Real Estate in Kenya: Buying/Selling Laws and Procedures

However, a process that should be straightforward as it is guided by comprehensive property and land laws, buying and selling real estate in Kenya is far from straightforward. Instead, buyers have to deal with slow documentation processes that are marred by corruption, where buyers have to know the right people or have to offer bribes to speed up processes.

All hope is not lost, with the extensive implementation of new reforms like the new land reform, buying and selling property in Kenya will improve and existing laws will be enforced to the letter.

To ensure you comply with Kenyan laws governing real estate transactions and to avoid pitfalls such as being scammed, it is recommended that you seek legal representation when buying or selling property in the country.

Property registration

In Kenya, land is registered under:

  • The Land Law

  • National Land Commission

  • Land Registration Law; offering registration in all districts

Land Control Law

  • Formulated under the Land Control Act, land control boards are prohibited by law from granting consent to transfer agricultural land to companies and individuals who are not eligible to own it.

Foreign and local real estate investment in Kenya: the process

Under the new Constitution, non-citizens and companies with non-citizen shareholders are prohibited from owning freehold property. The law allows them to own property on lease for a period not to exceed 99 years.

  • Both local and foreign real estate investors are allowed by law to purchase residential and commercial real estate located in towns and municipalities without any restrictions, as long as they adhere to established legal procedures.

  • However, foreigners and private companies with shareholders who are not Kenyan citizens are prohibited by law from purchasing agricultural land, except where such purchase is exempted by the provisions of the Land Control Act, SEC 24.

property identification

Once an investor has searched for and identified a suitable property, they should endeavor to visit and evaluate the real estate to ensure that:

  • actually exists

  • It meets their needs and expectations, such as physical location and access to infrastructure.

  • Its conditions are favorable and it is worth investing

Note: A viewing fee applies when viewing properties for sale. Rates vary by type and size.

Carrying out the necessary search

A lawyer or the buyer must then obtain copies of the seller’s National Identity Card and title deed and carry out the required searches at the land office and the People’s Registry Office.

  • This step is very important to verify that said owner is truly the owner of the property.

  • To perform the search, you are required by law to submit a copy of the title deed and a search request form and submit them to the registry.

  • The requirements search charges are Ksh500.

  • The cadastre obtains the results in 2-3 days.

Search results should show

  • The registered owner of the property

  • property size

  • Any pending matters registered against the property, such as court orders, warnings and bans, etc.

In addition, it is important:

  • Check whether the property is illegally or irregularly acquired as contained in the Ndung’u Land Report submitted by the Commission of Inquiry on Illegal and Irregular Allocated Lands.

  • Provide a registered surveyor to not only set up the property beacons, but also to verify the land at the Survey Office.

Negotiation and sale agreement

Satisfactory preliminary checks must be followed by negotiations on the terms of sale between the buyer and the seller with the presence of their respective legal teams.

  • Negotiations involve discussions about the price of the property and the terms of payment.

  • 10% of the total amount is paid in advance as a down payment and the balance is paid when the sales transaction is completed.

  • The agreement of the terms by both parties establishes the basis for the preparation of a sales agreement by the seller’s attorney, who then seeks the seller’s approval.

A sales contract contains

  • Terms of sale

  • purchase price

  • Payment conditions

  • Payment End Period

  • Termination documents that facilitate the transfer of ownership

  • The law firm’s terms of sale are often included

When both parties accept the sales agreement, they execute it with the buyer’s signature first and then the seller’s. Finally the money changes hands.

  • A stamp duty of Ksh 200 is then collected from the land office, as required by law, to ensure that in the event of a dispute, the signed documents are admissible in court.

Transfer of ownership of property and stamp duty

Once the buyer’s attorney has prepared the transfer, both parties approve and sign.

  1. The seller is responsible for acquiring all the necessary documents to register the property to the buyer.

  2. The buyer is then responsible for stamp duty payable to the Kenya Revenue Authority in accordance with the Laws of Kenya Stamp Act Chapter 480.

  3. Prior to tax assessment, the seller must request an appraisal of the property by submitting the signed appraisal form for stamp duty and the transfer of ownership form to the Land Office.

  4. A stamp duty return, assessment and proof of payment is then completed at the Land Office.

Once the stamp duty is obtained and the transfer process is complete, the transfer documentation is required by law along with the following documents to be filed for the record:

  • original title deeds

  • stamp duty return

  • Evaluation form and entrance ticket

  • Land tax settlement certificates

  • transfer consents

  • Valuation form for stamp duty

Property registration: the final stage of the transfer of property

When the buyer obtains the transfer of the registered property, the law advises to verify the registration of the same by carrying out a property registry.

permission to develop

In case the property owner intends to develop the purchased property, they must go to the relevant local authority and obtain the required development authorization.

Often the owner will be required to:

  • Commission an environmental impact assessment report to determine whether the planned development has adverse environmental effects

  • Obtain an environmental license from the environmental agency-NEMA.

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