This is the legal process by which the State acquires private property for a public purpose or pursuant to public interest. The major guiding principle with regard to compulsory acquisition is that the process of compulsory acquisition may not be undertaken unless it is authorized by law and is in public interest.
The legal underpinning of compulsory acquisition includes Article 40 of the Constitution, Kenya as well as Part VIII of the Land Act of Kenya. The process as it were before the current regime was discussed in the case of Patrick Musimba v National Land Commission & 4 others and is summarized as follows:
- The National Land Commission (NLC) is prompted by the National or County Government through the Cabinet Secretary or County Executive member;
- The NLC publishes a Gazette Notice on the intention to acquire the land;
- The NLC ensures that the land is authenticated by the Survey Department for owner identification;
- The NLC arranges a hearing to determine the persons interested and be compensated;
- The NLC offers prompt compensation; and
- The possession of the property is taken by the NLC and is deemed to be vested with National or County Government.
However, the advent of the Land Value (Amendment) Act, 2019 brought with it several changes to the process of compulsory acquisition. It was assented to on 5th August 2019 and came into force on 19th August 2019 and its key highlights are as follows:
The Land Value Index
The new law provides for the establishment of the Land Value Index. A Land Value Index is an analytical representation showing the spatial distribution of land values in a given geographical area at specific time.
The Land Value Index is supposed to be developed within six months of commencement of Act. It is noteworthy that now, six months later, the Index has not yet been developed.
The Land Value Index, together with the Act, will be the basis upon which valuation of freehold and community land shall be made.
The criteria for assessing the value for compulsorily-acquired leasehold land will now take into consideration the following factors:
- The value of the land based on the unexpired term of the lease calculated on the basis of a Land Value Index;
- Value of developments or improvements on the land; and
- Any other cost incurred on the basis of the terms and conditions of the grant.
The new law also provides for compensation of occupants in good faith of land compulsorily acquired who may not hold title to the land.
The Act however excludes people unlawfully occupying land without consent of the owner from the right to compensation. In this instance, the assessment of the value of the land is based on the following factors:
- The number of persons in actual occupation for uninterrupted period of six months before the publication of the notice to acquire the land;
- Improvements done before the date of publication in the Gazette of the notice of intention to acquire the land;
- Damage sustained or likely to be sustained by the occupants of the land at the time of the Commission’s taking possession of the land; and
- If, in consequence of the acquisition, any of the occupants in good faith of the land is or will be compelled to change residence or business.
Initially, monetary compensation was the chief form of compensation. However, with the coming into force of the new law, there are now further ways by which compensation can take place. They include:
Allocation of an alternative parcel of land.
This land which must be of equivalent value and comparable geographical location and land use to the land compulsorily acquired.
- Issuance of government bond, grant or transfer of development rights as may be prescribed; and
- Equity shares in a government-owned entity.
Requirement for prompt payment of compensation
The new law provides for prompt payment of compensation and defines this as payment made within a reasonable time, to a maximum of time period of one (1) year.
This provision may raise a lot of concerns in the days to come because the initial proprietors of the land in many circumstances may not already have alternative land to continue with their lives pending compensation. Secondly, the process of acquisition of the land takes a substantial amount of time.
The Land Acquisition Tribunal
There is now a Land Acquisition Tribunal. The Tribunal is vested with jurisdiction to hear and determine appeals from the decision of the NLC in matters relating to the process of compulsory acquisition of land. This will provide a specific mechanism for the resolution of matters arising from the process of compulsory acquisition.
The Land Value (Amendment) Act, 2019 brings into play ground breaking changes in the process of compulsory acquisition as set out in the existing law.
Practitioners therefore need to acquaint themselves with the provisions of the new law.