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99-year lease gravely deficient
Chris Mhike
December 08, 2006

http://www.theindependent.co.zw/viewinfo.cfm?linkid=21&id=9316

THE much-flaunted 99-year Lease Agreement is a high-sounding nothing. In numerous respects, it gives with one hand and takes away with the other. In that disempowerment lies the document’s grave deficiency.

The agreement purports to empower "new farmers" who have settled on land under the A2 scheme, when in fact it wipes away the traditional and sound concept of land ownership.

The document rightly acknowledges in its preamble section, that: "It is desirable that the farmers be given security of tenure … for land allocated to them…"

Under the subject of the Law of Property, "security of tenure" refers to the assurance given to the owner or occupier of a given piece of property, that his/her real rights over that property shall not be adversely affected, through human action, for a certain and considerable period of time.

The 99-year lease agreement however only goes as far as expressing the desirability of endowing "new farmers" with the prize of security of tenure. The substantive provisions of the lease agreement leave farmers vulnerable to arbitrary dispossession.

While on the face of it, the lease agreement guarantees the lessee (that is, the beneficiary farmer) and dependants or family, century-long tenancy, in actual terms, the guaranteed duration of tenancy is only three months.

The agreement carries a clause which stipulates that "… the lessor (that is government), reserves the right to cancel this lease and repossess the leasehold, on ninety (90) days notice or any longer notice period as the lessor may deem fit".

That possibility of termination upon three months notice dilutes the whole concept of security of tenure for the farmer under the agreement. The dilution entrenches the description of the document as a defective one.

Termination on "90 days or longer" notice is a qualified course, to apply to in situations of the insolvency of the farmer, multiple farm ownership, "any breach of the terms and conditions" of the lease, sub-standard use of the land, or failure by the farmer to pay rentals.

Certain qualified situations do make sense, for example, the sub-standard use of land would warrant corrective action. The prevailing wastage of rich soil around the country is testimony to the senselessness of allocating farmland to incapable persons.

Yet the document lacks the mechanism to determine levels of acceptable or unacceptable productivity. The measurement of productivity remains opinion-based, as opposed to scientific or systematic inquiry. Government holds absolute power and discretion in the assessment process.

If government is serious, it would have in the first place developed an effective and systematic process of separating sincere farmers from chancers. Under-utilisation of land would therefore not have been a serious an issue as it arises in the lease agreement.

The history of civic and political governance has illustrated over the years that opinion-based decision-making models are open to abuse. That aspect therefore also makes the agreement deficient.

Space constraints make it impossible to interrogate the other unjustified situations under which termination may be effected on short notice.

The 99-year Lease Agreement goes deeper than threatening farmers with eviction on short notice. It provides that government "may at any time and in such manner and under such conditions as it may deem fit, repossess the leasehold (that is the relevant farmland) or any portion thereof if the repossession is reasonably necessary in the interests of defence, public safety, public order, public morality, public health, town and country planning or the utilisation of that or any other property for a purpose beneficial to the public generally or to any section of the public".

That is definitely a very long provision. More significantly, it is very wide and vague. The use of terms such as "at any time" and "conditions as it may deem fit" are extremely wide. Many of the concepts listed, including "public safety", "public morality", and "purpose beneficial to the public generally", are certainly vague.

Yet local and international jurisprudence has long established the principle that wide and vague provisions have no place in a democratic society.

If Zimbabwe is indeed democratic as claimed by the reigning rulers, then all the wide and vague provisions contained in the agreement ought to be done away with.

In giving one hand and taking away with the other, Clause 24 of the Lease Agreement provides that the lessee may register the lease with the Deeds Registry, and that he may use the document as collateral in securing agricultural financial assistance from creditors.

However, the challenge lies in the reality that financial institutions will hesitate or even refuse to accept the lease as an instrument to be trusted for security purposes.

Some of the respectable bankers and economists have already expressed their reasoned reservations about the document. A few government-backed finance and banking organisations could swallow the lease-based assurance. Such institutions have been financing new farmers anyway and incurring heavy losses in the process, without any reference to any lease agreement.

It will be interesting to see new financiers coming onto the scene, on the strength of the lease’s assurances.

Financiers shall be dealing with a weak lessee who pays rent to an omnipotent lessor. The government shall, under the lease, in its sole discretion, determine rental levels, on an annual basis. Should the farmer be unable to pay the stipulated rent, eviction shall become imminent.

Any structural alterations to existing infrastructure, and agricultural or pastoral improvements, ought to be done in consultation, and with the approval of government.

The farmer’s weakness extents even to livestock. Under Clause 9 of the agreement, where the farmer intends to sell five or more cattle, such intention should first be communicated to government.

One in five of the animals on commerce should be offered for sale to the government, or person/s or organisation/s whom the government my elect to be agents. That could be one cabinet minister, some parastatal, Zanu PF or any other person deemed suitable for government’s benevolence, at the expense of the lessee.

Should government not exercise its right of first refusal, the farmer is obliged to stick to the selling price that had been offered to government, notwithstanding the dynamics of the prevailing hyper-inflationary environment.

These provisions are clearly flawed at law in that they create a serious injustice, and they are unintelligible in economics in that they do not make economic sense.

The provision for the appointment of government agents is also politically deficient in that it opens up the whole system to abuse and patronage.

To further weaken the lessee, the agreement ensures that the farmer cannot freely transfer title over land. He would first have to apply to government for permission to transfer. Obviously, as with any other application, such application could be granted, or could be denied.

Such limits to the transferability of title wipe away the assurance given, as to the possibility of using the lease as a form of security of collateral.

Lenders and prospective farmers would rather deal with the party that wields more and actual power, that is government, than deal with an impotent new farmer whose tenure on the land is subject to numerous and nefarious conditions.

Without sound title to land, our farming system shall remain close to nomadic and fiefdom-type models of production.

Sound title lies in private ownership of land as enshrined in the title deeds system, as opposed to state ownership, which is reflected in the so-called 99-year lease agreement.

*Mhike is a Harare-based lawyer.

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