Gregory Myers, (1995):
Land Tenure Development in Mozambique, Implications for Econimic Development

APPENDIX 1: Summary of Relevant Property Laws in Mozambique

I. Colonial legislation

1. Decree 43 894, of 6 September, 1961 - Regulation Regarding the Occupation and Grant of Land in the Overseas Provinces - This law was effectively revoked by the 1975 Constitution and the 1979 Land Law. It is of interest both as the backdrop to the 1975 nationalization of real property and as the basis for the Real Property Registration Code which is still in force. Arguably, the administrative practice for the grant of urban land parcels is, in practice if not in law, derived from this legislation since the 1979 Land Law and its 1987 Regulations focus on rural land and are not relevant for urban land use.

Notably this law, while vesting control of public land in the overseas provincial government, provided for dual authority to grant land concessions, reserved certain lands defined as second class for indigenous persons and reserved urban (first class) and vacant (third class) lands for Portuguese and foreign persons, excluding so-called indigenous persons. While land for pre-dominantly urban uses - residences, commercial and industrial establishments - could be sold and privately owned, non-urban / rural land could only be rented for a fixed or indeterminate (emphyteusis) period. All land concessions were subject to use and improvement requirements and both private and the several rental titles could be revoked for failure to fulfill these requirements as well as for unauthorized transfers and non-occupation.

A close examination and comparison of Decree 43 894 and the 1979 Land Law reveal an interesting similarity in concept and structure. As one example under Decree 43 894 Class 2 lands held by indigenous persons were not subject to titling and registration procedures. Under Law 6/79, family sector holdings - applicable to the vast majority of Mozambicans - are also not subject to title and registration, in this case a license. Some of the terminology, such as the definition of public domain lands (article 1 of Decree 43 894) and partial protection zones (article 27 of Law 6/79), is the same as well. Under both the Decree and Law 6/79, rights in land could not be obtained by mere occupancy or prescription and both contain corollary mandates that the grant and continuation of rights in land are subject to use and improvement requirements.

2. Decree no. 47 486 of 11 March, 1967 of the Overseas Ministry of Portugal - This decree defined the mechanism for the legalization of illegal (unauthorized) occupation of land. While the Regulation for the Concession and Occupation of Land in the Overseas Provinces (described in the preceding paragraph) had expressly forbidden the acquisition of land rights, the preamble and content of this Decree 47 486 indicate that untitled occupancies were very prevalent. Interestingly the rationale given for titling is the need to impose use and

improvement requirements since the State is not interested merely in legalizing land occupancies.

3. Decree 44 531 of 18 September (Overseas Ministry) - Forestry Regulations.

Legislative Diploma no. 2642 of 20 September (of the Governor of the Province of Mozambique) - Regulations for the licensing and use of trees and forested land. Landholders may use the forest and forestry products from their land for their own needs but if for commercial sale, such use is subject to license. Defines forestry zones subject to partial and total protection.

4. General Regulations for Urban Buildings of 10 May, 1960 (approved by Legislative Diploma no. 1976) - These regulations are still in force.

5. Decree-Law 47 611 - Urban Real Property Code (published 27.2.68, effective as of 1.6.67) - defines the procedures for the registration and resolution of any error or conflict concerning urban real property. Still in force but not strictly enforced. For example, Decree 9/76 of 11 March was promulgated in order to extend by fifteen days from the date of publication (March 11, 1976) the time limit for conclusion of the registration of property nationalized pursuant to Decree-Law 5/76 of 11 March. Decree 12/90 of 4 July was promulgated for the purpose of mandating the registration of the property nationalized under Decree 5/76 in accordance with the Real Property Registration Code, ignoring the implicit acknowledgment of this obligation to register such property set forth in the aforementioned Decree 9/76. Conversely it was in fact necessary to specially re-legislate the registration, since the title to very few properties had ever been regularized and properly transferred to say nothing of properly registered.

6. Decree-Law no. 576/70 of 24 November - authorizes and regulates the expropriation of land for urban planning and expansion. Authorizes a preference (actually a preemption since the municipality may set the price) to be given to municipal authorities in respect of the sale of any real property covered by an urban plan.

7. Law no. 6/73, of 13 August (Overseas Land Law) - Attribute to the Overseas Provincial Government the exclusive control of vacant land (Class 3). Defines as private property all property held under a definitive (permanent) real property right or interest.

II. Post-Independence Legislation

1. Constitution of 1975 - This Constitution (amended in 1978) is the basis for the 1979 Land Law. It has been superseded by the 1990 Constitution.

2. Decree-Law no. 16/75, of 13 February - Authorized and established the procedures for (1) the intervention by the State in the management of businesses which had been abandoned or mismanaged; (2) the reclamation by the owners of the management of the business; and (3) the eventual expropriation by the State. The basic standard or grounds for state intervention was the abandonment of the business or other property interest for a minimum period of ninety days. Non-residence in Mozambique was deemed to constitute such abandonment. Many businesses were intervened but their legal status was never regularized until starting in 1989. Decree 21/89 sought to achieve this regularization through the setting of time limits and specific obligations, but was considered too cumbersome and not appropriate for all sectors, especially agriculture. Laws 13, 14 and 15/91 of 3 August together with the regulations set forth in Decree 28/91 of September clarified and are in effect the operative statutes for this subject matter. In one case - the nationalization of Petrogal and the petroleum refinery it owned -there has been a formal process of adjudication of compensation for the nationalized property.

3. Decree-Law no. 5/76, of 5 February - Nationalized (1) all real property - buildings and land - not occupied by the actual owner; (2) all shareholdings of non-residents in corporate owners of buildings; and (3) all apartment buildings. Compensation limited to a value equal to the undepreciated portion of equity capital invested in the property. All sales and other transfers are subject to the prior approval of the State which has a right of first refusal. The State is attributed the exclusive right of the rental of real property.

4. Decree 9/76 of 11 March - Promulgated in order to extend by fifteen days from the date of publication (March 11, 1976) the time limit for conclusion of the registration of property nationalized pursuant to Decree-Law 5/76 of 11 March. As noted in the section under Decree, neither the original nor the extended limit was observed.

5. Law 6/79, of 3 July - Established the legal framework for residential, commercial, industrial real property, establishing the principles to guide the licensing and the use of land. As set forth in the Constitution, property rights are vested in the State who determines how land is to be used. The only title allowed is a usufructuary right subject to a term of years (indefinite in the case of persons who previously owned the property) and any transfer is subject to State authorization. The Land Law, while setting the standards, remained non-operational until its regulations were enacted in 1987, which, among other things, set the forms and procedures for the issuance of land titles.

6. Law 8/79 of 3 July (Rental Law) - sets the basic principles governing the rental and the use and occupancy of rental housing.

7. Diploma Ministerial no. 71/80, of 30 July - Rental regulations.

8. Law no. 1/86, of 16 April - amended Law 6/79 (Land Law) to provide that the term of years of a title for use and benefit of real property was 50 rather than 5 - 15 years.

9. Decree no. 16/87, of 15 July - Established the operational regulatory framework for the Land Law, providing for two types of title - the land use and benefit license (provided for in the Land Law) and the occupancy certificate (not mentioned in the Land Law).

10. Decree no. 12/90 of 4 July - Made the registration of real property which reverted to the State or which was nationalized obligatory and defines the documents required for the registration of such real property.

11. Constitution of 1990 - Reaffirmed the State's ownership and control of the use and benefit of land. Expanded the State's recognition of property rights to include those obtained by occupancy as well as those obtained through inheritance. Adopted market in substitution of centralized socialist economic principles.

12. Law no. 5/91, of 9 January - Authorized (1) the construction of dwellings for personal use, for sale and for rental by private individuals and entities as well as by State entities; (2) the acquisition of ownership of apartments and other dwellings by the actual tenant provided the tenant is of Mozambican nationality; and (3) the free sale and other transfer of private real property, revoking the requirement in Decree Law 5/76 that all such transfers are subject to a right of first refusal and authorization by the State. Although Law 5/91 does not expressly revoke Decree-Law 5/76, it does reverse the effects of Decree-Law 5/76.

13. Decree no. 2/91, of 16 January - Sets the procedures for the sale and for the determination of the value of housing to be sold to the occupant. Restricts the initial and any future sale to Mozambican nationals.

14. Ministerial Diploma no. 86/91 of 24 July - This legislation which permitted the sale of ruined buildings was revoked by Ministerial Diploma no.97/92 of 8 July which repeats many of the provisions of M.D. 86/91 but provides greater detail of the procedures. See M.D.97/92 below.

15. Decree no. 31/91 of 26 November - Regulations establishing the authority and operational procedures for the Commission which oversees the valuation and sale of State owned buildings. This Commission is subordinated to and operates out of the Ministry for Construction and Water.

16. Ministerial Diploma no. 41/92, of 25 March - amends article 23 of the Rental Law Regulations. The principal result of this amendment is to place the responsibility for the maintenance and repair of rental housing on the tenant and to set fines for the violation of the different aspects of this obligation. Also all transfers of industrial, commercial and service oriented real property are required to register the transfer for purposes of updating the rental rate.

17. Law no. 7/92 of 6 May - This law resulted from a parliamentary discussion wherein it was determined that at best it was unclear whether so-called "precarious" housing (housing built from mud bricks, zinc, straw, wood as well as cement) was nationalized in 1976. The law confirmed that such "precarious" housing was nationalized and provided for the indemnization of owners. Regulations were to be promulgated within 180 days of promulgation, but to date have not.

18. Ministerial Diploma no. 97/92 of 8 July - Revoked Diploma Ministerial no. 86/91 of 24 July which dealt with the same subject matter. As a complement to Law 5/91 which permits the sale of occupied buildings to their occupants, this legislation authorizes the sale of buildings whose construction is incomplete or in ruins. Ruins is broadly defined to include buildings which are in an advanced state of degradation. Such buildings may only be sold to persons of Mozambican nationality. However a company is defined as Mozambican if it is established under Mozambican law and has its headquarters in Mozambique (thus a "Mozambican" company may be one hundred per cent foreign owned and controlled and still qualify as a Mozambican national for the purposes of this law). Conversely for purposes of Decree-Law 5/76, Law 5/91 and related legislation, a company is considered foreign (and thus prohibited from purchasing buildings) if the majority of the shareholders or share capital are foreign owned.

19. Ministerial Diploma no. 119/92 of 12 August - establishes the Central Commission for the Valuation and Sale of State Owned Buildings. Provincial Commissions are to be established by order of the provincial governor.

20. Decree no. 21/92, of 25 August - establishes the Inter-Ministerial Commission for the Sale of Buildings.

21. Ministerial Diploma no. 152/92 of 30 September - Establishes three subordinate sub-commissions and further defines the procedures for valuation and sale of State owned housing. Provides that in the case of a claim for indemnification by a former owner that the procedures and criteria established in Decree-Law 5/76 shall be followed.

22. Despacho: Ministries of Finance and of Construction and Water - sets rents payable in foreign currency for residential property at an average US$10.00 per square meter. (These rates were considered so high that in the face of threat of more than just a few embassies and NGOs, the rates were never enforced.

23. Diploma Ministerial 21/93 of 3 March - sets the basis and procedures for indemnization of former owners of dwellings and other buildings which were nationalized under Decree-Law 5/76. Indemnization will be given only for undepreciated equity invested capital as provided in Decree-Law no. 5/76. Provides for the late submission of indemnization claims where duly justified.

III. Nationalization, Denationalization and Economic Restructuring

1. Decree-Law 16/75 of 13 February (see II-3 above) - the statutory basis for the majority of the nationalizations of property which occurred. Property which was abandoned for a period of ninety days or longer can be nationalized. This law is still in force and is the basic instrument for the regularization and restructuring of the economy from one which is centralized and State controlled to one which is market driven.

2. Decree-Law 18/77 of 28 April - provided for the nationalization of capital participation and other shareholdings in general and limited partnerships and limited companies (sociedade por quotas) belonging to persons not resident in Mozambique, grants the State a right of first refusal on the transfer of shareholdings and capital participation, and required ministerial approval for the establishment of a company. This law which had defined the parameters for private enterprise within a centralized state controlled economy was revoked by Law no.13/91 of 3 August (see below).

3. Decree-Law 19/77 of 28 April - requires the deposit in a State banking institution of bearer certificates. If such stock certificates are not deposited, they are deemed nationalized. All bearer certificates were to be changed to nominative certificates. This law was revoked by Law no. 14/91 , of 3 August.

4. Decree no. 21/89 - authorizes and defines the procedures for the sale and transfer of State property. This legislation was never really implemented until the promulgation of Law 15/91 of 3 August and its regulations enacted pursuant to Decree 28/91 which simplified and clarified the procedures and authorities of the institutions involved.

5. Law no.3/91, of 9 January - provided for the reversion to the State (nationalization) of public limited company stock shares and also property held as collateral which have been inactive for a period of ten years or more. Inactive means that the owner has not collected or attempted to collect dividends etc. or otherwise demonstrated their ownership or control of the shares. The enactment of this law at this time was intended to fill a legal lacuna and to permit the regularization of the legal status of public limited companies which had been abandoned, intervened or nationalized by the State.

6. Law no. 13/91 of 3 August - Authorizes the restructuring including the privatization of businesses and other enterprises which the State had assumed legal or de facto control. Sets a period of three months from the date of publication of this law in which former owners or shareholders may request the devolution of ownership and / or the management of the company and / or request indemnization. This is in effect an additional period to that provided under Decree-Law 16/75. The indemnization to be given is to be determined on the basis of what is just and equitable.

7. Law no. 14/91 of 3 August - Revoked Decree Law 19/77 of 28 April and reinstates the validity of article 166 of the Commercial Code. This article 166 applies to public limited companies (sociedade anónima) and provides that its capital, subscribed in money or other value is held by shares which must be nominative if the share value is not fully subscribed. Once fully subscribed, the share owner may request the issuance of bearer certificates.

8. Law no. 15/91 of 3 August - established the framework for the restructuring of State owned businesses and capital participation. This law supplements and effectively supersedes the framework defined in Decree 21/89 which was, in practice, found to be too narrowly drawn and impracticable. This law is the legal basis for the restructuring and privatization which is now being undertaken. This law like 21/89 does not contain any provisions specific to the treatment of either developed or undeveloped land.

IV. Other Related Legislation

1. Civil Code of 1967 - defines the basic legal principals applicable to ownership, possession and other rights, interests and relationships in respect of personal and real property. While a number of the provisions of this Code have presumptively been revoked, no provision has specifically been revoked nor has there been a formal revision of the Code.

Book III, Title I (articles 1251 - 1301) defines the forms, method of acquisition and loss of possession or control exercised over property. Book III, Title II (articles 1302 - 1438) defines rights in respect of real and personal corporeal (tangible) property, including the basic precepts of expropriation, adhesion, real property use rights including the construction of buildings and walls, the use of water, the use and planting of trees and other plants, individual and common property rights; Book III, Title III (articles 1439 - 1490) defines easements, usufruct, use and dwelling rights; Book III, Title IV (articles 1491 - ) defines forms of property rights such as rental, emphyteusis, surface use rights and easements.

2. Law 16/92, of 14 October & Decree no. 15/93, of 25 August - Law 16/92 revoked Decree-Law 29/75 of 23 October and authorized the exercise by private individuals of topographic, cartographic and other land survey related activities. Decree 15/93 regulates the licensing of qualified professionals in this area and the practice of their professional activities.

3. Ministerial Diploma no. 36/93 of 21 April - Separated the Real Property Registry from the Commercial Registry. The two registries had previously been joined because with State ownership of real property (land and buildings) as well as most businesses, there was little use of the registries. With the reorganization and privatization of the economy including the private ownership of housing and other buildings, the obligation to register such property becomes relevant once more.

4. Decree no. 3/87 of 30 January - This legislation while carrying out a general overhaul of the tax system and Income Tax Code "suspended" the property tax code (Contribuição Predial) in its then existing form until such time as it could be reviewed and made consistent with actual property law and practice.

5. Law no. 4/92 of 6 May - Established the Community Courts which function at the level of administrative posts and localities (the lowest levels of administrative and territorial division), suburban areas and villages. The Community Courts are authorized to deal with small claims including family disputes on a reconciliatory basis but also to decide matters on the basis of equity and customary practice. Litigants or the tribunal itself may refer matters to the district judicial court. It is proposed that specific instructions or regulations be issued in respect of the court's authority to deal with disputes and claims in respect of land including in particular the consideration of local customary practices. It is also proposed that similar guidelines be given to the Judicial Courts which were established and are regulated by Law no. 10/92 of 6 May.

6. Law no. 16/91 of 3 August (Water Law) - regulates all aspects of the use and control of water resources. Of particular note is article 71 which provides that traditional common water use will be recognized and registered provided that it does not conflict with other private uses authorized by law and is a beneficial use.

IV. Reorganization and Privatization of the Economy

1. The basic legislation in this area are Decree Law 16/75 and Decree-Law 5/76 which are described above. These laws are the basis for not only the nationalizations and interventions which occurred but also for indemnization claims and for the regularization of the legal status of the businesses which were intervened or nationalized.