BUYING PROPERTY IN KENYA

Are you buying property in Kenya? Here’s what you need to know;

• Freehold property- This gives the owner of the title absolute ownership of the property and does not attract ground rent.

• Leasehold property- This confers to the owner a limited period of time to own the property which can be extended. The Kenyan constitution only allows leases of 99 years to non-citizen

Buying Property in Kenya should be relatively straight forward. However, there are pitfalls and we would always recommend that you instruct the services of a reputable advocate in order to receive appropriate legal advice and representation throughout the sales process.

9 Legal Steps For Buying Land In Kenya

Everyone hopes to own a piece of land somewhere. It’s the most valuable fixed asset that you could possibly own today. However, if you are planning to buy a piece of land anywhere in Kenya, there are certain important procedures which you should follow. Here are legal steps to purchase land in Kenya:

1. CONDUCT LEGAL DUE DILIGENCE

At this stage, it’s important to identify a lawyer you would like to work with who will help you with the following stages of the transaction

Conduct a search

Why do you need to conduct a Search?

1. To ascertain the ownership of the property
2. To check the property for any encumbrances
3. To check for any land rates that may have accrued.

If it’s a company or land buying company, obtain the CR12 from the Registrar of Companies to ascertain that;

1. The company is still in existence.
2. Who are the directors of the company?

You may further want to do a case search on the Kenya Law website to ascertain that the company/Housing Sacco has not been sued by other buyers for similar transactions. It may be useful to visit the company offices or contract someone to do the same on your behalf.

A search is done at the Ministry of Lands registry and takes 1-3 days.

Further to this one may decide to further undertake;

1. A mother title search to authenticate the Validity of the title.
2. Get clearance letters from the various goverment agencies tasked with managing our road networks ie KeNHA, KeRRA and KURA.

• Get clearance letters from the relevant utilities provides eg KPLC for way leaves.

1. A Ndungu Land Report search.
2. Obtaining a Land Survey Plan

A land survey plan is a specialized map of a parcel of land. It determines and delineates boundary locations, building locations and physical features .The plans are issued by the Ministry of lands and Physical Planning through the Department of Survey.

3. Preparation of offers and price negotiation

Once the buyer is satisfied with the search results as presented by their advocates from the lands registry and the company registry, then they will okay their advocate to prepare an offer. The advocate involved should prepare a letter of offer or intent showing the details of the seller and purchaser, the description of the property on offer, and the proposed purchase price and modes of payment.

4. Sale agreement and deposit payment

Once you all agree that’s the buyer and the seller there is a need to ensure that the offer has both the terms and conditions included. It is normally drafted by the seller’s advocate and presented to the buyer’s advocate for approval.  Upon the execution of the sales agreement, the agreed deposit is paid by the purchaser through their advocate to the seller’s advocate’s account.

5. Obtain the Land Clearance Certificate and Land Rent Certificates

Depending on the land tenure regime, the land rates and rent if unpaid will need to be paid so that you can obtain the Clearance Certificates.

6. Transfer documents and consent to transfer

The seller’s advocate prepares transfer documents that will be executed by both the buyer and the seller. The transfer documents will only be executed after consent to transfer has been issued by the commissioner of lands.

7. Valuation

For purposes of stamp duty, an application for valuation is always made to the government valuer, who makes a site visit to enable him or her to prepare the requisite valuation report. Stamp duty is important as it is used in registering the property.

The payable duty is determined by a government valuer and the valuation is done to determine the true value of the land on the open market as at the date of transfer.
The intention is to gauge the value declared in the instruments presented for registration for purposes of ascertaining whether the value declared in the instruments will be raised or not.

8. Payment of Stamp Duty

It is the responsibility of the buyer to pay the stamp duty, a tax levied on all property transactions.

9. Registration of transfer

Once the registration process is complete, the legal ownership of the land shall have legally changed hands.

10. Exchange of documents

Upon receipt of the complete documents from the seller, the buyer is obligated, in exchange of the documents, to pay to the seller the outstanding balance pending through his advocates to finalize the registration of the documents after paying the requisite stamp duty.

Authored by Henry Njuguna Adv, MCIArb

We at NKN will gladly help through this process. Reach out on 0722382783.