Sale of Land

14.0 Introduction
This chapter deals with sale of land. It will however be noted that as long
as land is not owned by the individual but by the state, what sale here
implies is sale of interest in land. The chapter attempts to bring together
the theoretical aspects and the more practical component of disposition or
conveyancing. Sale is one of the forms of land transfer or disposition.
Others include; will, lease, mortgage etc. In dealing with sale of land the
following common terms must be considered:- vendor-vendee, and
vendor–purchaser. The vendor is the seller while the vendee is the
purchaser/buyer.

The relationship between vendor and purchaser arises from a contract.

The contract involves several stages: (i) pre-contractual stage, (ii)
contractual stage (legally enforceable agreement), (iii) pre-conveyance
stage, (iv) conveyance stage, and (v) post completion stage to be
discussed further. Before the contract, the vendor and the purchaser must
engage in discussions/negotiations. At this stage whatever they agree
upon will be subject to the eventual contract. However until a contract is
signed and exchanged the parties are not contractually bound. 1

Generally, every contract for the sale of land imports a term that the
vendor will prove good title ie (marketable title) free from encumbrances
and one that can be proved in law. For instance, transfer for value,
mortgage, or a government grant. The vendor can do so by either
showing that he is the owner or by showing evidence to support his claim
to ownership. He must show that he is solely or with the concurrence of
other persons able to convey the whole interest/estate in the land
conveyed. Where encumbrance exists but the vendor fails to make a
disclosure in the contract, he does not show good title because the

1
Consider Spottiswoode Ballantyre & Co Ltd vs Doreen Appliance Ltd (1947) 2KB 32 at 35 and Keppel vs
Wheeler (1927) 1KB 577 at 584
purchaser is entitled to assume that the property is free from
encumbrances.

The position is different with the presence of the system of registration.

The register will disclose the encumbrances on a search by the purchaser.
The duty to establish a good title is before or at the contractual date for
completion. If the purchaser discovers a defect in title, he can repudiate
immediately. The good title in question commences with time and comes
into existence at a given time. (A bad title includes a situation where the
vendor has no title to the property at all or where the land is subject to
substantial but undisclosed latent defects in title). A doubtful title is one
which the vendor cannot prove with certainty to be good.

14.1 Requirement of Notice

The rule in contract of sale is that of caveat emptor (let buyer beware). At
common law a good root of title is a document which deals with the whole
legal and equitable interest in the land. One that describes the property
adequately and contains nothing to cast doubt on the title. However there
are certain requirements on notice which a purchaser cannot avoid once a
contract is signed.2 This requirement of notice is also reflected in our laws.
There are three types of notices namely;
(i) Actual notice,
(ii) Constructive notice, and
(iii) Imputed notice.

14.1.1 Actual Notice

A person has actual notice of all facts which he has actual knowledge of,
no matter how that knowledge was acquired. But he is not regarded as
having actual notice of facts which have come to his ears only through
vague rumours. According to section 2 of the Land Act, it is expressed as

2
Megarry at 61
‘the notice which a person has personally, of a matter or action or
document or the rights and interests of another person.’

For registered interests the statutes of registration provide that a person

will be considered to have actual notice of all that is entered in the land
register. Thus registration is deemed to constitute actual notice to all
persons for all purposes connected with the land. 3 In Tanzania statutory
notice is provided in section 34 of Cap 334 RE 2002 that every person
acquiring any estate or interest in any registered land is deemed to have
actual notice of every subsisting memorial relating to such land in the
land register at the time of acquiring such estate or interest including
registered encumbrances. Failure to discover or conduct a search to find
out about those facts is not a defence. It is crucial to know that any
person is free to inspect the land register for any filed documents, index
map or plan during office hours.4 But for the purposes of record one may
decide to launch an official search relating to the same. In such a case he
will be entitled to get particulars of the subsisting memorials in the land
register relating to the land in writing. 5 Note also that any person can
apply to the registrar for certified or uncertified copies of the memorials
appearing in the land register relating to any land, filed document, index
map or plan filed in the registry.6

14.1.2 Constructive Notice (Duty of Diligence)

A person has constructive notice of all facts which he would have acquired
actual notice had he made those inquiries and inspections which he ought
reasonably to have made. Thus, the risk of encumbrances is on the
purchaser who must satisfy himself by a full investigation of title before
completing the purchase. Constructive notice has to be implied in
transactions related to land only. 7 The standard of prudence is that of men
3
Charles H. (ed) Meggary and Wade the Law of Real Property (2000) at 118
4
Section 97 (1) Cap 334
5
Ibid section 97(2)
6
Ibid section 98(1)
7
See Eagle Trust PLC vs SBC Securities Ltd (1993) 1 WLR 484
of business under similar circumstances (reasonable man). It is important
to note that, a purchaser has a constructive notice of a fact if he:
(i) had actual notice that there was some encumbrance and proper
inquiry would have revealed what it was, or
(ii) Deliberately abstained from inquiry in an attempt to avoid
having notice, or
(iii) Omitted by carelessness or for any other reason to make an
inquiry which a purchaser acting on skilled advice ought to make
and which would have revealed the encumbrance. 8
This kind of notice can be acquired through inspection of the land and
investigations of the vendor’s title. Some questions can be asked in order
to obtain constructive notice. These include:-
(1) Name and address of purchaser /vendor.
(2) Name and address of purchaser’s /vendor’s solicitors (if known).
(3) Sale price.
(4) Whether the sale price include any chattels, e.g. carpets, curtains, gas
or electricity heater, cookers, etc. which are separately valued?
(5) In whose possession or custody are the title deeds? If the property is in
mortgage, the name and address of the mortgagee and account number.
(if any).
(6) Whether the sale dependent on the purchase of another property?
(7) Approximate completion date intended.
(8) Any boundary walls or fences maintained during your period of
ownership? If no such maintenance has been carried out, which walls or
fences do you believe to be yours?
(9) Whether there has been any dispute as to rights of way, boundaries,
etc?
(10) Any shared facilities with adjoining owners such as right of way, joint
drive-in, etc?
(11) Have any notices been served on you which affect the property?
12. Have any guarantees been given in respect of any repairs or
treatment carried out to the property, e.g., woodworm, dry rot, etc.?

8
Jones vs Smith (1841) 1 Hare 43 and Kemmis vs Kemmis (1988) 1WLR 1307
(13) Duration of the building erected?
(14) Is there planning permission (if any) in your possession?
(15) Have any alterations or changes of use been made which need
consent from the local authority or any other person or body?
(16) Was the property purchased with the benefit of a mortgage. If so, to
give particulars of mortgage.
(17) Whether the property is matrimonial or not.
(18) Where it is a company property a copy of the Memorandum of
Association and minutes of the Directors of the company.
(19) Confirmation on whether any of the following are included in the sale
and will be left on the property: television aerial, electric points, wall or
ceiling fittings, plants, shrubs, greenhouse, garden shed.
(20) Whether fixtures will be removed or not? If so, please specify.
(21) Particulars of any Fire Insurance of Householder’s Comprehensive
Policy
(22) Any breach of any covenant or condition affecting the property?
(23) The rateable value of the property?
(24) Whether vacant possession of the whole property to be given? If not
to give particulars of any tenancy to which the sale is subject.
(25) Confirmation that all the lessee’s covenants in the lease have been
duly observed and performed.
(26) If any demand or complaint been received from the lessor which has
not been satisfied or complied with?
(27) Some particulars of all service or maintenance charges paid during
the past three years.
(28) Does your title include membership of any company or society having
management of the property?9if so to provide a copy of the MEMARTs.
(29) If the property is matrimonial and whether the necessary consents
have been obtained.

In the case of Oliver vs. Hinton,10 the plaintiff was an equitable mortgagee
of five houses by deposit of title deeds accompanied by written
9
See Gondwe Z. A; Manual for Conveyancing of Right of Occupancy (1998) for further discussion
10
(1899) 2Ch 264, see also Bailey vs Barnes (1894) 1Ch 25
memorandum of deposit and undertaking by the mortgagor upon request
of the plaintiff to execute a legal mortgage. The defendant a subsequent
purchaser for value from the mortgagor of three of the houses, without
actual notice of the prior charge acquired a legal estate at the time of her
purchase. The first question before the court was whether or not under
the circumstances the defendant acquired a title free of the plaintiff’s
charge or not. The court was briefed of the circumstances in which the
defendant acquired the title. That he employed no solicitor and personally
took no part in the transaction but left it to be conducted by a former
solicitor’s clerk as an agent.

No enquiry of any kind was made by the defendant or her agent as to the
title of her vendor. No abstract of title was called and supplied. The agent
said he made some enquiry and the vendor told him that he had the
documents but they related to other property as well as to the three
houses and should not hand them over but would enter into a covenant to
produce them. The defendant never asked and did not know what the
documents of title where and never asked to see them and no document
was produced before completion or handed over when the purchase
money was paid and the conveyance executed.

It was stated inter alia that a purchaser has constructive notice if he firstly
had actual notice that there were some encumbrance and a proper inquiry
would have revealed what it was or he has deliberately abstained from
making those enquiries that a prudent purchaser would have made. The
defendant acquired title subject to the plaintiff’s equitable mortgage.

In Wilkes vs. Spooner & Another11 it was stated inter alia that if in the
circumstances a party was reasonably supposed to ask for
certain information but failed that will amount to constructive notice. 12

11
(1911) 1KB 475
12
See section 66(1)(b)(i) of the Land Act for constructive notice
14.1.3 Imputed Notice
If a purchaser employs an agent i.e. an advocate, any actual/constructive
notice which the agent receives may be imputed on him. The basis for this
doctrine is that a person who empowers an agent to act for him is not
allowed to plead ignorance of his agent’s dealings unless it is proved that
the agent intended to defraud the principal. Parties to a contract of sale
must therefore invest a lot of time in inquiring and inspecting to find out
about the property to be conveyed. The vendor’s duty is to disclose latent
defects and not patent defects. 13

14.2 Latent and Patent Defects

A patent defect is the one which can be easily seen by the eye. A defect is
not patent merely because the purchaser has constructive notice of it. It
must be one which arises either to the eye or by necessary implication
from something which is visible to the eye. 14 An obvious right of way is
likely to be patent while a tenancy, a restrictive covenant and a mortgage
are all latent defects. A latent defect is that which cannot be easily seen
by the eye. Where the vendor conceals of latent defect he will be liable for
his action. The justification for holding him liable is that it is fraud for a
vendor not to disclose a defect in title which he is aware. The purchaser
necessarily relies on him to disclose any latent defects in the property
whether he knows them or not.

14.3 Misrepresentation
A misprepresentation is a representation or statement of fact which is
false. Where the purchaser signs a contract as a result of certain
misrepresentation on the part of the vendor, he is entitled to
rescind/repudiate the contract and sue for damages. Consider sections 18
and 19 of the Law of Contract Act cap 345 RE 2002 for the doctrine of
rescission.

13
See also section 66 (1)(b) (ii) of the Land Act for imputed notice.
14
Ref. Yandle & Sons vs Sutton (1922) 2 Ch 199
Section 18 defines misrepresentation as including the following:-
(a) the positive assertion in a manner not warranted by the information of the
person making it of that which in not true, though he believed it to be true,
(b) any breach of duty which without an intent to deceive gains an advantage to
the person committing it or any one claiming under him by misleading another to
his prejudice or to the prejudice of any one claiming under him, (c) Causing,
however innocently, a party to an agreement to make a mistake as to the
substance of the thing which is the subject of the agreement.

According to section 19 where consent to an agreement is caused by inter

alia misrepresentation, the agreement is a contract voidable at the option
of the party whose consent was so caused. Note exceptions to this, where
reasonable diligence could have discovered the fraud, or where the
misrepresentation did not induce consent of the party affected, or where
he insists the contract to be performed despite the misrepresentation.
The seller has no obligation to volunteer information. The buyer is advised
to make standard enquiries on the existing disputes over the property, e.g
ownership of boundary walls, fences, right of way, ownership and
maintenance of roads and parks, planning issues etc. 15

14.4 Regaining of Possession by the Vendor

After the purchaser has entered into possession of the land the vendor
may rescind the contract for breach of the contract by the purchaser. The
vendor can do so by:
(i) Resuming possession of the land peaceably, or
(ii) Obtaining an order of possession of the land from the court and
claim for damages.
Any express / implied term which conflicts with the right to regain
possession will be inoperative. 16 For the procedure on service of notice on
the purchaser and contents of notice consider section 74 of the Land Act.
Where the vendor has regained possession of the land the purchaser may

15
Read Batholomew Ndyanabo vs Bi. Petronida Ndyamukama (1968) HCD 359.
16
Section 73 of the Land Act
apply to the court for relief17 Any express/implied term that purport to
negate this right will be inoperative. The purchaser can also apply to the
court for specific order to rescind the contract. Requiring the vendor to
refund any deposit and other money paid to the vendor. 18 Declaring that
the purchaser has a lien on the land to which the contract relates to
secure payment by the vendor. Any express/implied term which conflicts
with this right will be inoperative.
Apart from the power of the Court to issue an order of restoration or
compensation in appropriate cases (particularly to protect creditors) 19, it
cannot do so to the prejudice of a bonafide purchaser for value (ie one
who received the land in good faith and without knowledge of any fraud,
knowledge include the various forms of notice. 20

14.5 Registered and Unregistered Title

For registered land, it is important to conduct search from the land
registry department. Search helps to find out the position of the title. It
helps the purchaser to know whether the land is encumbered or not or
whether the vendor is the person registered or not. It can be carried out at
different stages of conveyance/ transfer to confirm the validity of title at
the time of signing the contract. For unregistered land, title can be
deduced by exhibiting to the purchaser the records of past transactions in
the land eg sales, grants of probate or events of death. The aim is to
persuade the purchaser that the vendor owns the land and give the
purchaser opportunity to inquire about the existence of equitable interest
otherwise he will be bound through constructive notice.

Apart from the representations that might have been made, basic physical
inspection of the property itself is essential to see whether the
representations made about the state and occupancy of the land are
valid. It is also advisable to have a valuer to make structural survey of the

17
Ibid section 75
18
Ibid section 76
19
Ibid section 70
20
Ibid section 71
property and render a professional opinion on the state of the property.
After the searches the purchaser can accept a draft contract for his
approval. The purchaser can suggest amendments or make further
enquiries based on the search and inspection.

14.6 Stages in a Conveyance

While the stages for the conveyance of unregistered land are less formal
but only as much as they can guarantee a valid title, for registered title
the following stages are vital:- (i) Pre-contractual stage, this involves
establishing the existence of the property. It involves the following tasks:-
conducting a search, conduct on-site inspection and establishing market
value of the property. The cost of conducting the search is roughly 6,000/-
shillings. This stage may take 1 to 2 weeks.
(ii) Contractual stage, at this stage the parties enter into prospective sales
agreement. It is prospective because it may be subject to certain
formalities such as approval and notification. The tasks that are involved
include drafting the sale agreement specifying the date of completion and
drafting a deed of transfer. This process may take 5 days.

(iii) Pre-completion stage, this involves payment of all levies such as rent
which depends on the valuation report, stamp duty and capital gains tax.
The tax is equivalent to 4% of the value of the property. The tax must be
paid at the tax revenue authority office. Also the stamp duty is paid at 4%
of the value of the property. Generally the stage envisages obtaining
certificate of clearance of land rent, establishing actual value of the
property, completing capital gains tax questionnaire, submitting the
questionnaire to the Income Tax Department with the necessary
attachments and payment of capital gains tax and obtaining capital gains
clearance certificate.
(iv) Disposition stage/ Completion stage, this stage requires processing of
approval or making notification21 Parties must enclose with the
applications letter of offer, transfer deed, two passport size photos for the
21
See Forms no. 29, 30 and 35 of the Land Forms.
vendor and buyer, sale agreement, receipt paid on notification of
disposition, receipt paid on application for approval, valuation report and
approval receipt, current land rent receipt, notification of disposition in
triplicate, birth certificate, passport or affidavits of birth, in case of a
company, the memorandum and articles of association, company
resolution to buy or sell the property, and particulars or directors; if the
company is foreign, a certificate of incentive for TIC and if the property is
semi-developed a commitment bond by the purchaser that he will develop
it.
(v) Post completion stage, involves parties observing their obligations at
the specified dates, compiling completion statement and ensuring
surrender of title documents by the vendor. 22It has to be born in mind that
for registered titles, title does not pass unless the purchaser lodges his
application to register the transfer.23

14.7 Legal Requirements and Terms of the Contract

According to section 64 (1) of the land Act, the contract can be in writing
or oral. Where the contract is oral it must be supported by a written
memorandum of its terms (evidence). The contract or the written
memorandum must be signed by the parties to make it enforceable.

14.7.1 Terms of the Contract

An agreement for the sale of land is similar to any other agreement. 24 It
must have the following: - (i) Parties i.e vendor (ownership of, if agent-
power of Attorney) and purchaser, (ii) Capacity, the parties must be of the
age of majority and of sound mind (consider capacity to contract under
the Law of Contract Act), 25 (iii) There should be subject matter capable of
sufficient legal definition of the property ie Right of occupancy with
physical location at..., Plot number..., etc. (iv) There should be clear
22
For a more comprehensive coverage on stages in conveyancing see Gondwe’s Manual on the Transfer of
Rights of Occupancy, URT a report by MKUTABITA (2007) and Tanganyika Law Society/Best Project
Report,; Review of The Law on Transfer of Land and Mortgages in Tanzania(2008).
23
See Stephen Kiame Sefu v Registrar of Titles (1988) TLR 127
24
See Form 38 for contract of disposition of a right of occupancy
25
See sections 11 and 12 of the Law of Contract Act Cap 345.
Intention to sale and buy (free consent), 26 (v) There must be
consideration. The contract must show how it will be paid, (vi) Others may
depend on the status of the property. If it is mortgaged a statement from
mortgagee, if there is a lease an undertaking to remove the tenant, If
there are utilities to ensure they are paid by purchaser, or if there are
rent, charges are paid by purchaser etc.

14.7.2 General Clauses in a Sale Agreemement

A contract for the sale of of land has different clauses. The contract may
adopt different styles but must have:-
(i) Commencement and Date -THIS AGREEMENT is made this..day
of ....200..
(ii) Parties -BETWEEN X of....hereinafter ‘vendor’ and Y
of .............hereinafter Pchr of the other part.
(iii) Recitals-WHEREAS..the vendor is the estate owner of ...
(iv) Testatum-NOW THIS AGREEMENT WITHESTH that Consideration - in
consideration of the sum of ...........
(v) Receipt clause- paid by the purchaser to the vendor (the receipt
whereof the vendor hereby acknowledges)...
(vi) Covenants - the vendor hereby covenants with the purchaser to pay
all outgoings.....
(vii) Operative Words -the vendor as beneficial owner hereby conveys
unto the purchaser...
(viii) Parcels- ALL THAT dwellinghouse with the flower gardens...
(ix) Testimonium- IN WITNESS WHEREOF the parties to these...
(x) Attestation Clause- Signed, sealed and Delivered by the vendor in the
presence of ...to27

14.7.3 Enforceability of the Contract

Section 2 of the Land Act defines disposition as including sale. According
to section 36 of the Land Act, disposition must comply with sections 36-40
26
See sections 13 and14 of the Law of the Act
27
See Megarry at pp 150-151.
otherwise the disposition will be void. 28 In relation to a right of occupancy
sale means a transfer of an interest in or over land on conditions attached
to the granted right of occupancy. Generally sale requires approval. 29 In
determining whether to grant an approval for a disposition or not, the
commissioner must find out whether: - the vendor has complied with all
the conditions in the right of occupancy, the price at which the transfer is
to be made is at a significant undervalue of the land, the transferee or
purchaser has any criminal convictions relating to dishonesty, fraud or
corruption, the disposition consists of the interest of risk groups i.e
displaced persons, children and any low income persons. 30

Under the Village Land Act a villager may freely assign or transfer his
customary right of occupancy to another villager or group of villagers. 31
The parties are required to notify the Village Council. 32 The Village Council
will record the assignment in the register of village land and send a copy
of notification to the commissioner.33 An assignment of a customary right
of occupancy to a person or group of persons not ordinarily resident in the
village must be approved by the Village Council. 34 The Village Council may
refuse the assignment on stated a grounds e.g it would operate to defeat
the right of any woman to occupy land held under a customary right of
occupancy.35 However where the land exceeds a certain amount the law
has put in place ceilings. In such as a case consent has to be obtained. 36
28
See the previous chapter.
29
GN 74/2001 Reg 3(f), see other instances under Reg 3(a) 4(2) (a) & (c).
30
Ibid section 40 (1), see also Form 33 on certificate of approval of disposition
31
Section 30 (1) of the Village Land Act
32
Ibid section 30 (3), see village land form no 24 on notification of assignment of customary right of occupancy
33
Ibid section 30 (7)
34
Ibid section 30 (2)
35
Ibid section 30 (4), see village form no 25 on approval/disallowance of assignment of customary right of
occupancy and form no 26 on application for approval to create derivative right, village form no 27 on
certificate of approval for derivative right, village land form 28 on application for a grant of derivative right in
the village land and village land form no 29 on grant of derivative right in the village land.
36
Reg 76 of the Village Land Regulations (2001) provide that; (1) Until such time as orders have been made
and published under regulation 74, no village council may grant or agree to grant or agree to a disposition of a
customary right of occupancy or create or agree to the creation of a derivative right in village land or out of a
customary right of occupancy which exceeds twenty hectares or which would result in a villager occupying land
in excess of twenty hectares or the maximum amount of land held by a villager in that village whichever is the
lesser amount without the consent of the District Council or the Commissioner as is provide for by his
regulation. (2) Where the application is made to the village council for an amount of land whether by way of a
customary right of occupancy or by way of a derivative right or consent to the grant of a derivative right which
is between twenty-one and fifty hectares in extent, the village council shall forward that application to the
With these provisions capitalists can now access land in the market and
the discretion of public officials has been reduced.

14.7.3.1 Failure to Seek Approval

Where the sale is not approved in case approval is a requirement, the
transaction will be inoperative.37 Where the disposition is for value
(market value) not less than market value approval is required. Also a
party will have to pay all premia, taxes and dues required to be paid in
connection with the disposition to which the certificate of approval refers,
otherwise the disposition shall be invalid or ineffective to transfer any
interest in any land. 38

14.7.4 Restrictive Covenants (Equitable negative easements)

and their Effect on the Purchaser
A purchaser can either buy the servient or dominant land. Servient land is
the land which accommodates another land while dominant land is the
one which benefits from another land. Restrictive covenants do restrict
and not grant rights. These covenants normally run with the land and are
capable of registration as burdens on the land. According to the case of
Tulk vs Moxhay39 in order for a covenant to bind the purchaser of a
servient land it must be of the following nature:- negative in nature, there
must be a dominant tenement except the landlord’s reversion, it must not
be personal to the covenantor and it must be registered.

district council having jurisdiction in the district where the village is situate together with its recommendation
on that application and shall not grant that application unless and until the District Council shall signify in
writing to the village council that it consents to that application. (3) Where an application is made to the village
council for an amount of land whether by way of a customary right of occupancy or by way of a derivative right
or consent to the grant of a derivative right which is greater than fifty hectares in extent, the village council shall
forward that application to the Commissioner together with its recommendation on that application and shall not
grant that application unless and until the Commissioner shall signify in writing to the village council that he
consents to that application.
37
Section 37(5) of the Land Act, see also form 34 for application for reconsideration of approval for a
disposition.
38
Section 39 (8) of the Land Act, see also the requirements under the Stamp Duty Act 1972, No 20/1970 Cap
189 (2002) R.E.
39
(1848)
On the other hand, the purchaser of the dominant land will take the
dominant land with all appurtenant rights if the benefit of the covenant
was assigned to him or it was annexed to the land purchased. 40

Readings
Meggary’s Manual of the Law of Real Property (1982) Chapter 12
Fimbo GM, Land Law Reforms in Tanzania (2003)
Gondwe Z, Manual for Transfers of Rights of Occupancy
Riddal, (l983), An introduction to Land Law, Third Edition, Butterworth’s,
London, Chapter 21
Burn, E.H. Cheshire and Burn’s Modern Law of Real Property 15 th Ed.
Butterworth, 1994, Chapter. 22 “The Sale of Land” pp. 749 – 806 .

40
Consider sections 66 and 67 of the Land Act