Concern over leasehold registration

Obstacle to productivity on resettlement farms

21 June 2017 | Local News

Less than 10 leaseholds were registered at the deeds office by 2016 even though more than

5000 people have been resettled on farms countrywide.

This is according to a new report released by the Legal Assistance Centre (LAC) in cooperation with the Namibia University of Science and Technology. The Namibia Agricultural Union (NAU) has expressed grave concern about the figures released in the report.

“It is of great concern that to date less than 10 leaseholds are registered at the deeds office out of nearly 5 000 resettled famers, which already have the advantages from this resettlement programme,” said NAU.

According to the union, the problem is that is that these leaseholds are not accepted as security by banks or other financial institutions and that they are not transferable.

According to the report, no real rights in land can be considered to be transferred from one person or entity to another unless those rights are registered at the deeds office.

The objective of the study is to give input for a policy framework with regard to leaseholds for especially resettlement farmers.

“This therefore raises the question as to the legal status of any real rights expected to be transferred through any allotment or lease that is not registered at the deeds office.”

The report raises the question whether any allotment letter from the lands ministry to an individual, or even an unregistered lease agreement, carries with it the effect of transferring any real rights in land from the lessee to the lessor.

“The registration of leaseholds at the deeds office was even slower, with only six lease agreements over land allocated under the national resettlement plan registered by April 2016. This is a very low figure, bearing in mind that the ministry has resettled more than 5 000 beneficiaries,” says the report.

According to the report, during the financial year 2013/14, “a total number of 11 lease agreements were handed over to the notary public through the attorney-general's office for preparation and lodgement in the deeds office.”

Moreover, the report points out that the actual number of lease agreements issued and registered does not approximate the targets set for the strategic planning period 2013-2017.

Over this period, the lands ministry intended to grant a total of 620 notarial lease agreements.

“These low registration figures should be of concern to policy makers and implementers, and they raise a number of questions which require critical analysis.”

It said a major concern about legalising transactions in leased resettlement land is that short-term considerations will lead to beneficiaries selling their rights, and hence becoming landless again.

It said financial institutions will remain hesitant to advance loans if foreclosure involves having to clarify land rights.

The report found that there are two major reasons for the lack of registration of leaseholds.

“Firstly, there seems to be a general lack of information about the process and requirements for registration among beneficiaries, implementing agencies, and financial institutions. The second reason relates to financial, technical and other capabilities of the beneficiaries as well as the economic potential of the parcels, rather than the leasehold registration process itself.”

The report says that although the fixed transaction costs (government fees, professional fees and taxes) appear to be significant, it would lead many to conclude that this is not affordable, given the perceived scale of economic activity on many resettlement farms. However, the cost should be seen in the context of the value of the asset and the advantages that may accrue from the registration of the leasehold agreement.



ELLANIE SMIT