Q&A – 28 November 2011
Sale of mortgaged property
I defaulted in paying back money that I had borrowed from a company to which I had also mortgaged my property. I then travelled for some time and came back to see that the title has passed from me to that company (the mortgagee). Can the mortgage purchase my land? How can I challenge this transaction? What should I do?
DP, Dar
You have admitted that you are in default and the company you had borrowed funds from (the mortgagee) has very likely exercised its rights under the mortgage.
If you were in default, the Mortgagee has very likely done one of two things. First option available would be to give you a default notice of 60 days and a further notice to sale of 14 days and proceed to get the property auctioned. The law states that where the mortgaged land is to be sold by public auction, the mortgagee may bid for and purchase the mortgaged land at that public auction so long as the price bid for the mortgaged land by the mortgagee is the highest price bid for that land at the auction or equal to or higher than the reserve price, whichever is greater.
Hence from the above, you should find out how the transaction took place, and if it was by way of auction, then the notice periods above must have been complied with. In short, after complying with the above, the mortgagee can purchase the mortgaged land.
The other option that the mortgagee might have utilized is for the mortgagee to exercise its power of sale under the mortgage, which means that no auction is required. The Land Act is quite clear in that a mortgagee exercising the power of sale may sell to himself only if a Court gives him leave to do so.
The law further states that the Court shall not grant leave unless the mortgagee satisfies such Court that a sale of the mortgaged land to himself is the most advantageous way of selling the land so as to comply with the duty imposed on the mortgagee. In a power of sale, apart from giving a 60 days notice, the mortgagee must also give an additional 10 days notice to the mortgagor and to any third party holding a registered interest in the property after the expiry of the 60 days notice. It is likelier that the mortgagee bought the property through an auction- your lawyers can guide you further.
Court summons to appear as witness
I have been brought a summons by my neighbor to appear as a witness in a matter that I have nothing to do with. Much as I would like to help my neighbor, I do not like the idea of wasting time in Court. It is just not me. I have flatly refused to appear in Court; after all I have a right to refuse. Now the neighbor is threatening me that if I don’t show up I might end in jail. I still refuse to go.
OO, Dar
We are not sure what the question is as you abruptly ended. We however assume that you are asking us whether or not you should go as a witness after you have been summoned by the Court.
Our law is clear in that if without sufficient cause or excuse, a witness does not appear in obedience to a summons after being served with the summons, the Court may issues a warrant to bring such witness before the Court at a specified time and place. The Court may also, if satisfied by evidence on oath that such witness will not attend until compelled to do so, issue a warrant of arrest and cause him or her to appear before the Court.
You thus have two main options: either you comply and appear in Court voluntarily or wait to be compelled/arrested and brought before the Court. We would recommend the former.
On a more general note, you cannot normally stop anyone from calling you as a witness in a case so long as you are competent and compellable.
Process at TIC
We are a foreign company intending to invest in Tanzania and wish to be registered under the Tanzania Investment Act. How do I purchase a certificate of incentives from the Tanzania Investment Centre? Can I own residential property under this certificate?
VW, Cape Town
You need to apply for a certificate of incentives and cannot just merely buy one. The certificate of incentives is issued by the Tanzania Investment Centre (TIC) which is the primary agency of Government to coordinate, encourage, promote and facilitate investment in Tanzania and to advise the Government on investment related matters.
Certificate of incentives are granted to investors who intend to invest over Usd 300,000 in Tanzania in a project. Among the requirements for obtaining the Certificate of incentives includes filling out a TIC application form which you can obtain at the TIC offices after paying a fee of Usd 100. To this application you must attach a copy of the company’s memorandum and articles of association, a certified copy of the certificate of incorporation, a brief profile of investors and the investment, evidence of sufficient finance capital available to implement the project, board resolution to register the project with TIC, a project implementation schedule and the project’s business plan/feasibility study.
The business plan/feasibility study should touch upon foreign exchange generation and savings, import substitution, creation of employment opportunities, linkage benefits, transfer of technology, expansion of production of goods and services etc. Also the study should contain information like clear statement of the project objectives, information regarding the investor (profile), details of investment costs (foreign and local expected capital expenditure), how the proposed investment will be financed, specific sources(s) of finance for the project, terms and conditions of the loan if applicable, sources of technology if applicable, project financial and economic analysis, market study, project capacity, production process if applicable, environmental impact assessment if required, expected employment generation, proposed implementation schedule etc.
It must be stated that the TIC certificate of incentives allows a foreign company to own land for investment purposes. Hence buying land for non investment purposes under the TIC certificate is not allowed. Residential property for the company is unlikely to be interpreted as being for investment purposes. You should however also consult the TIC offices for further guidance.