Syovata Ndambuki

On April 11th, 2025, the Supreme Court of Kenya issued a ruling that stirred discussions across the property sector. The judgment in Petition No. E033 of 2023: Harcharan Singh Sehmi & Another vs. Tarabana Company Limited & 5 Others addresses a critical question: What happens when your land lease expires, and you haven’t renewed it?

The Court’s answer is clear and direct: the lease ends, and the land reverts to the Government—even if you continue occupying it and paying land rent.

While the ruling was celebrated as a victory for the family and a form of security for leasehold landowners against unscrupulous land dealers – there are more takeaways.

Case Summary: Harcharan Singh Sehmi v Tarabana Co. Ltd

The dispute revolves around a parcel of land in Ngara, Nairobi—L.R. No. 209/2759/9, originally registered to Harcharan Singh Sehmi (now deceased) and two others, who bought it in 1968 as tenants in common. The land was a leasehold title set to expire on 1st October 2001, having been granted for 59 years from 1942.

In 2014, the appellants (Harcharan and others) were forcibly evicted from the property by individuals claiming ownership under a new title. These individuals were linked to the 1st and 2nd respondents in the case. This prompted the appellants to file a case at the Environment and Land Court, seeking to reclaim possession and block what they considered unlawful occupation by the new owners.

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The appellants argued they had applied for an extension of their lease in July 2001 – three months before it expired, though they couldn’t produce the actual application form.

Instead, they relied on correspondence between government offices—including the Commissioner of Lands and the Directors of Physical Planning and Survey—which showed there were no objections to extending the lease. They also cited a 2009 letter indicating that the lease extension had been recommended for approval.

The Supreme Court affirmed that upon the expiry of a lease and without a renewal, the lease ceases to exist. The land automatically reverts to the Government.

Despite this, the Commissioner of Lands continued to seek fresh confirmations and did not finalize the extension. Meanwhile, the appellants maintained possession of the land until October 2014, when they were evicted by the respondents who presented a different title to the same land.

The appellants alleged that the respondents’ title was fraudulently and illegally obtained and that their eviction was unjust, given their ongoing efforts to extend their lease. They also reported the matter to the Director of Criminal Investigations (DCI) in 2011 after the first signs of interference.

This long-standing legal battle eventually reached the Supreme Court, where the central issue became whether a lessee who continues to occupy land after the lease has expired—without a formal extension—retains any legal rights to the property.

Due Diligence

According to the Kenya Law documentation of the case, the 2nd respondents (who sold the land to the 1st repondent) denied the accussations that they obtained the land illegally.

“In its defence, the 2nd respondent denied any unlawful acquisition of the suit property, asserting that the appellants’ lease had expired on 1st October 2001, and the property had therefore reverted to the Government of Kenya. The 2nd respondent also claimed that it applied for and was lawfully allocated the property in 2010”.

The 1st respondent (the new owner) also claimed to have conducted thorough due dilligence.They said they legally bought the land from the 2nd respondent and were not aware of any wrongdoing or fraud.

They claimed to have done proper background checks, which showed that the original lease had expired in 2001 and the 2nd respondent had been officially registered as the new owner in 2009.

The 1st respondent also said they had used the land to get a loan, built a multi-storey building on it, and used the income from the development to repay the loan. Lastly, they accused the original owners of harassing them and disrupting their peaceful use of the property.

What happens to expired leases?

In it’s ruling,delivered on 11th April 2025, the Supreme Court firmly held that upon the expiry of a lease and without a renewal, the lease ceases to exist. The land automatically reverts to the Government and its status transforms from a leasehold estate to government land.

Crucially, the court further clarified that even if a lessee continues to occupy the land after the lease expires and continues to remit land rent and rates, this does not grant them any equitable interest or right to the land. The expired lease is considered extinguished for all legal purposes.

Legitimate Expectation for Timely Applications

However, the ruling offers a crucial point of relief for diligent leaseholders. The Supreme Court explicitly stated that a lessee who makes an application for the extension of their lease before it expires has a legitimate expectation that the lease will be extended.

The Supreme Court restored ownership of the land to Harcharan Singh (now deceased) and the two other co-owners, after a decade long legal battle.

Wake-Up Call to LeaseHold Land Owners in Kenya

While this ruling has been interpreted by many as an extra layer of protection for leasehold land owners in Kenya, there are more takeaways and possibly more questions than answers:

• Lease Renewal is not Automatic: The judgment definitively clarifies that there is no automatic renewal of a lease upon expiry, regardless of continued occupation or payment of land rents and rates.
• Proactive Action is Key: Leaseholders must be proactive and initiate the lease renewal process well in advance of the expiry date. Waiting until the lease expires will likely result in the loss of rights to the land. Making an application “just before the lease” expires also presents the risk of suffering government backlogs and flawed communication systems. However, questions linger on when exactly a leashold property owner should apply for renewal?
• Government’s Position Strengthened: The ruling reinforces the government’s ownership of land upon the expiry of a lease, providing clarity on the legal status of such land. However, re-allocation to other people in the future, after a lease has expired remains a grey area.
• Government’s duties: The Supreme Court took into consideration the government role in renewing leases and the need for accountability when it comes to backlogs and delayed responses.

What This Means for Potential Investors

This ruling has broader implications for the property sector, leashold land owners and the general masses:

• Increased Awareness: It highlights the importance of understanding different land tenure systems in Kenya and the specific conditions attached to each.
• Due Diligence for Buyers: Potential buyers of leasehold property must be even more diligent in verifying the legitimacy of root titles, especially if any of the previous owners was a leasehold owner. In addition, physical assessment of properties is crucial if victims of fraudulent land purchases will claim “innocent buyer” scenarios. For instance, one question raised in court proceedings was why the 1st respondent proceeded to buy the land without questioning why it was occupied at the time of purchase with permanent structures visible on the plot?
• Policy Considerations: The ruling may prompt discussions and potential policy adjustments regarding leasehold management and renewal processes to protect future buyers and current leasehold owners.