A bird in hand, they say, is worth two in the bush. Sometimes we get distracted by our toils and concerns as we work towards that often-elusive “brighter future” that we fail to notice the things that would trip us up – neglecting our responsibilities, or failing to observe the schemes that may derail our grand plans – as we pursue even more. Enforcing your property rights and maintaining the responsibilities created by your ownership of the same is an obligation placed on every property owner.
If you own a piece of land or some form of property, the onus is upon you to ensure that you meet the obligations that come with owning that property. Most land-owners, particularly those who invest primarily for capital gains, fail to consider the possible outcomes of leaving their land unattended or, otherwise maintained by the standards of the obligations placed upon them merely by owning it. The very real risk of losing your property ownership happens at every moment and instance you, the owner, fail to enforce your rights or meet your obligations.
“Strengthening rights is dependent on strengthening the connections – conceptually and behaviorally – between rights and responsibilities.”
– Arthur J. Dyck, Rethinking Rights And Responsibilities: The Moral Bonds Of Community
Property ownership is secured and administered by law, which also clearly defines ownership, the rights and responsibilities that attach to it. Ownership rights bestow to the holder the discretion to deal with the property as they deem fit within the law. The single greatest threat to property owners rights might just be inaction on their part in securing those rights by duly exercising both the rights and the obligations created by the mere act of ownership. Sounds simplistic I know, but indulge me by reading on.
Enforcing Property Rights and Responsibilities: A Simple Comparison
Let’s draw a simple comparison, for the sake of understanding, of ownership rights and responsibilities with another asset which may be privately owned but largely operated in public, say a motor vehicle.
If you bought a car today (ok, even yesterday!), you would be obligated (by the laws of the land) to register it and operate it within certain rules. For example, you may only operate it, or cause it to be operated by a duly licensed driver. You would be obligated/duty-bound/responsible to insure it, ensure that it bears its designated registration marks, and ensure that it is operated safely and within the law. If it is involved in an accident, for example, or even say in the commission of a criminal act, you will become liable, as its owner, to the extent that the law deems. You will be required to pay any import duties and taxes before it is registered. If that vehicle is a public service vehicle, you may bear even heavier responsibility with the imposition of additional regulations as regards condition, operation of the vehicle. If you fail to meet your obligations, your rights of ownership over the vehicle may be interrupted. Your license may be revoked. Your vehicle may be impounded. It may be subjected to inspection to assess its road worthiness. You may have to pay fines and penalties for any other breaches and infractions of laws and regulations that govern the use and operation of motor vehicles that you may be subject to.
Would it be correct then, to assume any different with an asset such as land?
Enforcing Property Rights and Responsibilities: What Are Property Rights?
When you own real property, you have certain rights that go along with that ownership, including:
- Right to control and possession of your property
- The right to confer use of the property to others (i.e. the right to lease or license your property)
- Right to disposition (the right to transfer the property – by sale, by gifting or by succession/inheritance)
- Right to privacy, right to use and the right to quiet enjoyment. These include the right to exclude others or use the property to secure development finance, for example.
Complementary to these rights are several others which attach to the property on account of the ones above. For instance, the owner of a property has the right to subsurface rights meaning that they can mine valuable resources on the land (again, within the regulations permitting the mining of natural resources). If the property is adjacent to a natural water body, say a river or lake, then the owner has the right to use the water say to fish or irrigate their land or for such other permissible use. These rights are often referred to as riparian rights and may be governed by laws such as wetlands management, environmental and conservation laws. Equally, an owner has the right to use the surface of the land and may make improvements/developments to the property subject to say the zoning laws and local authority ordinances within the jurisdiction that the property falls (development rights). They have the right to use the space above the land subject to any preferential rights that may take precedence over this right. For example, a land owner situated close to an airport may be restricted from building a structure taller than a certain height, or number of floors.
You cannot protect that whose existence is unknown to you. Knowledge of your responsibilities is the surest way of securing your rights to ownership of the property. It is imperative to understand what responsibilities are created on the owner of the property because ownership is only secure if you exercise both your rights and responsibilities.
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Enforcing Property Rights and Responsibilities: Some Practical Measures
So, you’ve gone ahead and purchased a property and had it duly registered in your name. What basic steps can you take to proactively secure your property rights? You own the property but are there any natural or unintended consequences of failing to enforce your property rights? Under what circumstances could you lose your ownership rights over their property? Why would it be necessary for you to understand any of this?
Acquiring land usually requires significant financial resources and the consequences of failing to secure your property rights would, therefore, come at a high price. With the likelihood that you could lose your property, the less painful choice would naturally be to do all within your means to enforce your rights.
This list is far from exhaustive but here are some basic measures you can take to protect your property rights:
#1. Enforcing Property Rights and Responsibilities: Visit your property regularly and be appraised of its condition.
Ensure that you regularly visit the property, or have an independent pair of eyes watching over your property. This will help you establish that your right to control and possession of your property is free and clear and is not being infringed upon. In the alternative, take measures to protect your interests. This will also ensure that you are appraised of new developments in the area and understand factors influencing property values.
#2. Enforcing Property Rights and Responsibilities: Property Markers, Delineation of Boundaries, Fencing and Signage.
Ensure that you not only know the boundaries of your property, but that these are clearly delineated according to official property maps. This may require you to have your property beacons reestablished and for you to put in place physical measures, for example fencing and property signage warding off potential interference. If your property boundaries have been violated by a neighbor (encroachment) you might attempt to mutually arrive at a consensus on how to resolve the matter without undue or expensive litigation. This may take the form of hiring an independent property surveyor to delineate the boundaries afresh and to have the issue documented and recorded in the event it is required for future reference or resolution of further disputes. In the case of squatters, you will need to take more drastic measures such as reporting the matter to local authorities to have them removed. Depending on how long they have settled on your property, the period of illegal entry and occupation can allow squatters to counter your claim to ownership and might even give them access to apply to the courts to have your title extinguished. At the earliest moment, you should not only notify the authorities and the trespasser of their infringement on your property rights, but you must also demand that they immediately desist from the property forthwith. It is important that you have documentary evidence of whatever measures are taken to remove trespassers. You might also want to demand proof of any legal interest a trespasser has on your property and to document this so that they may not later rely on or adduce proof of legal interest beyond what they originally stated or provided.
#3. Enforcing Property Rights and Responsibilities: Property searches.
Ensure that you regularly undertake a search on your own property. This will help you ascertain that there haven’t been any irregular actions performed on the property that you may be unaware of or uninformed about. What would the search reveal? It might reveal any changes to ownership and/or ownership rights, any registration of restrictions against the property or such other notable information relevant to you, the owner.
#4. Enforcing Property Rights and Responsibilities: Keep up with your obligations
Ensure that you keep up with any obligations for land rent and rates, and these are maintained in your name as the title holder. This is only applicable for leasehold property. Certain rights, for instance the right to transfer property, will be impeded where you fail to meet these obligations. In the event of fraudulent transfer, you may also be able to support your claim by demonstrating that you were indeed the one who undertook maintenance over your property.
#5. Enforcing Property Rights and Responsibilities: Keep and maintain records of obligations in owners name(s)
Ensure that any utilities or services connected to the property are made out or registered in your name. Where registered in the name of third parties, especially individuals who may be leasing or otherwise using your property, they could potentially use this as evidentiary proof of exercising ownership rights to your property.
#5. Enforcing Property Rights and Responsibilities: Registration of restrictions
If you have encountered scenarios where you find people actively enquiring about your property as if it is on sale with the full knowledge that you never put the property up for sale, then you may even consider more austere approaches to protecting your property for instance registering a caution on your own property and keeping it in place as long as you hold the property.
Enforcing Property Rights and Responsibilities: Why Is This so Important?
There is an alarmingly high volume of land fraud cases and the fraud is becoming increasingly convoluted. Even more concerning for property investors, are the twin problems of squatters and illegal allocations which deprives many property owners of their rightful possession and control over their investments.
One of the more interesting cases reported in the media lately involves a case where a fraudster secured financing from a financing company which proceeded to register a charge on the property. The registered owner only discovered the fraud when he attempted to sell a portion of his property and his buyer discovered that there was a registered charge on the property after he had already paid a deposit on the agreed purchase price (which the seller then had to refund).
At issue is the contention that the financing company, which purported to issue the loan and proceed to charge the property on the basis of sound and proper due diligence, is now making a claim to dispose of the property on the grounds that the “owner” of the property had been in default since the loan was issued in 2016. The individual who had received the funds had somehow vanished into thin air and the actual, verifiable owner, now has to contend with the very real possibility of losing the property.
Did the owner lose the property you ask? Sadly yes. In this and other similar instances, there is no way to determine how the case might play out in the end. I would hate to be in the owner’s shoes being dragged into a legal tussle over a huge debt that I never benefited from and being unable, in the intermittent period, to do anything with the property as it remains the subject of a legal dispute, or as in this case, losing your property due to fraudulent act.
The court noted that the owner’s conduct showed “the image of a man who dealt with the issue in a casual manner”, that despite having reported the alleged forgery to police, he never gave samples of his signature for verification, never followed up the issue with the police, when confronted with the information that the property had been charged he still tried to sell the property and never did anything to protect his ownership rights. The owner only sought the protection of courts when statutory notices were issued and didn’t even bother to enjoin the borrower (the company that charged the property) in the proceedings, or attempt to press any criminal charges against the individual who committed the fraud. The property was valued at approximately KES 80 million and the matter is under appeal.
Can you imagine walking in his shoes?
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Before you find yourself in the middle of legal entanglement, consider how much simpler, better it would be to just enforce your property rights. Land tends to elicit a lot of emotion because of its intimate connection to human aspirations, historical injustices and cultural roots. It doesn’t help that it is also regarded as a significant measure of one’s success. Taking the steps to enforce your rights can make the difference between a long and protracted legal battle which could culminate in significant losses or the peaceful, quiet enjoyment of your labours.
The practice of enforcing your rights starts at the point of engaging to acquire the property (due diligence). But it doesn’t end there. It extends to keeping up with the obligations that ownership places on you, and a culture of maintaining your interest beyond the transaction to acquire the property or merely acquiring it for speculative purposes.
One of the simplest ways to ensure that your land is secure is to ensure that the land is under productive use, even if it is just a simple project that can generate some income.
Don’t be one of those people that tend to forget their obligations and only remember their rights. There cannot be one without the other! If you require assistance securing your property and don’t know where to start, drop us an email on info[at]realestateguru.co.ke – let’s have a conversation to see how we can help you.