determines that an applicant has met all the criteria, it will proceed to grant a certificate of incentives to the applicant.

After the incentive certificate has been granted, the applicant will proceed to submit an application for the right of occupancy to the Commissioner for Land, along with their certificate of incentives.

• Legal Requirements for the application of the Granted of Right of occupancy.
• Fill out an application form.
• Passport size photograph.
• Proof of payment of the prescribed fee
• Signed by the applicant or a duly authorized representative or agent of the applicant.
• Submitted to the Commissioner or an authorized officer.
• Accompanied by any prescribed information or information requested by the Commissioner.
• Consent or Approval from the local authority.
• Be accompanied by a Certificate of Approval issued by the Tanzania Investment Centre.

Once the Commissioner for Land is satisfied with the application from the applicant, they will publish a gazette notice indicating the land applied for, for a prescribed period. If no objections are raised during this period, the Commissioner will proceed to designate the land to the Tanzania Investment Centre (TIC). Subsequently, the TIC will lease the land to the foreigner under derivative right of occupancy for a period not exceeding 99 years.

Conclusion

In Tanzania, engaging in real estate transactions requires understanding legal requirements and procedures under the Land Laws. It involves personal property inspections to identify and be aware of any issues. Negotiating clear agreements is also an important and mandatory stage, leading to the acquisition of a title deed as proof of ownership. By navigating these steps diligently, individuals can successfully participate in property transactions in Tanzania.

Disclaimer: This article is authored by Jacqueline Hima, Head of Real Estate & Immigration from Rive & Co, a new and innovating law firm as a result of the partnership between ABC Attorneys, Stallion Attorneys and Sepia Attorneys, built on the foundation of trust, credibility, and novelty, offering expert legal solutions.  This Article is for informational purposes only and should not be construed as legal advice. It is recommended to consult with a qualified legal professional for advice specific to your situation.