Mortgage bill is a progressive law
PARLIAMENT has at long last passed the Mortgage Bill, 2007 seeking to consolidate the laws relating to mortgages, revamp the mortgage industry and make a law that is consistent with the Constitution and the Land Act.
PARLIAMENT has at long last passed the Mortgage Bill, 2007 seeking to consolidate the laws relating to mortgages, revamp the mortgage industry and make a law that is consistent with the Constitution and the Land Act.
According to the Lands minister, Omara Atubo, the law would help the mortgage industry to grow, by encouraging development, especially for those who want to mortgage houses. The Bill provides for mortgaging of a matrimonial home and consolidation and variation of mortgages.
There had been serious resistance to the Mortgage Bill in Parliament largely due to some of its clauses relating to mortgaging customary land.
A section of the MP was concerned that these provisions would create a situation where the poor would mortgage their land and eventually render entire families or communities landless, which would precipitate social unrest. Eventually a compromise position was agreed upon. The Bill now prohibits the mortgaging of family or communal customary land. Only an individual who owns customary land will be free to mortgage it, but with the consent of the spouse and children.
The Bill is a progressive legislation, even though it has imposed limitation on mortgaging customary land. Over 75% of land in Uganda is held customarily. Customary tenure has two broad classifications; Communal customary tenure predominantly in northern and parts of eastern Uganda and individual/family/clan customary tenure prevalent in central, western, and some parts of the north.
The Bill that was passed will therefore, still leave out majority of the poor who are owning land under the family and the communal/clan tenure system. In spite of this, the passing of this Bill is a step forward because it opens up opportunity for the individuals owning land under the customary land tenure system to accessing credit
Nevertheless, it is important that political and civil leaders educate the local people not to recklessly mortgage their land. The poor could end up losing their land to banks or even the unscrupulous money lenders.
According to the Lands minister, Omara Atubo, the law would help the mortgage industry to grow, by encouraging development, especially for those who want to mortgage houses. The Bill provides for mortgaging of a matrimonial home and consolidation and variation of mortgages.
There had been serious resistance to the Mortgage Bill in Parliament largely due to some of its clauses relating to mortgaging customary land.
A section of the MP was concerned that these provisions would create a situation where the poor would mortgage their land and eventually render entire families or communities landless, which would precipitate social unrest. Eventually a compromise position was agreed upon. The Bill now prohibits the mortgaging of family or communal customary land. Only an individual who owns customary land will be free to mortgage it, but with the consent of the spouse and children.
The Bill is a progressive legislation, even though it has imposed limitation on mortgaging customary land. Over 75% of land in Uganda is held customarily. Customary tenure has two broad classifications; Communal customary tenure predominantly in northern and parts of eastern Uganda and individual/family/clan customary tenure prevalent in central, western, and some parts of the north.
The Bill that was passed will therefore, still leave out majority of the poor who are owning land under the family and the communal/clan tenure system. In spite of this, the passing of this Bill is a step forward because it opens up opportunity for the individuals owning land under the customary land tenure system to accessing credit
Nevertheless, it is important that political and civil leaders educate the local people not to recklessly mortgage their land. The poor could end up losing their land to banks or even the unscrupulous money lenders.