In any purchasing agreement it is the duty of the buyer to beware about each and every information concerning the property before entering into the purchasing agreement. This principle applies the same in any selling and purchasing agreement of any landed property. Now it is clears that is the duty of B to beware about all information’s concerning the land he wants to buy.

Investigation and Pre-Contractual requirements.

There are several important requirements to be done prior to execution of a land sale agreement. At all times, the purchaser is advised to conduct due diligence before purchasing the property. It is at this stage that the Purchaser will be required to do site visit, official search, conducting evaluation of the property and entering into pre-contractual agreement.

Visiting Property Site

Buyer is advised to do on site verification. This will help buyer to identify a lot of things about the plot including location of the land, boundaries, physical condition of the property, conflict (if there is any with neighbors concerning the property) and other things. However, doing site visit will help the buyer to get information that will be useful when conducting official search and can also be used a bargaining tool.

Title Investigation (Official search)

The main purpose of title investigation is to understand any restrictive convent or other legal restriction like encumbrance, mortgage, lease, and easement. To identify whether the seller is the legal owner of the selling property.

The Purchaser can do title investigation and verification through visiting or making an application to the Land Registry. The intention of the search is to give the purchaser, the information about subsisting memorial of the property and assist him/her to compare with information offered by the Vendor. Once the purchaser receives the information from the land registry, he/she will be deemed to have an actual notice of every subsisting memorial of that landed property.

 

Evaluation of the Property

It is very important for any buyer of the landed property to conduct valuation to determine the current and forced sale value of the property. This will assist the buyer not only to understand the value of the property but also to avoid unnecessary unforeseen losses which the buyer may suffer due to over-valuation by the vendor. Moreover, the evaluation report will assist the parties and Tax Regulatory Authority to understand the exact amount to be taxed as Capital Gain Tax (CGT)

Pre-Contractual Agreement

The execution of sale agreement can take a lot of time and parties may change their mind in between and probably decide to engage in the same transaction with third parties. At these circumstances it is important to both parties to enter into an exclusivity agreement to restrict both parties engaging in the same transaction with third parties. It happens that parties may incur costs during pre-contractual activities such as conducting official search, site visit and other due diligences. Therefore, it is important to enter into an exclusivity agreement to protect parties from such losses and wastage of time.

 

CONTRACTUAL AND POST CONTRACTUAL REQUIREMENT

Contractual Requirement

At this stage the buyer and seller will be required to draft and execute sale agreement and transfer deed. It is very important to both parties at this juncture to make sure all-important information are included when drafting such agreements. The importance of making sure all represented information are contained in the contract is to protect the parties and give room for one to initiate legal proceedings where there is a misrepresentation of the facts.

Visiting Commissioner of Land Office for Approval and Notification of Disposition

The Law requires any person who wishes to dispose his/ her land to notify the Commissioner of Land or any Authorized Officer for such disposition. The purpose of notification is to notify the Commissioner about the disposition and changes that are going to occur on the disposed Land. The notification shall be done through a prescribed form and shall be accompanied with the evidence of receipt for payment of premium and land rent.

Land in Tanzania is belonging to the Republic and the power to control it is vested to the President who supervise all land on behalf of the public, although president is vested powers to delegate all his function to other people. Once a person acquires land either under Customary or Granted Right of Occupancy does not mean such land belong to him, he/ she only occupy that land. And if the land we occupy does not belong to us it is the requirement of the law on behalf of the Public to approve certain categories of disposition of land once a person who occupy such land wishes to transfer his/ her rights of occupation to another person. The application for approval of disposition shall be made to the Commissioner of Land or any other Authorized officer through a prescribed form accompanied with relevant documents or other documents which shall be needed by the Commissioner.

Payment of Capital Gain Tax

After the execution of the Sale agreement, parties are required to pay Capital Gain Tax. The parties are required to visit Tanzania Regulatory Authority for assessment of amount of Tax to be paid as Capital Gain Tax. This will apply only to the landed properties that have a certificate of title. At this stage parties are required to obtain a Tax Clearance Certificate after the payment is done.

Visit Registrar of Title’s Office for Changes of Ownership of Land

Once all the procedures above are completed and the parties obtained from relevant authorities, the relevant documents shall go to the Registrar of Title to transfer ownership of land from seller to buyer. The parties required to endorse the previous title registered under the name of the Seller and the Registrar will issue a new title under the name of the Purchaser.

 

Important Notice:

This publication has been prepared for information purposes only, and it does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Cymbell Attorneys, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.