10 Legal Steps for Land Acquisition in Kenya

Google+ Pinterest LinkedIn Tumblr +

Do you desire to own a piece of land in Kenya? Do you know the process of land acquisition?

If you do, you are among the few. However, a majority of Kenyans do not know where to get started when buying land.

Unfortunately, this has led many Kenyans to lose their money to unscrupulous land sellers.

This article is going to guide you on the 10 steps you need to take when buying land in Kenya.

1) Land identification

This is the first step you will make when buying land. You will need to identify a piece of land you want based on your needs, budget, and preference. 

2) Searches and inspection of the title

Once you have identified the land, you need to do a land search with the Ministry of Land. These days the process has been digitized, and you can search on the e-citizen platform.

Through the land search, you should be able to verify the title number of the land, the owner of the land, their ID, how many transfers have taken place with the piece of land, if it has a loan on it if it has a court case or any other caveats on the land.

It is important to note that you can do the land search by yourself, or involve the services of a lawyer. However, it is always best to involve the services of a lawyer.

If you will be doing a physical search at the Land Registry, you will need to carry a copy of your identification document, a copy of your KRA pin certificate, and a four-page copy of the land title deed.

Then you will fill a search request form. In most county land offices, it will not take more than three working days.

3) Preparation of offers and price negotiation

After doing your land search and you find the land is clean, and then you can go ahead and prepare offers and price negotiations.

This is best done by your lawyer. They are supposed to prepare a letter of offer or intent showing the details of the seller and purchaser, the description of the land on offer, the proposed purchase price and means of payment.

4) Sale agreement and deposit payment

Once your lawyer has made an offer, and the seller agrees, the seller then prepares a purchase and sale agreement, which is a contract for the sale of land. It is done only if the seller accepts the buyer’s offer. 

Through the agreement, the seller accepts not to sell the property to someone else during the term of the purchase and sale agreement. 

To make it binding, the buyer has to place a deposit on the land.

5) Payment of land rates

Land rates are levies charged on leasehold land. In Kenya, it is paid at the end of every financial year, in June, to the county government.

When buying land, ensure that the land you intend to buy does not have any outstanding land rates. If it land has any unpaid land rate, make sure the seller clears it before completing the transaction.

6) Transfer documents and consent to the transfer

At this stage, the lawyer of the seller is supposed to prepare transfer documents and consent to transfer.

These documents will be executed by the lawyer of the buyer and the seller when the consent to transfer has been approved by the commissioner of lands. 

7) Valuation

A mandatory valuation report has to be prepared by the government valuer.

They have to make a site visit to ascertain the true market value of the land as of the date of transfer. 

The process is meant for stamp duty purposes.

8) Payment of Stamp Duty

Stamp duty is a tax which is levied when transferring property and is collected by the KRA. In Kenya, the stamp duty rate is 2% for agricultural land and 4% for land in the county government. 

The payment of stamp duty is done after the valuation report has been presented at the Land office. 

Your lawyer will collect the quadruplicate stamp duty forms their and make payments on your behalf. 

Your lawyer will keep the original white copy, the yellow copy will remain in the bank, the green copy is filed with the registrar of titles and lands, and the blue duplicate is forwarded to the Commissioner of Domestic Taxes by the bank.

9) Registration of transfer

All the stamped transfer documents are then submitted for registration at the Lands Office. The seller’s lawyer is required to present

i)The original certificate of title in the sellers’ name

ii)Duly completed transfer forms in triplicate (they must have a seal if a company is selling)

iii)3 Passport Photos of the seller if it is an individual. In case, it is a company, then 3 passport photos for 2 directors of the company 

iv)Copy of KRA pin of the seller

v) Copy of National ID of the seller. If it is a company, copies of National IDs for 2 directors who will sign the transfer form.

vi)Copy of the certificate of registration if it is a company

vii) PIN Certificate of Company

viii) Land rate clearance certificate (if the tenancy of the land is leasehold)

ix) Rent clearance certificate (if the tenancy of the land is leasehold)

x) Land control board license.

These documents will give a go-ahead for the transfer of land to the buyer.

10) Exchange of documents

Once the registration of transfer is complete, there is the issuance of a new Title deed (for freehold tenancy) or Certificate of Lease (Leasehold tenancy).

The buyer is then obligated to finalize payment of the land through their lawyer. Once they complete payment, the buyer’s lawyer can collect the Title Deed at the Lands Office.

Conclusion

If you are buying land, always do due diligence to ensure everything is above board.

Finally, make sure you engage a reputable lawyer who will represent you throughout the whole process.

Share.

About Author

Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

Leave A Reply