How to evaluate a property before you buy it in Uganda

Property transactions in Uganda are largely irreversible once completed. The diligence you do beforehand is the entire protection you have, and the cost of doing it thoroughly is a fraction of the cost of discovering a problem afterwards.

Title: the non-negotiable part

This is where the most serious risk sits, and it is not an area to economise on.

Engage a lawyer to conduct a search at the relevant land registry and confirm the registered proprietor, the tenure, and any encumbrances such as mortgages, caveats, or cautions. Verify that the person selling is the person entitled to sell, and where they are selling under a power of attorney or on behalf of an estate, that their authority is valid and current.

Understand the tenure type, because the rights and obligations attaching differ meaningfully, and where the land is leasehold, understand the unexpired term and the conditions.

Investigate occupancy on the ground. A registered title and a person living on the land who claims an interest are two different facts, and both matter. Physical inspection of the land, not merely the file, is part of title diligence in Uganda in a way it may not be elsewhere.

Where any of this is unclear, unresolved, or explained away, walk away. There is other property.

Physical condition

Engage an independent surveyor or engineer rather than relying on the seller's description or your own impression.

For a building, this covers structure and foundations, roof, water ingress, electrical installation, plumbing and water supply, drainage and septic arrangements, and the age and condition of any plant such as pumps or generators.

Visit more than once, including during the rains if the timing allows, and including in the evening to assess the area and security. A dry season viewing tells you nothing about the access road in April.

Rental viability

If the purpose is rental income, establish that demand exists for this type of unit in this location before committing.

Look at what comparable units in the area actually let for, not what the seller says the property could achieve. Count the letting boards nearby and note how long they remain. Speak to agents operating locally. Assess the commute at peak hours. Check the reliability of water and power with people who live there.

If the property is currently tenanted, review the tenancy agreements, the payment history, and the deposit position. You are buying the tenancies along with the building.

The numbers

Build the net yield, not the gross. Total acquisition cost including stamp duty, legal fees, agent fees and any immediate works. Realistic collected rent allowing for vacancy. Full costs including rental tax, management, maintenance, insurance and a provision for periodic capital items.

If the net figure does not work, no amount of enthusiasm about the location fixes it.

Transaction taxes

Stamp duty on the transfer, legal costs, and any withholding obligations depending on the parties. These are transaction costs, not afterthoughts, and they should be in the budget from the outset.

Documentation to retain permanently

The stamped transfer, the title documents, the sale agreement, evidence of the price paid, and receipts for all acquisition costs.

This file establishes your cost base. When you eventually dispose of the property, the gain is calculated by reference to what you paid and what you spent, and expenditure you cannot evidence cannot be included. A file discarded after five years costs money fifteen years later.

The discipline

Every stage above is a point at which you can decline. Sellers frequently apply time pressure, and time pressure exists to prevent diligence. A property that will not survive two weeks of proper investigation is not a property you want.