Land Blog (3)
Land buying should be as easy as our 1, 2, 3’s but unfortunately, that may not be the case if you don’t know what to watch out for and what to consider when buying your prime plot.
The Procedure of buying and transferring the Interests of a piece of Land in Kenya is as below:
1. Identify the piece of land that you wish to purchase. Ensure that the beacons of the land are cleared marked and it is absolutely clear to you where the boundaries are.
2. Perform an official search of the piece of land at the District Lands Office or the Ministry of Lands (Ardhi House) depending on whether the Title Deed of the subject land is registered under the Land Registration Act (LRA) or Registration of Titles Act (RTA) respectively. If the LRA, the search can be only be done at the District Office and if its RTA, it can be done at the District Office or at Ardhi House. To Perform the Official Search, you will need a copy of the title deed of the land and you must fill the search application form and attaché the title.
In some District Land Offices, copies of your ID and Pin Certificate are required. You shall be required to pay Kshs 100 fee for the process. A search should ideally confirm that:
a. The person selling the land to you is the legal owner.
b. The land has no encumbrances that may include a charge by the bank, a caveat restricting sale of the land amongst other issues.
If all the above is positive, then proceed to the next stage.
3. In cases where the land is registered under Registration of Titles Act (RTA), Obtain Rates Clearance Certificate from the Local Municipal Council and Land Rent Clearance Certificate from the Commissioner of Lands. Seller’s lawyer ordinarily obtain the Rates Clearance Certificate from the Local Municipal Council and costs KES 2500.
4. Your Lawyer can proceed and prepare a sales agreement in liaison with the seller’s lawyer. An agreed upon deposit can then be paid to the Vendor.
5. The Vendor is thus obligated to prepare all the completion documents to ensure a smooth transfer. The Completion documents will include:
a. Original Title in the name of the Vendor
b. Duly executed transfer forms in triplicate (must be sealed if a company is selling)
c. 3 Passport Photos of the Vendor if it’s an individual and if a company, then 3 photos each of 2 directors of the company
d. Copy of Pin Number of the Vendor
e. Copy of National ID of the Vendor and if a company copies of National IDs for 2 directors who’ll sign the transfer forms.
f. Copy of the registration Certificate if it’s a company.
g. PIN Certificate of Company
h. Rates Clearance Certificate (In Case the tenancy of the land is leasehold)
i. Rent Clearance Certificate (In Case the tenancy of the land is leasehold)
6. Pay the remaining balance in exchange of the Completion documents. Your lawyer should confirm that the documents are authentic and must certify the documents before presentation to the relevant Lands Registration Office
7. File the draft transfer (i.e. completion documents) at the Lands Office for assessment of stamp duty payable on the transfer. Other than the aforementioned documents, the buyer must attach his copy of ID, passport photos and copy of PIN. If the buyer is a registered company, then the copies of IDs, passport photos and personal PIN of 2 directors must be attached. In addition the PIN Certificate of the Company.
8. Once the draft duly executed transfer form has been filed at the land office, an inspector visits the site to verify the development and state of the property. Due to lack of transport, in practice, the inspector often has to be picked up in person and driven to the site. There are no prior appointments made and the actual inspection may happen within one day or, in the worst case, one month. However, note that this time is not limited and in some cases entrepreneurs may wait months for a valuation.
9. Payment of Stamp Duty is then done. The fees are 2% or 4% of the Value of the land depending on whether the land is within or outside the Local Municipality. The Value of the land used to calculate the stamp duty is given by the government valuer which may not necessarily be the same as the purchase value. Stamp duty is paid by depositing the amount in an account provided by the Land’s registry office. It is mandatory to pay the stamp duty using the above mode.
10. The registration is done with issuance of a new Title deed (for freehold tenancy) or Certificate of Lease (Leasehold tenancy). The buyer’s lawyer or the buyer then collects the Title Deed at the Lands Office.
Other necessary Procedures
1. The purchaser must have been showed the beacons of the Property in question.
2. The Purchaser is advised to use a Land’s Surveyor to ascertain that the Property in Question is the Physical one he/she has been shown
During this period of which we have been selling property, one thing that has come out very clearly is that the process of purchasing land and ultimately building and actually living in it takes time and money.