Following the passing of Written Laws (Miscellaneous Amendments) Act No 1 of
2018 by the Parliament,
on 26th April, 2019 the Ministry of Lands, Housing and
Human Settlement introduced new regulations The Land (Procedure for Mortgage
of Land) Regulations of 2019 Government Notice No. 345.

Both the Act and the recent Amendment imposes restrictions on mortgage of
undeveloped and under developed lands in Tanzania.

To begin with the Act amended Section 45 (2) of the Land Act, Cap 113 and
introduced new provisions 120A, 120B, 120C, 120D and 120E the said amendment
has established the following new legal position;
1) Any land in Tanzania may be mortgaged for the purpose of obtaining money
from foreign or local bank only for the purpose of doing further development or
investment on the developed land. And if undeveloped or underdeveloped the
money obtained be utilized to develop the land whether partly or whole.
2) Any loan obtained from the bank/financial institution as a result of mortgage
whether foreign or local must be invested in Tanzania. Bank and Financial
Institution must submit to the Commissioner for lands a declaration that, the
money obtained is in fact invested in Tanzania.
3) Within 6 months of the mortgage, a mortgagor is required to submit a full
report indicating in which manner the money landed has been utilized to
develop the land mortgaged.
4) Further, the new provision defines local bank to mean any bank licensed by
the Bank of Tanzania to undertake the banking business in Tanzania and
Local financial institution to mean any entity licensed in Tanzania to engage in
the banking business, but limited as to size, locations served, or permitted
activities as prescribed by the Bank of Tanzania or required by the terms and
conditions of its licence.
5) The provisions went further and state that, non-compliance of the above
mortgage requirement constitutes a breach of conditions of right of occupancy
as per Section 45 (2) of the Act.
Hence, in order to ensure proper regulation of the above amendments the Ministry of
Lands, Housing and Human Settlements Development set forth Regulations under

Section 120E of the Act to apply in both Mortgage of a right of occupancy, lease of a
right of occupancy or derivative right as follows;
1) Apart from the definition of “undeveloped land” being provided by the Act, the
regulation has expanded it to also mean; if the land is vacant, without
unexhausted improvement in, on, under, or over such land; or without any
change of substantial nature in the use of the land. And as for agricultural
land, it shall be considered undeveloped if it has not been used for
consecutive period of two years (24 months).
2) The Regulations further, defines “under-developed land” to mean any land
which is only fenced, hedged, levelled, ploughed, cleared, or partially cleared
site of some former developments, or inadequately developed contrary to the
conditions of relevant right of occupancy.
3) Agricultural purposed the land will be considered under-developed if the
occupier fails to cultivate 1/8 (one eight) of the land from when the title deed
was issued or fails to cultivate 1/8 (one eighth) of the land during each of the
next 4 (four) years.
4) In addition to the above, the Pastoral land will be considered under-developed
during the 1 st year and each of the next 4 (four) years since the title deed was
issued if he/she fails to fully stock the livestock up to 1/7 (one seventh) of the
total area of the land.
5) While the regulation imposed a duty to the borrower to submit a special form
No 54H to the office of the Commissioner for Lands in triplicate also the
Mortgagee is required among other document to submit a copy of the
declaration by the Mortgagor endorsed by the Commissioner in relations to
the manner in which the Loan was used.
6) The Regulations went further and makes it an offence to submit a declaration
or report containing false informations, where upon conviction a person will be
liable to pay 1,000,000/- (Tanzanian Shillings One million) or imprisonment of
two years or both.

 The amendments only apply to the registered lands in Tanzania.
 It is compulsory to submit valuation report to the Registrar and the said report
must be submitted within 12months from the date on which it was issued,
prepared by registered valuer, approved by the Chief Valuer.
 Any loan secured by mortgage in Tanzania must be invested in Tanzania.

 Introductions of new statutory forms for mortgage of undeveloped and
underdeveloped Land.
 Insertion of proper definition of the term undeveloped and under developed
 Submitting a report to the Commissioner for lands on the utilization of a loan
secured by way of mortgage is mandatory.
 Investing money secured by mortgage outside Tanzania is a material breach
of right of occupancy and may result to revocation of the right of occupancy
and imprisonment.

To sum up, it is important for the Banks, Ministry of Lands, Housing and Human
settlement and other stakeholders to make awareness of the new regulations since
its totally different from the traditional way of processing mortgage in Tanzanian and
further to ensure proper supervision and monitoring of mortgage in Tanzania.