Lawyers: why closure of land registries hurts us

The Law Society of Kenya (LSK) wants the Cabinet Secretary, Ministry of Lands to halt the plan to temporarily close lands registries in order to address legal gaps and enable stakeholder consultation.

The Lands Ministry had last week indicated that it will close the Nairobi and Central Registries for three weeks, from February 24 to March 13, 2020, for auditing of records.

According to the public notice, the closure also includes the Records Office and the banking hall at Ardhi House.

Outgoing LSK president Allen Waiyaki Gichuhi argues that considering issues relating to land are emotive, consultation should have been sought before closure of the land registries.

“In the circumstances, we demand the immediate withdrawal of the public notice, to enable engagement with stakeholders on how the audit can be achieved without compromising the sanctity and integrity of the registration system and the rights of members of the public,” said Mr Gichuhi.

He says that as land transactions are generally time sensitive, closure is likely to result in frustration of various contracts where obligations of parties are tied to timelines dependent on functions of the land registries.

“This may also have cost implications where certain payments to parties in transactions are pegged on certain milestones such as stamping or registration of instruments.”

There is also a statutory timeline under the Land Registration Act (LRA), for registration of instruments with consequences for default. The public notice does not address this statutory gap.

Section 36(4) of the LRA provides for the payment of an additional fee other than the registration fee, in the event that an instrument is presented for registration later than three months from the date of the instrument.

A company that creates a charge and fails to lodge the same with the Registrar of Companies for registration before the deadline for registration, commits an offence under the Companies Act and on conviction, the firm together with its officers are each liable to a fine not exceeding a million shillings.

“The closure of the Land Registries will expose companies purchasing a property and charging it to secure financing. Sequentially, the registration transfer at the Lands Registry should precede registration of the charge at any registry,” Mr Gichuhi.

He adds that the closure will occasion significant financial exposure to various entities whose transactions fit this criteria.

The LSK has sued the Attorney General, the Lands Cabinet Secretary Farida Karoney and the Principal Secretary Dr Nicholas Muraguri over a notice to close the Nairobi and central registries at Ardhi house.

High Court Judge Weldon Korir has temporarily suspended the notice for closure of the Nairobi and Central Registries.