December 19, 2019

Can foreigners inherit land in Tanzania?

This month's briefing explores the recently proposed amendments to inheritance laws in relation to foreign heirs in Tanzania, with a particular focus on whether foreign heirs could inherit land.

Transmission is defined by the Land Act as "the passing of a right of occupancy, a lease or a mortgage from one person to another by operation of law on death or insolvency or otherwise".

This month’s legal briefing focuses on the Written Laws (Miscellaneous Amendments) (No. 8) Bill 2019 (the Bill), which among other things, proposes amendments to the Probate and Administration of Estates Act (the Probate Act). The Bill was tabled before Parliament for the first reading towards the end of 2019.

This briefing explores the following matters:

  • the proposed amendments to the Probate Act and how this may affect the Land Act
  • the Emmanuel Marangakis case

Key highlights in the Bill

Section 20 of the Land Act currently provides that non-citizens shall not be allocated or granted land, unless it is for investment purposes. Section 20 of the Land Act further states that a body corporate registered in Tanzania, whose majority shareholders or owners are non-citizens, shall be considered a foreign company for the purpose of the Act.

The High Court of Tanzania in the case of Emmanuel Marangakis Attorney of Anastasios Anagnostou vs The Administrator General, Civil Case No. 1 of 2011 case interpreted section 20 of the Land Act in relation to the ability of non-citizens of Tanzania to occupy and hold land in Tanzania by way of inheritance. The High Court essentially decided that section 20 of the Land Act does not restrict foreigners from occupying land in Tanzania through inheritance. Historically, foreign heirs had been relying on this High Court decision to occupy land by way of inheritance.

The Bill proposes to amend the Probate Act by adding the following drafting:

 "Subject to section 20 of the Land Act, an executor or administrator shall not distribute estate of the deceased which is of the nature of the landed property to a non-citizen entitled to benefit from the estate of the deceased, except that the executor or administrator shall only distribute to the non-citizen proceeds realised from disposition of a property in which the non-citizen has a right of inheritance."

The proposed amendment to the Probate Act as stated in the Bill, limits the application of the High Court decision by clarifying the nature of interest on land that can be passed to heirs who are non-citizens of Tanzania. The proposed amendment to the Probate Act states that a foreign person named in a will or who are identified as beneficiaries in case a person dies intestate, to benefit from the proceeds of the sale of the land but not for the foreign beneficiary to actually own the land. 

A practical example of such a beneficiary might be an individual who was once a Tanzanian citizen but gave up their Tanzanian citizenship (Former Citizen), however, their family still own property in Tanzania. If the Former Citizen is mentioned in a will / identified as a beneficiary to the land, the administrator or executor will sell the land and the proceeds from the sale will be presented to the Former Citizen.  

Relevant Case 

As highlighted above, prior to this new amendment, the question of inheritance to foreigners largely relied on the Emmanuel Marangakis Attorney of Anastasios Anagnostou vs The Administrator General, Civil Case No. 1 of 2011.

Facts

A Tanzanian woman of Greek origin, Diana Artemis Ranger, died intestate. She left behind an estate comprising, among other things, a landed property situate in Dar es Salaam, Tanzania (the Suit Property). The parties to the case stated that the deceased had only one surviving heir (her brother Anastasios), however, it was later discovered that the deceased had two other heirs namely, Iranis (niece) and Georgious (nephew). All three heirs were non-Tanzanians.

By Power of Attorney, Anastasios appointed Emmanuel Marangakis to be his attorney and agent in respect of his interests in the deceased's estate. With the consent of Anastasios, Emmanuel Marangakis applied for letters of administration of the deceased’s estate in Probate and Administration Cause No. 46 of 2006. 

In a compromise between Anastasios, Iranis and Georgious, it was decided that the Suit Property would go to Anastasios. However, when Emmanuel Marangakis attempted to distribute the Suit Property to Anastasios, the Administrator General prevented this from happening because Anastasios was a non-citizen, who is not entitled to own land in Tanzania by virtue of the provisions of the Land Act. 

Issues 

The High Court of Tanzania (the Court) analysed the following issues:

  1. whether the Administrator General can allow Anastasios to be legally bequeathed the Suit Property in the light of the provisions of the Land Act
  2. whether Anastasios, can pass his interest and have his share of estate transferred to  Emmanuel Marangakis, a Tanzanian citizen and duly appointed attorney
  3. whether the only solution is to dispose the Suit Property and pass the proceeds to Anastasios (the beneficiary) or Emmanuel Marangakis (the attorney)

Analysis

The Court argued that section 20 of the Land Act prohibits allocation and granting of land to a non-citizen. However, the bequest of a deceased's property upon his or her death is neither a grant nor an allocation of a right of occupancy but rather a transmission. 

Transmission is defined by the Land Act as "the passing of a right of occupancy, a lease or a mortgage from one person to another by operation of law on death or insolvency or otherwise". In addition, the Court drew attention to various provisions of the Land Registration Act to support its argument with respect to transmissions of land on death. Overall, the Court concluded that it is not in the spirit of the law to deny non-Tanzanian heirs from benefitting from property of their deceased relatives just because they are non-Tanzanians. 

Judgment

The Court therefore gave judgment as follows:

  1. that the Administrator General can allow the Suit property to be legally bequested to Anastasios in light of the transmission provisions in the Land Act and Land Registration Act
  2. that Anastasios (the beneficiary) can pass his interest and have his share of estate as aforesaid transferred to Emmanuel Marangakis
  3. it is not correct, in the eyes of the law, to say that the only solution is to dispose of the property and pass the proceeds to the beneficiary or his attorney

Conclusion

In light of the Bill, should this amendment become law, the amendment will undermine the current position held under the Emmanuel Marangakis case that disposition of property to pass proceeds to a beneficiary or his attorney is not the only solution for the beneficiary to inherit property. The new position will become clear that foreigners cannot inherit land but can rather benefit from the disposition of the land in which they are named as beneficiaries. As the Bill is currently being debated, we are unable to further speculate on its final outcome. 

We hope that this update has been useful. Should you require further information, please do not hesitate to contact us.