The Doctrine Of Legitimate Expectation In Leasehold Title Renewal In Kenya: Insights From Civil Appeal No. 463 Of 2019

Introduction

The doctrine of legitimate expectation, rooted in administrative law, requires that public authorities act in a lawful, reasonable, and procedurally fair manner when making administrative decisions. In Kenya, this principle is constitutionally anchored in Article 47 of the Constitution and further elaborated in the Fair Administrative Action Act, 2015.

A landmark application of this doctrine arose in Supreme Court Petition No. E033 of 2023, an appeal stemming from Civil Appeal No. 463 of 2019. The matter involved land originally allocated to the appellants in 1968 under a leasehold arrangement, which expired in October 2001. Prior to expiry, the appellants exercised their pre-emptive right and applied for renewal. However, despite their timely application, the government failed to process the extension and, in 2010, reallocated the land to a third party.

The Supreme Court ruled in favour of the appellants, finding the reallocation unlawful and irregular. The ruling emphasized the critical role of legitimate expectation in the lease renewal process. The ruling reinforced the right to fair hearing in administrative actions and emphasized the sacrosanct right to title ownership set out in the following previous decisions:-

(i) Funzi Island Development Ltd & 2 Others v County Government of Kwale & 2 Others [2021] eKLR;

(ii) Republic v Land Registrar Kilifi & Another Ex parte Daniel Ricci [2013] eKLR; and

(iii) Isaac Gathungu Wanjohi v AG & 6 Others [2012] eKLR

This article analyses the Court’s reasoning and explores the wider implications for leasehold title renewal and extension in Kenya.

2. Legitimate Expectation in Leasehold Title Renewal

The Supreme Court affirmed that public authorities must observe the doctrine of legitimate expectation when dealing with lease renewal applications. The decision sets a precedent that extends beyond individual rights, underlining that land administration is a matter of public interest. The Court articulated the following principles: -

(i) Timely Consideration – An applicant in possession of land has the right to have their renewal application considered promptly and within a reasonable time.

(ii) Procedural Fairness – The renewal process must be transparent, objective, and procedurally fair.

(iii) Right to Reasons – If a renewal application is declined, the applicant must receive written reasons for the decision.

(iv) Right to Review or Appeal – Applicants must be afforded the opportunity to seek administrative review or judicial redress in cases of unfair treatment.

These principles collectively uphold the applicant’s legitimate expectation that renewal will be conducted fairly and within the bounds of law.

3. Legal Framework Governing Leasehold Renewal

(a) Statutory Foundation

Leasehold titles in Kenya are primarily governed by the Land Act, 2012, and associated regulations. In urban areas such as Nairobi, leases are commonly granted for 50 or 99 years. Renewal is not automatic and must be initiated by the lessee.

Authority over public land leases lies with the National Land Commission (NLC), while county governments are responsible for lease administration where land functions have been devolved.

(b) Standard Renewal Process

In line with the Land (Extension and Renewal of Leases) Regulations, 2017, the following steps guide the renewal of leasehold titles:-

(i) Initiation of Renewal – The NLC is required to notify lessees at least five years prior to lease expiry. However, lessees are strongly advised to proactively initiate the renewal process well in advance.

(ii) Status Audit – Applicants must ensure there are no breaches of lease covenants and that land rent and rates are fully paid.

(iii) Assessment of Public Interest – Renewal may be denied if the land is required for a public purpose.

(iv) Stakeholder Engagement – The lessee must be informed of the renewal status and, where applicable, accorded priority in the allocation.

(v) Valuation and Premium Payment – Once renewal is approved, a new lease is issued upon payment of the applicable fees.

Please check our article here for a detailed guidance on renewal/extension of leasehold titles https://cmadvocates.com/en/blog/the-key-aspects-of-extension-and-renewal-of-leasehold-titles-in-kenya)

(c) Key Risk Areas in Lease Renewal

Some common pitfalls faced by leaseholders that may jeopardize renewal and expose the land to re-allocation include: -

(i) Failure to initiate renewal in good time

(ii) Encroachment or illegal use of the land during the lease term

(iii) Non-compliance with zoning, planning, or development regulations

4. Practical Guidance for Leaseholders

As a leading legal advisory firm in real estate, CM Advocates LLP recommends the following best practices to clients managing leasehold titles:-

(i) Regularly review Lease Terms – Monitor expiration dates and begin renewal preparations at least five (5) years before expiry.

(ii) Maintain full statutory compliance – Ensure payment of land rent, rates, and adherence to all lease covenants including seeking of consent where required.

(iii) Retain Accurate Records – Keep all lease documents, allocation letters, and approvals well-organized and up to date.

(iv) Engage Legal Support– Legal counsel is vital when dealing with national or county authorities, especially where disputes or delays arise.

These steps help preserve legal entitlement and strengthen any claim of legitimate expectation.

5. Conclusion

The Supreme Court’s decision serves as a critical reminder of the legal safeguards that protects land owners from arbitrary administrative actions and foster the right to own and hold property of any tenure, anywhere in Kenya. While regulatory bodies maintain authority over land matters, they must respect the principles of fairness and predictability, including the doctrine of legitimate expectation.

For leasehold landowners particularly in high-demand urban areas early engagement, legal compliance, and procedural due diligence are essential to securing long-term rights over their property.

CM Advocates LLP stands ready to assist clients with lease renewals, term extensions, title audits and resolution of land-related disputes.

Contributors

Jane MUGO-Partner & Unit Head- jmugo@cmadvocates.com

Wahu WAMBUGU-Associate Advocate -mwambugu@cmadvoocates.com

Contact Us

For personalized advice or support on leasehold renewals, reach out to our Real Estate, Banking, and Finance Law Practice Group via email: rbf@cmadvocates.com or book a consultation through 0716209673.

Disclaimer-This article is for general informational purposes only and does not constitute legal advice. For tailored legal counsel, please consult our legal team directly.