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  • THE MODER LAW OF MORTGAGES I TAZAIA

    THE ROLE OF THE LAD ACT, 1999

    by

    GEORGE NATHAN MWAISONDOLA

    A thesis submitted to the School of Law of the University of Birmingham

    for

    the degree of Doctor of Philosophy

    School of Law

    The University of Birmingham

    December 2007

  • University of Birmingham Research Archive

    e-theses repository This unpublished thesis/dissertation is copyright of the author and/or third parties. The intellectual property rights of the author or third parties in respect of this work are as defined by The Copyright Designs and Patents Act 1988 or as modified by any successor legislation. Any use made of information contained in this thesis/dissertation must be in accordance with that legislation and must be properly acknowledged. Further distribution or reproduction in any format is prohibited without the permission of the copyright holder.

  • ABSTRACT

    The thesis examines the law of mortgages in Tanzania following the enactment of new

    land laws, in particular the Land Act 1999. In the study, we examine the statutory regime

    introduced by the Land Act focusing on, among others, what the Act sought to address,

    its weakness and achievement.

    The study can basically be divided into two main parts. We discuss form of mortgages in

    part one and enforcement of mortgages in part two. But we have nine chapters in the text.

    Chapter one states the objectives of this work and highlights the research methodology.

    We stressed in chapter one that this work is basically a theoretical analysis of the law. In

    chapter two, we discuss the sources of land law and the choice of law in regulating

    property transactions.

    In chapter three, the concept of security in land is examined. Also a general overview of

    land tenure and estate is considered in this chapter. In addition, an explanation of the

    transferable interests in land both under customary law and granted right of occupancy is

    considered. Chapter four provides an analysis of the form of mortgages which were

    capable of being created before the enactment of the Land Act, 1999 and in chapter five,

    we discuss form of mortgages capable of being created under the Land Act, 1999. In this

    chapter, we have also highlighted matters related with the mortgage.

    Chapter six provides an investigation of the rights of the parties under a mortgage. In

    chapters seven and eight we discuss the enforcement of mortgages. We conclude in

    chapter nine.

  • Focus, hard work and perseverance

  • ACKOWLEDGEMET

    I would like to thank my supervisor Professor Gordon Woodman for his dedication,

    guidance and tireless effort to advice me throughout this project. He was always there

    during many difficult times. It was a privilege to work with him.

    Also, I would like to thank the staffs of the School of Law for their assistance and the

    School of Law for financial support. Also, I would like to thank the librarians at the

    Harding Law Library for their assistance.

    Furthermore, I would like to thank my friends and informants (not in the order of

    importance) Ayoub Omary, Gaspar Nyika, Emmanuel Msengezi, Baltazar Mbilinyi and

    Fredrick Mkatambo for their advice and assistance in conducting research. Also, I would

    like to thank Felix Kibodya, Nziku Silas, Juma Abdul, Martha Maeda, Prosper Nambaya,

    Atuganile Ngwala, Ebenezer Mshana and Dr R.W. Tenga for the useful discussion we

    had during field research.

    Lastly, I would like to thank my relatives for their encouragements, and my parents

    Nathan and Enea Mwaisondola for their assistance, encouragement and prayers.

  • i

    COTETS

    Table of contents ..i

    List of cases ....viii

    List of statutes .....xx

    List of statutory instruments .........xxiv

    Abbreviations ..xxvii

    CHAPTER OE: ITRODUCTIO

    1.1 Research question to be addressed ....1

    1.2 Background to the problem ...5

    1.2.1 The changes in political-economic policies and their impact on the

    banking business 6

    1.2.2 Liberalisation and the deregulation of the banking sector: The change

    in borrowing and lending transactions ........10

    1.3 Methodology ...14

    CHAPTER TWO: SOURCES AD CHOICE OF LAW

    2.1 Sources of Tanzania land law.....18

    2.1.1 The Constitution ..19

    2.1.2 Written laws ....22

    2.1.3 Customary law and Islamic law ..24

  • ii

    2.1.4 English law ..30

    2.1.5 Indian law ....33

    2.2 The role of English common law ......34

    2.3 The choice of law to regulate transactions in land ........41

    2.4 Creation of the common land law of Tanzania .44

    CHAPTER THREE: THE COCEPT OF SECURITY I LAD

    3.1 Introduction ...50

    3.2 A general overview of land tenure ....54

    3.3 Rights in land at common law ...64

    3.3.1 Meaning of land at common law .64

    3.3.2 The common law doctrine of tenure and estate and its application

    in the Country ..69

    3.4 Rights in land under customary law ......74

    3.4.1 Forms of ownership of land in customary law 74

    3.4.2 Transferable interests in land under customary law 80

    3.5 Secured interests in land under the granted rights of occupancy ..83

    CHAPTER FOUR: FORMS OF MORTGAGE BEFORE THE EACTMET

    OF THE LAD ACT, 1999

    4.1 General remarks on mortgage ...88

    4.2 Mortgage at common law ......91

    4.2.1 Legal mortgage ....92

  • iii

    4.2.1.1 Mortgage of freehold ...92

    4.2.1.2 Mortgage of leasehold .....96

    4.2.2 Equitable mortgage ........100

    4.2.2.1 Contract to create a legal mortgage .......100

    4.2.2.2 Mortgage by deposit of title deed ......101

    4.2.2.3 Mortgage of an equitable interest ..103

    4.3 The influence of equity on mortgages .....103

    4.3.1 Equity of redemption .....105

    4.4 The Forms of mortgages in Tanzania before the enactment of the Land

    Act, 1999..........................................................................................................108

    4.4.1 Mortgage of right of occupancy and lease ....109

    4.4.2 Equitable mortgage ....112

    4.4.2.1 Agreement to create a legal mortgage .......112

    4.4.2.2 Mortgage by deposit of certificate of title .....113

    4.4.2.3 Defect of form ...116

    4.5 A comparison between mortgage and charges over land ......116

    CHAPTER FIVE: MORTGAGES UDER THE LAD ACT, 1999

    5.1 Introduction .....120

    5.2 Land administration and land law reforms ..120

    5.2.1 The impact of the Land Act, 1999 on the law of property. ...127

    5.3 Forms of mortgage under the Land Act, 1999 ......131

    5.3.1 Ordinary (formal) mortgage ..132

    5.3.2 Informal mortgage .134

  • iv

    5.3.3 Lien by deposit of documents ...135

    5.3.4 Customary mortgage .....136

    5.3.5 Third party mortgages ...138

    5.4 Mortgage of matrimonial home ...140

    5.4.1 Mortgage by severance of interest in the matrimonial home ....145

    5.4.2 Mortgage of matrimonial home entered by undue influence

    or misrepresentation ..150

    5.5 The impact of the Court of Appeals decision in Abualy Alibhai Azizi v

    Bhatia Brothers Ltd on mortgages ....155

    5.6 Salient features of mortgages ....159

    5.6.1 The requirements of writing in mortgage ......160

    5.6.2 The requirement of consent to mortgage ...164

    5.6.3 Registration of mortgage ...171

    5.6.3.1 Effect of failure to register a mortgage ......173

    5.7 Extinction of the subject matter of the mortgage ......175

    5.8 Mortgage of land as a security ..179

    CHAPTER SIX: RIGHTS OF PARTIES UDER A MORTGAGE

    6.1 Introduction ...183

    6.2 Rights of the mortgagor .183

    6.2.1 Creation of second and subsequent mortgages ..184

    6.2.2 Right of redemption ...187

    6.2.2.1 The termination of the equity of redemption .195

    6.3 Rights of the mortgagee ....195

  • v

    6.3.1 Right to consolidate ...196

    6.3.2 Right to tack ..200

    6.4 Variation of mortgages ......202

    6.5 Transfer of interests under mortgage .203

    6.5.1 Transfer of equity of redemption inter vivos .205

    6.5.2 Transfer of the mortgage by the mortgagee ..207

    6.5.2.1 A particular instance of transfer by the mortgagee ...209

    6.5.2.2 Sub-mortgage ....211

    6.5.3 Transfer by operation of the law ...212

    6.5.3.1 Devolution by bankruptcy .213

    6.5.4 Registration of a transferred mortgage ..214

    6.6 Priority of mortgages .215

    6.6.1 Priority of the ordinary (formal) mortgages ......216

    6.6.2 Priority of informal and other forms of mortgages ...217

    6.7 Discharge of mortgage ..220

    CHAPTER SEVE: EFORCIG MORTGAGES BY THE MORTGAGEE

    7.1 Introduction ...222

    7.2 The general impact of the Land (Amendment) Act, 2004 on enforcement of

    mortgages ..226

    7.3 Effect of enforcing mortgage .228

    7.4 Some facts on lending and borrowing and the role of the court in mortgage

    enforcement ...229

    7.5 Appointment of a receiver .237

  • vi

    7.5.1 Powers and duties of a receiver .239

    7.6 Lease of mortgaged land ...242

    7.6.1 Classes of properties for which power to grant a lease is subject to prior

    conditions ..245

    7.7 Action for possession 247

    7.7.1 Mortgagee withdrawal