NEW RULES OF MORTGAGE OF UNDEVELOPED LAND IN TANZANIA: ISSUES AND COMMENTS

Abstract

In 2018 and 2019 respectively, the law of mortgages in Tanzania was amended by introducing the rules which, among others, require mortgagors of undeveloped and underdeveloped land to apply the obtained loans in developing the mortgaged land. Further, such loans should be invested in Tanzania. In this paper, it is shown that these rules have far reaching legal implications. First, they curtail the right of land holders to enjoy their interests in land by entering into mortgage arrangements for purposes of securing funds for purposes other than developing the mortgaged land. Second, the need to develop land comprised in the granted right of occupancy is already taken care of by prescribed conditions which come with the grant; the rules, therefore, amount to over-regulation. Third, third party mortgages over undeveloped and underdeveloped land are no longer possible. Fourth, the rules do not apply to mortgages of customary rights of occupancy and other informal mortgages; and this may defeat their purpose. It is recommended that the rules be abolished in order to leave room for mortgagors to enjoy their interests in land.

Key words: Mortgage, mortgagee, mortgagor, prescribed conditions, underdeveloped land, undeveloped land.