Malawi’s Ministry of Lands, Housing and Urban Development is struggling to collect ground rentals from property owners across the country with some of the uncollected rentals dating back to 1990, Weekend Nation has learnt.
Audit papers to the ministry Weekend Nation has seen show that in Southern Region alone, property owners owe the ministry about K45 million in ground rentals dating back to more than 20 years ago.
“There is long outstanding ground rent amounting to K44 753 350 [about $112 000] at regional commissioner for lands [South]. The Land Act Chapter 58.1 requires property owners to pay ground rent on annual basis.
“A review of land and property files disclosed that the office did not collect ground rent totalling K44 753 350 from property owners some of which date as far back as 1990. Consequently, it was doubtful whether the amount was recoverable.
“The audit review [also] disclosed weaknesses in financial control which were communicated to you in my report dated November, 2011,” reads the document in part.
In an emailed response to a questionairre on Monday, the ministry’s public relations officer Mike Chigowo said they have been failing to collect ground rentals from some property owners because of several reasons.
“You may wish to note that lessees are required to pay land rent on annual basis and this has been the normal trend. However, the ministry has not been able to collect the land rent in some cases due to change of contact details of lessees which makes it difficult for the ministry to reach them with demand notices for them to pay.
“Some people with agricultural leases were not quick enough to adjust to government policy of discontinuing payment of land rent direct through auction floors, but rather through the ministry.
“The manual land record keeping makes the process of reviewing land rent and issuing of land rent notice cumbersome and time-consuming,” said Chigowo.
He, however, contradicted the audit findings, saying it is not true that some uncollected rentals date back to 1990, adding that he could not give the overall amount the ministry is being owed in ground rentals because they use a manual record-keeping system.
“It is difficult to estimate how much is the land rental arrears because the land records, which are huge, are managed manually. The manual system of managing the record is not flexible enough to give holistic picture of available information rather than that of individual property owners only,” said Chigowo.
On penalties for defaulters, he said: “Failure to pay land rent is a violation of lease agreement and invites penalties. Those who fail to pay the land rent are supposed to pay an additional 10 percent of their fees if payment is not effected within 90 days from July 1 every year.
“Non-compliance of lease covenant attracts revocation of the lease and re-entry of land and ultimately the land is reverted to government as public land.”
Chigowo said the ministry has since embarked on public awareness campaigns for property owners to pay their rentals.
“The ministry is intensifying public awareness campaigns on land rent payment through radio and public notices. The ministry has intensified the process of updating and issuing demand notices including embarking on door-to-door delivery of these notices where possible,” he said.
Apart from ground rentals, the ministry is also being owed other amounts of money in form of outstanding duty, fees and development charges on land, according to the audit papers.
“Whenever government approves applications for lease on property, the applicant is supposed to pay in full the development charges with total fees and duties. Failure to do so results in the cancellation of the offer and the plot is withdrawn and re-allocated to another prospective developer on the waiting list,” reads the audit document.