Of minors and registration of land in trust

Guest post by Samuel G. Njenga

You probably don’t trust your wife/husband that much and you think it is wiser to register that property in the name of the kid. In the new act (Land Registration act 2012) the issue of minor’s registration is dealt with in section 47:

1.     “The name of a person under the age of eighteen years may be entered in the register to e n a b l e the minor’s interest to be held in trust and shall be registered under the name of the guardian either on first registration or as a transferee or on transmission.

2.     Nothing in this section enables a person under eighteen years of age to deal with land or any interest in land by virtue of such registration, and, if the Registrar knows a child has been registered, the Registrar shall enter a restriction accordingly.

3.     If a disposition by a minor whose minority has not been disclosed to the Registrar has been registered, that disposition may not be set aside only on the grounds of minority”

In simpler words the minor’s name will be entered in the register but the minor cannot transact in the land till they reach 18yrs of age. When the minor reaches 18 years of age, the trust lapses automatically.

The title is usually registered under the name of the guardian (s) as trustees of the minor as below:

Guardian 1 name and Guardian 2 name … as trustees of Child of Birth Cert no…

In the event that the guardian is more than 1 and the one of them expires (dies), then the other guardians cannot take charge of the entire trust, in fact the deceased guardian ought to be replaced. The details of the trust should basically deal with how the transmission will be done. In the event the details are not there, then laws on general trusts will prevail. If all the guardians expire, then an option of the public trustee taking charge may be explored.

So, how is a minor to be protected?

When a guardian or guardians registered in trust decide to transact with the land, then it must be in the interest of the minor. Suppose you are purchasing such a piece? Ideally, when you are in the know that the land is under a trustee then you may want to ensure that the money you pay goes into an account in the name of minor and if such an account does not exist then it is prudent to insist that one is opened by the guardian.

A good registrar should actually seek to understand why the land is being sold and should at least ensure the minor is protected. It may not be strictly in the law but the interests of the minor must come first. As a buyer never write cheques in the name of the guardian especially when you know that they are just but trustees. It actually means they don’t own the land but are just holding it on behalf of somebody else.

Did u know that welfare groups cannot own property including land? In fact, if such a group wants to own land it can only be registered in the names of some or all of the members in trust.

Next we look at leveraging on debt in real estate.