Land is a central factor of production and one of Uganda's primary investment assets. Collison Lore looks at the issues involved in owning and holding land in Uganda.

Land in Uganda belongs to the citizens of the country and it has undergone an evolution, leading to four main systems of land tenure – Freehold, Leasehold, Mailo and Customary systems.

These systems have evolved since the establishment of modern Uganda as a British colony. It is important to grasp the nature of land tenure systems in Uganda if an investor seeks to utilize land as a primary investment asset. It is important to state from the outset that land has always been an important factor for Ugandan communities. This importance has been since time immemorial and a clear understanding of existing legislation is therefore imperative.

In 1998, the Government of Uganda passed a new land law, the Land Act 1998. It proposed a plethora of reforms to fundamentally alter the link between the State and the land in Uganda. The focus has thus been outlined in a number of government plans and projects, the key emphasis being the attraction of private sector investment in land to increase its productive capacity.

The constitution of Uganda states that there shall be a district land board in each district to hold and allocate land in the district which is not owned by any person or authority; to facilitate the registration and transfer of interest in land and to deal with all matters connected with land in the district in accordance with the laws made by parliament within the confines of the 1995 constitution. The constitution protects private property.

Land utilization relates closely to the land tenure system. In Uganda, common law definition of land also includes that which attaches to it: the fixtures. A 'fixture' is defined as something which has been attached to the land with the intention of making a permanent improvement to it. It is generally accepted that 'trade fixtures', 'ornamental fixtures' and 'fixtures for household purposes' are treated as 'tenant fixtures' and may be removed. However, fixtures attached for agricultural purposes, such as: fences or sheds become the property of the owner of the land. A tenant must remove any fixtures to which he or she is entitled from the land before the expiry of the lease and must compensate the owner of the land for any damage caused during this process.

The right of ownership of land is also usually implicit in including what is immediately above and below the surface. It has been established that this only extends to a height or depth which an owner might conceivably use. Uganda's Mining Act (cap 248) specifically excludes the right to ownership of any minerals that might be found beneath the land. It states that the entire property and control of all minerals and mineral oils in, under or upon any lands or waters in Uganda are and shall be vested in the Government of Uganda.

Under Ugandan law, where a new parcel of land is registered, the Registrar of Land is required to prepare a certificate in duplicate. One copy of the certificate is kept in the Book while the other, referred to as the 'duplicate certificate', is given to the person who is registered as the 'proprietor' of the land. Specifically, this Act provides that a registered proprietor of any estate wishing to transact, or transfer this must complete a prescribed form, which should be signed and witnessed and presented to the Registrar together with the duplicate certificate of title and any other necessary documents.

It is important to note that instruments not submitted with the appropriate forms may be rejected upon the judgment of the Registrar. Any ensuing transactions affecting registered land, such as a mortgage or lease, must be certified in the Register Book, the certificate of title and the duplicate certificate. This means that a future buyer will have the ability to counter check if, for instance, a mortgage as a security against the land as this could noticeably affect its value.

Once the Registrar has entered the instrument in the Register Book, the person named in the certificate is deemed to be the duly registered proprietor. A certificate shall be conclusive evidence of title, and all its particulars, and the courts are obliged to treat it as such. This provision prevails over all other unregistered interests or claims and registered title-holders are protected against unregistered interests. This principle of 'indefeasibility' is intended to help create one central land registry and, thus, simplify and expedite future land transactions.

A lease is an agreement whereby one party grants to another exclusive possession of land for a period usually, but not exclusively, in return for a monetary consideration called rent. The common law definition of a lease has two essential features: 'certain duration' and 'exclusive possession', but the Ugandan Land Act 1998 eliminates with the second condition. A lease in the context of Uganda is defined as a form of tenure in which the landlord grants, or is deemed to grant the tenant exclusive possession.

A lease may also be created where there is no form of payment and it states that the duration of a lease is usually but not necessarily defined by reference to a date of commencement and ending. The distinguishing feature of a lease is, therefore, that it grants the holder the right of exclusive possession to a piece of land. Ugandan law is not specific as to whether a lease must be in writing and so an oral contract is also enforceable.

Under Ugandan law, a mortgage is a transaction whereby land is given as security for the repayment of a loan. The rules applying to mortgages are defined in both common and statutory law. The two most important laws regulating mortgages in Uganda are the Mortgage Decree 1974 and the Registration of Titles Act 1924. A mortgage created under Ugandan law differs from common law rules in that it does not transfer the title of the land to the creditor, but makes him, or her, the proprietor of the mortgage, which theoretically provides the debtor with greater security.

The debtor remains the owner of the land, subject to his or her ability to pay off the loan. As well as being obliged to pay off the loan the debtor is obliged to maintain and repair the property and grant the creditor the right to inspect the property at any reasonable time. Where the debtor breaches these terms the creditor is entitled to take possession of the property, appoint a receiver, sell the property or foreclose the loan. He or she can also seize other assets of the debtor if this is necessary to recover the loan's original value.