Background
All land in Tanzania is public land vested in the President as a trustee on behalf of the people. Tanzanian citizens occupy public land through a right of occupancy. There are two categories of right of occupancy namely granted right of occupancy (GRO) and customary right of occupancy (CRO). A GRO is issued for general land that is surveyed as per the requirements of the urban planning authorities. A CRO is issued for village land by the village councils.
A GRO is subject to a term of occupation that does not exceed 99 years. On the other hand, the duration of a CRO may be for either an indefinite period, a definite period which does not exceed 99 years or for year to year or less as it may be determined by the village council.
Non-citizens and companies that are majority-owned by non-citizens (collectively referred to as Foreigners) cannot hold land under a GRO or a CRO as these are reserved for Tanzanian citizens. However, Foreigners can occupy general land either through a long term lease or a derivative right granted by the Tanzania Investment Centre. Foreigners cannot occupy village land either through a derivative right or a long term lease unless the village land is first converted into general land.
Land is commonly accepted by lenders as a form of collateral. This is in part due to the legal protections available to lenders when securing third party interests in land. We discuss below the various forms of securing third party interests in land.
Mortgage
A mortgage is the creation of an interest in a right of occupancy for securing the payment of money or the fulfilment of a condition. A mortgage deed must be registered with the Registrar of Titles to be effective. A mortgage created between a lender and a corporate body cannot be registered with the Registrar of Titles unless it has first been registered with the relevant registrar of that corporate body. For example, mortgages created by a company must first be registered with the Registrar of Companies (i.e. the Business Registrations and Licensing Agency) before they are registered with the Registrar of Titles.
Where the same property is mortgaged to several lenders, the mortgages must rank in priority according to the order in which they were registered unless the lenders enter into a security sharing agreement that would set out the ranking of the mortgages.
A mortgage is the creation of an interest in a right of occupancy for securing the payment of money or the fulfilment of a condition. A mortgage deed must be registered with the Registrar of Titles to be effective. A mortgage created between a lender and a corporate body cannot be registered with the Registrar of Titles unless it has first been registered with the relevant registrar of that corporate body. For example, mortgages created by a company must first be registered with the Registrar of Companies (i.e. the Business Registrations and Licensing Agency) before they are registered with the Registrar of Titles.
Where the same property is mortgaged to several lenders, the mortgages must rank in priority according to the order in which they were registered unless the lenders enter into a security sharing agreement that would set out the ranking of the mortgages.
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