{"id":24349,"date":"2023-03-20T08:28:30","date_gmt":"2023-03-20T08:28:30","guid":{"rendered":"https:\/\/www.usernameproperties.com\/blog\/?p=24349"},"modified":"2023-10-19T08:50:36","modified_gmt":"2023-10-19T08:50:36","slug":"how-to-avoid-scams-when-buying-property-in-kenya-while-in-diaspora","status":"publish","type":"post","link":"https:\/\/www.usernameproperties.com\/blog\/how-to-avoid-scams-when-buying-property-in-kenya-while-in-diaspora\/","title":{"rendered":"How to Avoid Scams When Buying Property in Kenya While in Diaspora."},"content":{"rendered":"\n<p><strong>How to Avoid Scams When Buying Property in Kenya While in Diaspora.<\/strong><\/p>\n\n\n\n<p><strong><em>\u201cIt is common knowledge, and well documented, that the land market in Kenya is a minefield and only a foolhardy investor would purchase land with the alacrity of a potato dealer in Wakulima market.&nbsp;\u201c<\/em><\/strong><\/p>\n\n\n\n<p>These are words of the Court of Appeal Judges in the case of <strong><u>Arthi Highway Developers Limited v West End Butchery Limited &amp; 6 others [2015] eKLR <\/u><\/strong>where the court appreciated the risks of <a href=\"https:\/\/www.usernameproperties.com\/blog\/10-steps-on-how-to-buy-land-in-kenya-by-username-ceo\/\">buying land<\/a> in Kenya and emphasized on the need by a Purchaser to undertake and exercise due diligence before buying the land.<\/p>\n\n\n\n<p>To avoid falling victim to a &#8220;scam&#8221; when investing in land\/property, follow the proper legal procedures. Also, engage the right professionals throughout the entire process.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The Procedure of Land Acquisition in Kenya.<\/h2>\n\n\n\n<ol class=\"wp-block-list\" type=\"i\"><li><strong>Due Diligence<\/strong><\/li><li><strong>Sale Agreement<\/strong><\/li><li><strong>Completion Documents<\/strong><\/li><li><strong>Charges\/Costs related to land transactions<\/strong><\/li><li><strong>Interests under which Land is be Owned in Kenya<\/strong><\/li><\/ol>\n\n\n\n<ol class=\"wp-block-list\" type=\"i\"><li><strong><u>Due Diligence<\/u><\/strong><\/li><\/ol>\n\n\n\n<p>Is the process by which a purchaser investigates the Vendor\u2019s title to determine its validity and inspects the condition of the property to enable the Purchase make an informed decision on whether to proceed with the transaction.<\/p>\n\n\n\n<p>It involves investigation of:<\/p>\n\n\n\n<ol class=\"wp-block-list\" type=\"1\"><li>the Vendor\u2019s title to the property (or interest) to ensure that the Vendor has a good title to the property<\/li><li>the extent of any legal rights, restrictions, caveats and encumbrances on the property.<\/li><li>Whether any third-party consents is required.  e.g, spousal consent, Land Control Board Consent e.t.c.<\/li><li>any other legal liabilities or obligations resulting from the purchase (eg VAT, stamp duty land tax liability and Land Registry fees)<\/li><\/ol>\n\n\n\n<p>It is the duty of the Purchaser in the contract of sale of land to conduct due diligence and inform and inform herself on all the relevant aspects concerning the property he seeks to purchase.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">To undertake extensive due diligence, it is advisable to conduct the following:<\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong><u>Official Search:<\/u><\/strong> This is done by the registrar at your request. The registrar then issues you with a search certificate containing the ownership details, whether there are any caveats, restrictions, e.t.c;<\/li><li><strong><u>Personal Search:<\/u><\/strong> You visit the land registry and carry out an inspection of the documents\/parcel file to confirm that the entries on the title\/register are supported by requisite documents.<\/li><li><strong><u>Search at Survey Office:<\/u><\/strong> Every land registration district has a survey office. The survey office maintains a registry index map which determines the boundaries, acreage and confirms that the property is actually registered. Registration of land starts from Survey department since it issues L.R numbers.<\/li><li><strong><u>Physical Inspection of the property:<\/u><\/strong> This assists in confirming who is in possession\/occupation of the land, boundaries.<\/li><li><strong><u>Due diligence on the identity of the Vendor.<\/u><\/strong> Where the vendor is a natural person, a copy of Identity Card and K.R.A PIN Certificate would be sufficient. KRA Itax Website provides for PIN Checker from which you can validate the PIN and the I.D Card.<\/li><li>If the Vendor is a company, a copy of the Certificate of Incorporation and CR12 (list of directors) is sufficient. Always confirm these documents by conducting a search at the company\u2019s registry.<\/li><\/ul>\n\n\n\n<p>In addition to legal due diligence, the Purchaser may require the following professionals to carry out due diligence:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>valuers to advise on the value of the property;<\/li><li>surveyor to advise on the boundaries and size of the property;<\/li><li>physical planner to advise on likelihood of success of a proposed planning\/development application.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><u>ii.Sale Agreement &amp; Transfer<\/u><\/strong><\/h3>\n\n\n\n<p>You must write any land sale contract or land disposition for it to be valid.Section 38 of the Land Act 2012 as well as Section 3 of the Law of Contract Act provide that for an agreement to buy land to be enforceable in court, it ought to be in writing and signed by each party with witnesses attesting to the signatures. This means that if you enter into an oral agreement to buy or sell land, the courts would not recognize the agreement as having taken place in the event there are any disputes.<\/p>\n\n\n\n<p>Moreover, Section 35 of the Advocates Act mandates advocates to draft any document involving land disposition. Moreover, parties must sign, with their signatures attested by a qualified person. Both the Law of Contract Act and Land Act define a qualified person for attestation as an advocate, magistrate, judge or deputy registrar.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\">Contents of the agreement for sale:<\/h5>\n\n\n\n<ol class=\"wp-block-list\" type=\"a\"><li>Identity of the parties- including the names, identity card\/passport numbers and the address. If possible, include even an email address.<\/li><li>Identity of the property being sold. Identity of the property should include legal description i.e land reference, plot number. Also includes physical description, including the location and condition of the property e.g vacant or in possession.<\/li><li>General conditions: Apply or is implied to a contract by application of the law unless stated otherwise.  These include LSK conditions for sale. They govern the parties&#8217; rights to receive deposits, charge interest, or forfeit deposits when granting possession to the purchaser.<\/li><li>Special conditions: these are the terms that are specific to the particular transaction. E.g who is to obtain the consent, pay stamp duty, legal fees and completion period.<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Completion Documents<\/strong><\/h3>\n\n\n\n<p>The seller holds these documents and hands them to the buyer in exchange for the payment of the balance. This allows the purchaser to transfer ownership of the land\/property to themselves.<\/p>\n\n\n\n<p>Completion documents vary depending on the tenure of the property. The most basic &amp; common completion documents include:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Original Title Deed\/Certificate of Title\/Lease\/Conveyance<\/li><li>Executed transfer of interest in land\/indenture of conveyance<\/li><li>The Land Control Board application for Consent to<\/li><li>Land Control Board Consent to Transfer<\/li><li>&nbsp;Head Lessors\/Manager\u2019s Consent (where the property is sub-lease e.g apartments)<\/li><li>Spousal Consent<\/li><li>Identification documents such as National Identity Cards, KRA PIN Certificates and coloured passport size photographs<\/li><li>For newly completed properties, certificates such as Certificate of Practical Completion and\/or Certificate of Occupation.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><u>i.v Charges\/Costs incidental to acquisition of land<\/u><\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Stamp Duty:<\/li><\/ul>\n\n\n\n<p>The Stamp Duty Act, Cap 480, levies a tax on various transactions, including stock, shares, or property transfers.<\/p>\n\n\n\n<p>The rate of stamp duty on transfer of immovable property varies depending on the location of the property.<\/p>\n\n\n\n<p>Rural areas attract a stamp duty of 2% of the value of the land while urban areas attract a duty at the rate of 4% of the value of the land.<\/p>\n\n\n\n<p>It is the buyer\u2019s responsibility to pay the stamp duty on transfer of immovable property.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Rates &amp; Rates Clearance Certificate:<\/li><\/ul>\n\n\n\n<p>Furthermore, the Valuation for Rating Act, Cap 266, empowers all County Governments authorities established under the County Governments Act to levy rates on land within their municipalities\/towns\/jurisdictions.<\/p>\n\n\n\n<p>To deal with land in municipalities or towns, you need a Rates Clearance Certificate issued after paying the Rates.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>&nbsp;<strong><u>Land Rent<\/u><\/strong><\/li><\/ul>\n\n\n\n<p>In leasehold tenure, you must pay annual rent to the government. Moreover, after payment, apply for and receive a Land Rent Clearance Certificate.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><u>Interests under which Land can be Owned in Kenya<\/u><\/strong><\/h3>\n\n\n\n<p>Article 40 of the Constitution guarantees the right of every individual to acquire and own land in Kenya, either individually or in association with others. <\/p>\n\n\n\n<p>However, authorities do not grant this right to properties proven to have unlawful acquisition. In this regard, Kenyan citizens can own land of any description anywhere in Kenya.<br><\/p>\n\n\n\n<p>Moreover, the Constitution allows the deprivation of their land rights or interests only under exceptional circumstances, such as compulsory acquisition.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Rights and interests is divided into two classes: freehold and leasehold.<\/h4>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Free-hold Interest.<\/strong><\/li><\/ul>\n\n\n\n<p>In simple terms, a freehold is an interest that a person can hold for their lifetime. \u00a0It is an interest which on the death of the owner, can descend to the heirs and the estate may continue forever.\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Lease-hold Interest.<\/strong><\/li><\/ul>\n\n\n\n<p>Leasehold interest grants a fixed-term, unlike freehold interest. The terms can be 50 years, 99 years, 999 years or a period otherwise stated in the title document.\u00a0The common thread that runs through the terms is that a leasehold interest in land is an interest for exclusive possession and profit of land for a fixed period and usually in consideration of payment or rent.<\/p>\n\n\n\n<p>On expiry of a leasehold term, the property reverts to the government. Leasehold title proprietors must ensure they adhere to the land-holding conditions and apply for renewal when necessary. The process of application for renewal should commence at least two to three years before the term expires.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><strong><u>Foreigners and Interests in Land<\/u><\/strong><\/h5>\n\n\n\n<p>While the Constitution grants all persons the right to own land in Kenya, Article 65 states that foreigners can hold land in Kenya only under a leasehold tenure. Such a leasehold tenure cannot exceed a 99-year term. However, when the leasehold term expires, the tenant may seek to renew the lease.<\/p>\n\n\n\n<p>The authorities treat any document claiming to grant a foreigner an interest in land exceeding a 99-year lease as a 99-year lease.This means that foreigners can purchase freehold land and leasehold land for more than 99 years. Even so, the Constitution&#8217;s provisions imply that it confers a 99-year leasehold interest solely on the foreigner.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Avoid scams when buying property in Kenya by following the right legal steps and engage the right professional when making a purchase. <\/p>\n","protected":false},"author":2,"featured_media":24350,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[8],"tags":[306,307,309,308,310],"class_list":["post-24349","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estates","tag-avoid-scams","tag-avoid-scams-in-kenya","tag-avoid-scams-in-kisumu","tag-avoid-scams-in-mombasa","tag-avoid-scams-in-nakuru"],"rttpg_featured_image_url":{"full":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams.jpeg",612,408,false],"landscape":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams.jpeg",612,408,false],"portraits":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams.jpeg",612,408,false],"thumbnail":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams-150x150.jpeg",150,150,true],"medium":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams-300x200.jpeg",300,200,true],"large":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams.jpeg",612,408,false],"1536x1536":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams.jpeg",612,408,false],"2048x2048":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams.jpeg",612,408,false],"bizberg_medium":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams-300x300.jpeg",300,300,true],"bizberg_gallery":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams-500x400.jpeg",500,400,true],"bizberg_blog_list":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams-368x240.jpeg",368,240,true],"bizberg_detail_image":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams-612x400.jpeg",612,400,true],"bizberg_detail_image_no_sidebar":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams-612x400.jpeg",612,400,true],"bizberg_portfolio_homepage":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams-600x400.jpeg",600,400,true],"bizberg_blog_list_no_sidebar_1":["https:\/\/www.usernameproperties.com\/blog\/wp-content\/uploads\/2023\/03\/Avoid-Scams-220x190.jpeg",220,190,true]},"rttpg_author":{"display_name":"username","author_link":"https:\/\/www.usernameproperties.com\/blog\/author\/username\/"},"rttpg_comment":0,"rttpg_category":"<a href=\"https:\/\/www.usernameproperties.com\/blog\/real-estates\/\" rel=\"category tag\">Real Estates<\/a>","rttpg_excerpt":"Avoid scams when buying property in Kenya by following the right legal steps and engage the right professional when making a purchase.","_links":{"self":[{"href":"https:\/\/www.usernameproperties.com\/blog\/wp-json\/wp\/v2\/posts\/24349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.usernameproperties.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.usernameproperties.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.usernameproperties.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.usernameproperties.com\/blog\/wp-json\/wp\/v2\/comments?post=24349"}],"version-history":[{"count":0,"href":"https:\/\/www.usernameproperties.com\/blog\/wp-json\/wp\/v2\/posts\/24349\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.usernameproperties.com\/blog\/wp-json\/wp\/v2\/media\/24350"}],"wp:attachment":[{"href":"https:\/\/www.usernameproperties.com\/blog\/wp-json\/wp\/v2\/media?parent=24349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.usernameproperties.com\/blog\/wp-json\/wp\/v2\/categories?post=24349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.usernameproperties.com\/blog\/wp-json\/wp\/v2\/tags?post=24349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}