10 Legal Steps on How to Buy Land in Kenya By Username Investments CEO
Owning land is the desire of each and every person. Username Investment Ltd CEO helps us with an easy guide on how to buy land in Kenya. The process applies to the people residing in Kenya and those in the diaspora.
In June 2017, the Lands Ministry was grappling with 7,052 cases of property fraud. A year later, this number is expected to rise again. However, prospective land buyers can significantly reduce this by conducting due diligence on a potential investment at hand before making any financial commitment.
Due diligence may seem like a tedious process for some people but it is an important part of the land transaction process to ensure you are investing in genuine property.
Below is a checklist of the things one needs to consider before buying land in Kenya.
1. Background research of the property vendor
So let’s start off with the most basic items in your to-do list on how to buy land in Kenya. And the process starts with a background check of the land property in question.
Engage a real estate company that has a solid portfolio of the projects they have offered in the past. This includes the number of projects they have done and the title deeds they have issued.
Have a draft of the information you require such as the project location, size, and price you can easily identify them as you go through the social media pages and websites.
Be keen to identify any inconsistency in details that may raise a red flag.
Testimonials and reviews from other investors who have experience with the investment company. This will give you first-hand information on what to expect in your investment journey with the vendor. If there is a clear indication of frustration due to unfulfilled promises do not commit your money to such an investment.
After you are satisfied with the background search of the company you can go ahead to contact the investment company and express interest to purchase the land.
When purchasing a property from a company, it is essential to have copies of the company’s PIN certificate, Certificate of Incorporation, and copies of PIN Certificates and IDs of the company’s Board of Directors.
2. Examine the land property
Any potential investor should physically visit any property on sale and experience first-hand on-ground information. This is possible during property site visits and Open Days.
This is an opportunity for a potential investor to see the exact physical location, view the plots, the beacons, the value additions such as the fence, gate, water, road networks, and electricity connection.
Avoid anyone selling land in Kenya without willing to show it to you.
3. Conduct a Title Deed Search at the Lands Ministry
The details of every property in Kenya are in the Lands Registry which can be done through Ecitizen. Conducting a title deed search is free of charge. You visit the Registry fill in a search form, attach copies of your KRA PIN, ID, and a copy of the title deed you are conducting a search on.
This process takes a single working day and it will establish the true landowners and whether they have all the necessary rights to transfer ownership of the property to you.
It also indicates whether the title deed has a caveat placed for various reasons such as security for a loan or if the Court of Law has barred the sale of the property you are interested in.
4. Engage a Lawyer and ensure you sign the legal documents
Land purchase is a legal process that needs to be overseen by a lawyer. It is important to have a lawyer present when you are signing the land purchase documents. The documents include a letter of offer, sale agreement, and title transfer documents.
A sale agreement fully protects the rights and interests of the buyer and the seller because if one party fails to adhere to the contract the other party can take legal action to recover the damages caused. It also states the terms and conditions of the sale.
A title transfer is the legal proof of transfer of the title deed from the seller to the buyer and can be used when tracing the history of a property in the Lands Registry.
5. Laws and Regulations
This is an important step in how to buy land in Kenya and we have seen many land investors make poor decisions here.
National and county rules regulate the building, construction, and development of real estate properties. Do these laws allow you to put up certain structures in the future? If you are buying agricultural land and intend to put up residential apartments, you will need to apply for a change of user approval.
Real estate companies that provide legal advice in and around their projects are the best choice when it comes to land investment. It is important to engage a lawyer and ask any questions regarding the land that may affect your future interests in the property
6. Confirm property boundaries
Buy land that has been thoroughly surveyed and demarcated. Know where your land starts and ends to prevent any confrontations. Have the exact measures whether it is an eighth, quarter, half an acre, or an acre, and ensure it is well beaconed and the plot numbers are visible.
Genuine Real Estate companies have registered surveyors who you can meet and ask questions about property sizes. You can also visit a local surveyor who can issue a survey map of the area and help you identify the exact location and the sizes.
There are increased cases where developers are selling properties on riparian land. The Kenyan laws define riparian land as being a minimum of 6 meters and up to a maximum of 30 meters on either side of a riverbank from the highest watermark.
This land is public land and cannot be sold to anyone. A survey map will help you identify the existence of any rivers next to your potential investment.
We found this step as the most overlooked step and qualify to be listed in our guide on how to buy land in Kenya so that new landowners understand the importance of it.
7. Familiarize Yourself with the location in where you want to buy the land.
There are areas that everyone is preferring purchasing land due to the high appreciation rates. When making a decision to invest in an area ensure you gather all the information regarding the upcoming investment opportunities in Kenya in the long run.
This will ensure your investment is assured of the expected returns. Compare the prices of land in the area of your interest because you may find different property companies offering the same size of properties in the same area but with different prices.
A comparison will help you avoid purchasing an overpriced property whereas you can get a more strategic property at a fair price.
8. Government fees
There are various charges associated with land purchase such as payment of stamp duty and transfer fees. It is important to ensure you are aware of all the fees required to ensure you have a smooth purchase process.
Real estate companies that offer all-inclusive prices are better off as they will save you the stress of having to dig deeper into your pocket to pay off any unforeseen charges.
9. Physical location of the Investment company offices
As mentioned earlier, the land purchase process involves a lot of documentation and it is important to know the exact location of the real estate company you are investing with. This will eliminate the risk of purchasing a property from imposters who may be out to con you.
For instance, With username Investment ltd it has its head office in Le’ Marc Plaza in Wetlands and their employee works from here.
Identifying the exact location for easier follow-up of the documentation process will ultimately ensure legal adherence to the land purchase process. You will also get the opportunity to interact with the staff members of your investment company, get your questions answered and this will give you peace of mind knowing your investment is safe.
10. Tenure of Land
A lawyer will help you to know the tenancy of the property you are interested in purchasing. A freehold title deed gives you absolute ownership of land, while a leasehold title deed is owned for a specific period of time and requires renewal upon expiry, normally 99 years for non-Kenyan Citizens.
For a leasehold title deed, ensure you receive Land Rates Clearance Certificate to ensure there are no pending land rates and if there are any pending land rates, ensure they are paid for by the land seller.
In conclusion, ensure you receive your title deed and retain copies of the letter of offer, sale agreement, and title transfer. The title deed is the ultimate proof of property ownership. After receiving your title deed, conduct yet another search to ascertain that the details on your title deed match with the records at the Lands Registry. There are Kenyans who are living in the diaspora and have invested back home, upon completion of payment ensure the title deed is sent to you via a courier service of your choice.
This brings us to the end of our guide on how to buy land in Kenya, how this helps you in utilizing investment opportunities in Kenya.