Once a condominium plan is registered, the original "parent" title ceases to exist as an active instrument. Any contract purporting to sell the property by reference to the closed parent title is void

Waboga David
Dec 24, 2025
10 min read

High Court Affirms: Once a property is subdivided into condominiums, the original title is "closed." A developer cannot sell the building as a single block thereafter without first terminating the condominium status via a unanimous vote of unit owners.

Facts

The case involved a dispute over ownership and possession of 24 condominium units in a commercial building known as "Blacklines House" (later rebranded as "Shumuk House") located on Plot 2 Colville Street, Kampala, Uganda, originally under LRV 3606 Folio 13 (a 99-year lease from March 1, 1912, expiring March 1, 2011). The building was subdivided into 92 condominium units under Condominium Plan No. 0045 in 2006, creating separate leasehold titles for each unit.

In June 2005, the late Bonney Mwebesa Katatumba sold 13 units (Nos. 1, 63, 69, 71, 75, 77, 78, 79, 80, 98, 99, 100, 101) to Virani Bahadukali Mohamedalli for an undisclosed amount. These were registered in Virani's name on July 29, 2009.

In August 2007, Katatumba sold 11 units (Nos. 52–62) directly to Peter Lule for US$375,000. Lule paid in full, received 10 titles and possession, but the title for Unit 61 was withheld (initially untraceable, later mortgaged to East African Development Bank and then Crane Bank Ltd.).

Facing debts, Katatumba attempted to sell the entire property (including all units) to Shumuk Springs Development Ltd on August 16, 2008, for US$5,000,000, with part of the payment allocated to "creditors" (including Virani at US$750,000 and Lule at US$400,000). This agreement was repudiated due to non-payment.

On November 10, 2008, Katatumba resold the property to Springs International Hotel Ltd (affiliated with Shumuk) for US$4,000,000, again allocating funds to "creditors" (Virani at US$675,000, Lule at US$450,000 for 9 units). Springs redeemed mortgages, took possession of 65 units, and rebranded the building but did not pay the full price or settle with Virani/Lule.

On August 26, 2009, Joseph Sempebwa purchased Virani's 13 units for US$725,000, received signed transfer deeds, but could not register due to a caveat by Shumuk/Springs. Sempebwa was denied possession.

In October 2009, Shumuk entities and Mukesh Shukla sued Katatumba and others to protect their "contingent interest." The suit was dismissed in 2012, leading to counterclaims by Sempebwa (against Shumuk Springs and Shumuk Financial Services) and Lule (against Shumuk entities and Katatumba's estate).

Leases expired in 2011. Shumuk/Springs renewed 65 units but not the disputed 27 (including the 24 here). A related suit (HCCS 126/2009) in 2014 voided the November 2008 agreement, ordering specific performance of the August 2008 deal and cancellation of Springs' titles, with an appeal pending.

The counterclaimants sought declarations of ownership, possession, mesne profits, damages, and title recovery. Defenses included claims of fraud, expired leases, and no cause of action.

ISSUES

Whether the two sale agreements between Katatumba and the counter-defendants affected the rights of Peter Lule and Joseph Sempebwa in relation to the 24 condominium units
Whether Peter Lule is the lawful owner of the 11 condominium units
Whether Joseph Sempebwa is the lawful owner of the 13 condominium units
What remedies are available to the counterclaimants

Submissions

Counsel for the 1st Counterclaimant (Joseph Sempebwa):

Argued that Virani's 2005 purchase from Katatumba was valid and unaffected by the 2008 agreements, as Katatumba had no title left to sell. Sempebwa's 2009 purchase was lawful, with due diligence showing Virani's clean title. Shumuk/Springs had knowledge of Virani's interest and fraudulently renewed some leases. Sought possession, mesne profits (US$19,500/month from August 29, 2009, at US$1,500/unit), cancellation of Shumuk titles, and interest at commercial rates.

Counsel for the 1st, 2nd, and 3rd Plaintiffs/Counter-Defendants (Shumuk entities):

Claimed the November 2008 agreement superseded the August 2008 one and was implemented by settling some creditors. Lule's and Virani's sales were secret/fraudulent and post-dated theirs. Leases expired in 2011 without renewal for disputed units. No possession taken of Sempebwa's units; Lule's claim is moot as the acts stopped in 2008. No wrongdoing by Shumuk; Katatumba was dishonest in double-selling. No cause against them; the contest is over possession rights.

Counsel for the 1st Defendant/4th Counter-Defendant (Katatumba's Estate):

Admitted Lule's 2006 purchase and payment, with 10 titles delivered and possession given. Unit 61's title was mortgaged and likely redeemed by Shumuk. The estate is ready to transfer to the rightful owner post-appeal in the related suit. Does not contest Lule's title and will execute necessary instruments. Blames Shumuk for frustrations; no damages/costs against the estate.

Legal Representation

For the 1st Counterclaimant: M/s MMAKS Advocates.
For the 2nd Counterclaimant: M/s Kalenge Bwanika Kisubi & Co Advocates.
For the 1st, 2nd, and 3rd Counter-Defendants: M/s Kibuka Musoke & Co. Advocates & Solicitors.
For the 4th Counter-Defendant: M/s Tusasirwe & Co. Advocates.

Court's Findings

I. PRELIMINARY FINDINGS ON THE BURDEN OF PROOF

The Court clarified that in all civil proceedings, the burden of proof lies upon the party asserting a claim. Justice Mubiru held that the counterclaimants bore the obligation to prove each constituent element of their counterclaim.

Accordingly, the Court established that the counterclaimants were required to prove:

The existence of a legal or equitable interest in the condominium units in issue;
A right to title and/or immediate possession;
Unlawful dispossession or occupation by the counter-defendants; and
Resultant damage flowing from such unlawful acts.

II. FINDINGS ON CONDOMINIUM PROPERTY LAW

A. Nature and Legal Effect of Condominium Registration

1. Ownership Structure

The Court observed that condominium ownership under the Condominium Property Act creates a unique proprietary regime distinct from ordinary landholding.

Justice Mubiru held that under a condominium arrangement:

A building is divided into discrete units capable of individual ownership;
The underlying land and common areas are jointly owned by all unit owners;
Individual units are designated for exclusive ownership;
Common property remains indivisible and is owned by unit owners as tenants in common in shares proportionate to their respective unit factors.

The Court noted that hallways, elevators, parking areas, amenities, and structural supports form part of the common property held collectively under a condominium association.

2. Effect on the Parent or Mother Title

The Court clarified the legal effect of condominium registration on the original land title.

Justice Mubiru held that pursuant to section 3(1) of the Condominium Property Act, upon registration of a condominium plan:

Condominium titles are created;
The parent or mother title is closed by the Registrar of Titles;
The original title ceases to exist as an active and transferable title over the land as a single parcel.

The Court observed that although the closed parent title remains preserved in the register for historical reference pursuant to section 3(2), it no longer has operative legal force. The Court reaffirmed that the land does not revert to a former owner upon death or sale in the traditional sense once condominium status subsists.

3. Nature of Individual Unit Titles

The Court established that individual condominium titles derive their legal character from the parent title:

Freehold parent titles generate freehold unit titles;
Leasehold parent titles generate leasehold unit titles subject to the same duration and renewal terms.

Justice Mubiru held that under section 4 of the Condominium Property Act, each unit title enjoys the same legal force as any other land title under the Registration of Titles Act, and is freely transferable by sale, inheritance, or other lawful dealings, subject to existing encumbrances preserved by section 5 of the Act.

4. Ownership Rights of Unit Purchasers

The Court noted that a purchaser of a condominium unit acquires ownership in fee, subject only to restrictive covenants inherent in condominium living. Justice Mubiru held that such ownership includes:

Exclusive title to the defined airspace and physical boundaries of the unit;
An undivided proprietary interest in common areas;
The full right to sell, lease, mortgage, or transmit the unit to heirs.

5. Impossibility of Dealing with the Building as a Single Unit

The Court clarified a critical point of law: until lawful termination of the condominium regime and reconstitution of the parent title, the building cannot be dealt with as a single legal parcel.

Justice Mubiru held that:

“So long as the condominium arrangement subsists, each unit exists as a separate legal entity with its own certificate of title, and the building as a whole ceases to exist as a single saleable interest in law.”

6. Reconstitution of the Parent Title

The Court established that reconstitution of the parent title may occur only upon:

Destruction of the building;
Unanimous agreement of unit owners to terminate the condominium; or
Circumstances rendering the condominium regime impractical or uneconomical.

The Court reaffirmed that such termination requires unanimous participation by unit owners, and that a developer lacks authority to act on their behalf.

III. FINDINGS ON THE 1ST COUNTERCLAIMANT’S PURCHASE (JOSEPH SEMPEBWA)

A. Virani Bahadukali Mohamedalli’s Acquisition

The Court found as a fact that Mr. Virani Bahadukali Mohamedalli lawfully purchased thirteen condominium units from the late Bonney Mwebesa Katatumba and that all were duly registered in his name on 29th July 2009.

Justice Mubiru held, applying section 59 of the Registration of Titles Act, that each certificate of title constituted conclusive evidence of ownership. The Court established that as of that date, Mr. Virani held absolute, unconditional, and exclusive legal title to the thirteen units enumerated in the judgment.

B. Failed Purchase Attempt by the Counter-Defendants

The Court noted that the counter-defendants, through Mr. Mukesh Shukla, failed to honour their offer to purchase the same units and that extensions granted were exhausted. The Court observed that subsequent correspondence demonstrated that Mr. Shukla had been managing the units on behalf of Mr. Virani.

C. Joseph Sempebwa’s Purchase

The Court found as fact that by agreement dated 26th August 2009, the 1st counterclaimant purchased the thirteen units from Mr. Virani, received executed transfer forms and titles, and was contractually entitled to immediate possession. The Court noted that registration was obstructed by a caveat lodged by the counter-defendants.

D. Legal Effect of the Purchase Prior to Registration

Justice Mubiru held that execution of the sale agreement and payment of consideration vested in the purchaser an equitable interest, rendering the seller a trustee of the legal title pending registration. The Court reaffirmed that such equitable interest is enforceable against third parties except a bona fide purchaser for value without notice.

The Court conclusively found that Mr. Sempebwa acquired a proprietary interest enforceable against the counter-defendants.

IV. FINDINGS ON THE 2ND COUNTERCLAIMANT’S PURCHASE (PETER LULE)

The Court established that Mr. Peter Lule lawfully purchased eleven condominium units, paid the full purchase price, and acquired equitable proprietary rights identical in nature to those of the 1st counterclaimant.

Justice Mubiru held that these rights were enforceable against the estate of the late Katatumba and all third parties save for a bona fide purchaser without notice.

The Court noted that attempts by the late Katatumba to repurchase the units failed due to inability to meet the counterclaimant’s price.

V. FINDINGS ON THE COUNTER-DEFENDANTS’ PURCHASES

The Court found that despite having previously sold twenty-seven units, the late Katatumba purported to sell the entire property to the counter-defendants under agreements dated 16th August and 10th November 2008.

Justice Mubiru held that Katatumba only had capacity to sell sixty-five units and unlawfully purported to convey more than he owned.

The Court observed that the counter-defendants were aware of the prior sales and structured their agreements to refund the original purchasers.

VI. FATAL DEFECTS IN THE COUNTER-DEFENDANTS’ AGREEMENTS

A. Non-Existent Subject Matter (Res Extincta)

Justice Mubiru held that the parent title referenced in the agreements had ceased to exist upon registration of the condominium plan. The Court reaffirmed the doctrine of res extincta, holding that a contract founded upon a non-existent subject matter is void ab initio.

B. Nemo Dat Principle

The Court clarified that Katatumba could not convey what he no longer owned. Justice Mubiru held that the attempted resale violated the nemo dat principle and constituted a breach of trust owed to the first purchasers.

C. Absence of Bona Fide Purchase

The Court established that the counter-defendants had actual and constructive notice of the counterclaimants’ interests and therefore could not claim bona fide purchaser status.

Justice Mubiru reaffirmed that prior equitable interests bind subsequent purchasers with notice.

D. Violation of Privity of Contract

The Court noted that the agreements impermissibly sought to bind non-consenting third parties. Justice Mubiru held that such arrangements offend the doctrine of privity and are legally unenforceable against the counterclaimants.

VII. FINDINGS ON LEASE EXPIRATION AND RENEWAL

The Court found that although the leases expired in 2011, renewal was lawfully granted only in respect of sixty-five units still registered in Katatumba’s name. The Court noted allegations of fraudulent renewal affecting some of the counterclaimants’ units.

VIII. EFFECT OF AGREEMENTS ON COUNTERCLAIMANTS’ RIGHTS

Justice Mubiru held that neither agreement of 2008 affected the proprietary rights of the counterclaimants in the twenty-seven units they lawfully purchased. The Court reaffirmed the primacy of their equitable and legal interests.

IX. FINDINGS ON OWNERSHIP

The Court declared both counterclaimants the absolute, unconditional, and exclusive owners of their respective condominium units, holding full title to the defined airspace and physical boundaries thereof.

X. FINDINGS ON REMEDIES

The Court observed that remedies must be tailored to the equities of the case. Justice Mubiru held that restitutionary relief, mesne profits, vacant possession, general damages, interest, and costs were appropriate and justified on the evidence.

HOLDING

The Court entered judgment for the counterclaimants against the 1st, 2nd, and 3rd counter-defendants jointly and severally:

Declarations of Ownership

Joseph Sempebwa declared absolute owner of 13 condominium units (Units 1, 63, 69, 71, 75, 77, 78, 79, 80, 98, 99, 100, and 101)
Peter Lule declared absolute owner of 11 condominium units (Units 52-62)

Specific Orders

For Peter Lule:

Counter-defendants to hand over title deed for Unit 61 forthwith
Kampala District Land Board granted leave to renew all 11 leaseholds in Lule's name
General damages: UGX 50,000,000

For Joseph Sempebwa:

Kampala District Land Board granted leave to renew all 13 leaseholds in Sempebwa's name
Commissioner Land Registration directed to issue title deeds once renewed
Counter-defendants ordered to deliver vacant possession by 23rd March 2026
Mesne profits: US$3,822,000 (for period from 26th August 2009 to judgment date - 196 months at US$19,500/month)
Additional mesne profits: US$58,500 (three months from judgment to vacant possession date)

Interest:

15% per annum on UGX amounts from 8th October 2009 until payment in full
6% per annum on US$ amounts from 8th October 2009 until payment in full

Costs:

Counterclaimants awarded costs of suit and counterclaim
Claim against 4th counter-defendant (Estate of Katatumba) dismissed with no order as to costs

KEY TAKEAWAYS

Condominium Title Finality
Once a condominium plan is registered, the original "parent" title ceases to exist as an active instrument. Any contract purporting to sell the property by reference to the closed parent title is void for lack of valid subject matter.
Seller's Trustee Obligation
A seller who has received full payment holds legal title as trustee for the purchaser until registration. The seller cannot lawfully re-sell the property to another party without first lawfully rescinding the initial contract.
Due Diligence Requirements
Purchasers must conduct reasonable inquiries when provided with information suggesting third-party interests. Describing existing unit owners as "creditors" and listing them with specific unit numbers constitutes constructive notice requiring further investigation.
Equitable Interests Prevail
Purchasers who pay the full price and receive transfer documents acquire equitable interests enforceable against subsequent purchasers who are not bona fide purchasers for value without notice.
Physical Possession as Notice
Physical possession by a prior purchaser serves as constructive notice to subsequent potential purchasers of an existing equitable interest in the property.
Privity of Contract Limitation
Third parties cannot be bound by contractual obligations they never consented to, even if agreements purport to impose obligations on them.
Mesne Profits Calculation
Wrongful possessors are liable for mesne profits based on fair market rental value, calculated at rates that could be obtained with ordinary diligence over the entire period of wrongful possession.

Read the full case