How fake title deeds expose innocent buyers to losses

Picture this: You have done due diligence before buying a parcel of land, but the court dismisses the title deed as fake. Should you be protected as an innocent purchaser?

This was one of the fundamental questions Environment and Land Court presiding judge Justice Oscar Angote asked during the fourth regional research conference.

Angote said that at the heart of Kenya's land registration regime is the Torrens system.

Section 26(1) declares that a certificate of title shall be taken by all courts as conclusive evidence of ownership, subject to two exceptions: where the title was obtained through fraud or misrepresentation involving the proprietor or where the title was acquired illegally, unprocedurally, or through a corrupt scheme.

Angote said the courts have consistently cancelled titles that were fraudulently acquired, ordering the reversion of such land to the rightful owners, including government entities.

He cited a case of the Ethics and Anti-Corruption Commission versus Ogonji and another, where the court found that property allocated to a private developer had been illegally acquired and rightfully belonged to the Kenya Railways.

In another case, the court cancelled titles issued to private individuals, holding that the land in question was not available for allocation as it belonged to the Kenya Prisons Service.

Angote said for a long time, the persistent challenge in the fight against land fraud was the legal standing of an innocent purchaser.

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“Is such a purchaser to be protected, or would he have to yield to the rightful owner whose title was unlawfully extinguished?”

The judge said the dilemma raises a deeper legal and moral question. “How far should a prospective buyer go to verify the legitimacy of a title? Is a search at the land registry sufficient, or is the buyer required to go beyond the register, examining the history of ownership?”

Section 14(7) of the NLC Act provides that, “No revocation of title shall be effected against a bona fide purchaser for value without notice of a defect in title.”

Angote said for years, the provision was subject to different interpretations by the courts.

He cited a case involving Tarabana Company Limited versus Sehmi and seven others, where the Court of Appeal held that a purchaser who was not involved in any fraud or illegality should be deemed a bona fide purchaser for value.

The decision has since been overturned by the Supreme Court.

Conversely, in Arthi Highway Developers Limited versus West End Butchery Limited and six others, the Court of Appeal rejected such a claim, firmly stating that “fraud vitiates everything” and that no valid title could pass, even to an innocent third party.

Angote said the Supreme Court’s decision in Dina Management Limited versus county government of Mombasa and five others decisively addressed the issue.

The court held that the constitution does not condone the acquisition of a title founded on fraud or illegality, regardless of the purchaser’s innocence. Article 40(6) provides that the right to property does not extend to any property that has been found to have been unlawfully acquired.

The apex court reaffirmed this stance in Torino Enterprises Limited versus Attorney General.

Angote said the decisions have profound implications on the required land reforms. “They signal a shift from absolute reliance on the register (Torrens system) to a more contextual, justice-oriented approach. The decisions place a greater burden of due diligence on purchasers, lawyers, agents, and land officials.”

He added, “But, then, what happens to people who rely on land registers and get conned? Should the government indemnify such people? Would that not encourage fraudulent activities? Should land registrars take personal responsibilities?”

Angote cited Hamran Ahmed Salim versus the Cooperative Bank and others (2024), where the Mombasa ELC ordered two land registrars to personally pay damages of Sh7 million for “acts of misfeasance in public office.”