The doctrine of innocent purchaser for value has long been a cornerstone of property law, protecting individuals who purchase property in good faith. However, recent landmark judgments by the Supreme Court of Kenya have significantly clarified and, in some respects, limited the scope of this doctrine, particularly concerning titles to public land that were illegally or irregularly allocated. This article examines the meaning, key ingredients, and limitations of this doctrine in light of recent Supreme Court decisions.
Historical Context and Fundamental Principles
The doctrine of innocent purchaser for value without notice is rooted in the principles of equity and the protection of bona fide transactions. It has been described as “a fundamental principle of the law of property in land that a purchase of a legal estate for value without notice is an absolute, unqualified and unanswerable defence against the claims of any prior equitable owner or encumbrancer“. This doctrine emerged to protect innocent third parties who acquire property without knowledge of existing equitable interests.
In Kenya, the doctrine has evolved through legislative changes and judicial interpretations. Before the 2010 Constitution, Section 23 of the Registration of Titles Act (now repealed) provided that a certificate of title was “conclusive evidence” of ownership. However, the current Land Registration Act No. 3 of 2012, CAP 300, downgraded this status to “prima facie evidence,” significantly altering the concept of indefeasibility of title. Indeed, Section 26 (1) of the Act provides the following:
“The certificate of title issued by the Registrar upon registration, or to a purchaser of land upon a transfer or transmission by the proprietor shall be taken by all courts as prima facie evidence that the person named as proprietor of the land is the absolute and indefeasible owner, subject to the encumbrances, easements, restrictions and conditions contained or endorsed in the certificate, and the title of that proprietor shall not be subject to challenge, except—
- on the ground of fraud or misrepresentation to which the person is proved to be a party; or
- where the certificate of title has been acquired illegally, unprocedurally, or through a corrupt scheme.”
As the Supreme Court has emphasized, “It is therefore no longer possible for a title holder to erect the certificate of title as a barrier to an inquiry into its legality or otherwise”. This shift represents a fundamental change in how property rights are protected and challenged in Kenya.
Key Ingredients of the Innocent Purchaser for the Value Doctrine
- Innocence/Good Faith
The element of innocence is central to the doctrine. The purchaser must act in good faith, meaning their conduct must not raise any doubts about whether they had notice or knowledge of rival interests in the land. As clarified in the Supreme Court judgment in Sehmi & another v Tarabana Company Limited & 5 others (Petition E033 of 2023) [2025] KESC 21 (KLR) (11 April 2025) (Judgment) , innocence “connotes the exercise of diligence expected of any reasonable purchaser. The claimant must demonstrate that he acted diligently and conducted a reasonable inquiry into the status of the estate or land that he sought to purchase”.
In the Torino Enterprises Limited v. Attorney General case, the Supreme Court further elaborated that an innocent purchaser denotes someone who exercised due diligence, including physical inspection of the property. The Court noted: “An innocent purchaser for value would also denote one who was aware of what they were purchasing by inspecting the suit premises”. If there are visible signs of occupation or competing interests, these should serve as warnings to potential purchasers.
- Purchase for Value
The second ingredient requires that consideration in money or money’s worth must have been paid for the property. The Supreme Court clarified that “The purchaser must pay all the money before receiving notice of the existence of the equitable interest over the suit land”. Merely executing a conveyance instrument without payment does not satisfy this requirement.
Importantly, the Court emphasized that “A person who takes land without giving value in exchange must take it with all its burdens, equitable as well as legal. Even a person who has given value will be bound if before he obtained the land, he knew of the existence of equitable interest”.
- Legal Estate
For the doctrine to apply, the purchase must be in reference to a legal estate vis-a-vis an equitable interest in the land. In other words, “the contending interests must be a legal estate and an equitable interest in the land”. The doctrine protects purchasers of legal estates against prior equitable interests of which they had no notice.
The Supreme Court in paragraph 62 of its judgment explained this principle: “Fully stated therefore, the doctrine means that an innocent purchaser of a legal estate in land without notice of an equitable interest in the said land, takes free from the encumbrance of the latter interest”. This reflects the maxim that “equity follows the law,” where legal rights are good against all the world, while equitable rights yield to bona fide purchasers of legal estates for value without notice.
Application to Leasehold Estates on Public Land
The Supreme Court in Sehmi & another v Tarabana Company Limited & 5 others , judgment has provided specific guidance on how the innocent purchaser doctrine applies to leasehold estates over public land. The Court clarified that an original allottee of a leasehold estate over public land cannot strictly be regarded as a purchaser of the land but remains an “allottee” or “lessee”.
The doctrine of innocent purchaser can apply to a leasehold estate over public land only “in a situation where the original allottee has created an equitable interest over part or whole of the estate in favour of a third party”. In such cases, a purchaser who buys the land without knowledge of this equitable interest would be protected by the doctrine.
Protection for Purchasers of Illegally/Irregularly Allocated Titles on Public Land
The Supreme Court has unequivocally answered the question of whether the doctrine protects purchasers of illegally or irregularly allocated titles on public land: it does not. In the landmark case of Dina Management Limited v. County Government of Mombasa & 5 Others, the Court held that:
“To establish whether the appellant is a bona fide purchaser for value, therefore, we must first go to the root of the title, right from the first allotment, as this is the bone of contention in this matter”.
This means courts must examine the entire chain of title, starting from the first allocation, to determine if a purchaser is truly innocent. If the first allocation was illegal or irregular, subsequent transfers cannot cure this defect.
The Supreme Court further elaborated in the Dina Management Limited case, elaborated:
“The first allocation having been irregularly obtained, HE Daniel Arap Moi had no valid legal interest which he could pass to Bawazir & Co (1993) Ltd, who in turn could pass to the appellant”. This reinforces the legal principle that no one can transfer a better title than they possess (nemo dat quod non habet).
The Shift from Indefeasibility to Prima Facie Evidence
A critical development in Kenyan property law has been the transition from treating a certificate of title as “conclusive evidence” of ownership (under the repealed Registration of Titles Act) to treating it as “prima facie evidence” (under the current Land Registration Act). Section 26 of the Land Registration Act No. 3 of 2012 now explicitly states that a title can be challenged on grounds of fraud, misrepresentation, or where “the certificate of title has been acquired illegally, unprocedurally or through a corrupt scheme”.
This legislative change aligns with Article 40 (6) of the Constitution, which states that the right to property does not extend to “property that has been found to have been unlawfully acquired”.
The Doctrine’s Application to Public Land
Public land in Kenya has historically been vulnerable to illegal or irregular allocation by both private entities and public officials, as documented in key reports like the Report of the Commisssion of Inquiry into the Illegal/Irregular Allocation of Public Land (Ndungu Report) and Judicial Commission of Inquiry into Tribal Clashes in Kenya Report (Akiwumi Report). The Supreme Court’s clarification of the innocent purchaser doctrine represents a significant step toward protecting public land from unlawful appropriation.
In the Dina Management Limited case, the Court emphasized that “if the process that was followed before issuance of the title did not comply with the law, then such a title cannot be held as indefeasible”. This means that, regardless of how many subsequent transfers occur, if the original allocation was illegal, the current holder cannot claim protection as an innocent purchaser.
The Court’s reasoning is clear: “Since the holder of an illegally allocated title cannot confer a valid title upon a third party, there would be no ‘legal estate’ to be purchased in the first place”. Additionally, the “absence of ‘notice’ is about the existence of ‘an equitable interest’ in the land and not ‘the incidence of illegality or irregularity of the title’ in question”.
Recent Supreme Court Cases Shaping the Doctrine
Dina Management Limited v. County Government of Mombasa
This case represents a watershed moment in the interpretation of the innocent purchaser doctrine in Kenya. The Supreme Court held that where the initial allocation of land is irregular or illegal, subsequent transfers cannot be protected by the doctrine. The Court emphasized that a title is “an end product of a process” and if that process does not comply with the law, the resulting title cannot be indefeasible.
Torino Enterprises Limited v. Attorney General
In this case, the Supreme Court continued its “onslaught against the concept of innocent purchasers without notice”. The Court ruled that a party claiming to be an innocent purchaser must prove they exercised due diligence, including physically inspecting the property. The Court found that the presence of military installations on the suit premises should have served as a warning of “buyer beware” to the appellant.
Implications for Property Buyers
The Supreme Court’s clarification of the innocent purchaser doctrine has significant implications for property transactions in Kenya:
- Enhanced due diligence: Buyers must now exercise an increased level of caution by thoroughly investigating the history of a title from its initial allocation to the current owner.
- Physical inspection: Purchasers must physically inspect properties before purchase to identify any signs of occupation or competing interests.
- Beyond official searches: It is no longer sufficient to perform a standard search at the Ministry of Land; buyers must look beyond an official search and acquire a certified green card.
- Title validity: For a title to be considered indefeasible, a buyer must prove that the entire allocation process and subsequent transfers were regular and lawful.
Conclusion
The doctrine of innocent purchaser for value remains an important principle in Kenyan property law, but recent Supreme Court decisions have significantly clarified its scope and limitations. Most notably, the doctrine does not protect purchasers of illegally or irregularly allocated titles on public land, regardless of their lack of knowledge about illegality.
The Supreme Court’s approach reflects a critical balance between protecting bona fide purchasers and safeguarding public interest, particularly in cases involving public land. As stated by the Court, “a purchaser will only be regarded as bona fide if he buys property in good faith without notice of any defect or claims against the title. So that if the title in question is illegal or obtained through unlawful means, the purchaser cannot claim protection even if he was not aware of the illegality”.
This clarification emphasizes the primacy of legality in land transactions and underscores the need for comprehensive due diligence by prospective purchasers. In Kenya’s competitive real estate landscape, buyers must now look beyond the face of a title document and scrutinize the entire history of the land to ensure they are truly innocent purchasers for value.
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Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified advocate for personalized legal guidance.
