1.0 Introduction

Article 40 of the Constitution of Kenya, provides for the right of every person to acquire and own land of any description in any part of the country. Whereas, Kenyan citizens can own land in perpetuity under the freehold tenure, foreigners can only own land for a renewable leasehold term of 99 years. Bearing in mind that land fraud has become an extremely prevalent malpractice with the Kenyan real estate sector, any person keen to buy a parcel of land, apartment or a mansion, ought to undertake extensive due diligence to confirm the authenticity of the title so as to avoid getting defrauded. In light of the foregoing, F.M Muteti & Company Advocates summarize as hereunder the key legal process of buying land in Kenya.

2. Legal Process of Buying Land in Kenya

2.1 Conducting Official Search Before Buying Land in Kenya

The initial step before buying land in Nairobi is conducting of an official search at the Land Registry where the land is situated. The purpose of this search is to identify the registered owner of the identified land, the size of the land as well as any encumbrances attached to the land. The results are normally out within 2-3 working days.

2.2 Confirmation of Unpaid Land Rates

Thereafter, one conducts a search at the county office where the identified land is located to ensure that there are no unpaid land rates attached to the land. In the event that there are unpaid land rates, the vendor should cover those costs. The fees attached to this search vary from county to county.

• The Land Map

The next step shall be to acquire at least two land maps of the identified land. These can be acquired from the Land Registry or a local surveyor. One of the maps should be drawn to scale, so as to show the exact measurements of the land or mutations made to the land. While the other, should give an overview if the identified land together with its adjacent plots.

• Land Verification: The Site Visit

The purchaser should do a site visit upon the identified land, accompanied by the vendor and a surveyor, preferably the one who prepared the initially mentioned land maps. The purchaser shall verify the land as it appears in the maps, and should erect beacons to prevent any future misunderstandings or boundary disputes. Ideally, while in contrast, the latent defects on the property can be identified through the official search, patent defects are pointed out through the site visit.

• The Sale Agreement

Based on the provisions of Section 3 of the Law of Contract Act, the Purchaser and the Vendor should enter into an Agreement for Sale in respect of the property with the assistance of their lawyers. The Sale Agreement sets out the terms of sale, including but not limited to; the purchase price, mode of payment, payment plan, the completion period, and the documents to be furnished by the vendor to enable registration of the transfer of property.

• Land Control Board (LCB) Clearance

In the event that, the property is categorized as agricultural land as under the provisions of the Land Control Act, a consent from the Land Control Board shall be mandatory.

• Valuation of Payment of Stamp Duty

Upon undertaking all the foregoing procedures of buying land in Kenya, the purchaser shall apply for the valuation of the property. Needless to state, valuation is critical for the reason that, stamp duty will be computed based on the land’s value. For all intents and purposes, stamp duty is a form of tax payable by the purchaser of the property.

If the property is located within a municipality, the duty payable is 4% of the market value of the land as determined by the Government Valuer. If the land is agricultural or outside a municipality, the duty payable is 2% of the market value as determined by the Government Valuer. For a charge or mortgage, the duty payable is 0.1% of the mortgage amount.

• Transfer of Land

Upon payment of the stamp duty, the purchaser shall apply to the Land Registry for the transfer of land by lodging the stated transfer documents.

In the event, the Purchaser is being financed, the charge over the property and consent to charge should also be lodged for registration together with the transfer. Thereafter, the duly registered documents; the original title deed, the transfer and the charge shall be forwarded to the financier, who shall hold onto them until the purchaser repays their loan in full.

Thereafter, the purchaser will be issued with a new title deed showing that ownership has been transferred and the old title deed has been destroyed. It is important to do a further search at the Land Registry confirming that ownership has been transferred.

3.0 Conclusion

Owing to the complex nature of a property purchase transaction, each party is advised to retain the services of a duly licensed to undertake the process of buying land in Kenya on their behalf so as to avert fraud and other related malpractices. On that account, the most critical role of a lawyer in a property/ land purchase transaction is conducting comprehensive diligence so as to ascertain the history of ownership of the property and whether there are any encumbrances or restraints to its disposition. Without that, a Purchaser will have entered into an obscure and murky business likely to culminate in frustration and loss of money.

Disclaimer

The information provided in this article is provided for information purposes only and does not constitute a legal advisory. Bearing in mind each transaction has its unique features; we advise prospective clients to get in touch with us for more pointed and contextualized legal advice. 

To contact F.M. Muteti & Co. Advocates, please send us an email on legal@fmlawadvocates.co.ke  or call +254769554444 or Book a strategy call HERE or direct message us HERE on WhatsApp at your convenience. Our legal team will guide guide you on how to buy land in Kenya and represent you interests firmly and professionally.

Are you a Kenyan landowner seeking expert guidance on the proposed land levy? F.M Muteti & Company Advocates, a leading land law firm in Nairobi, can help. We have extensive experience in real estate law, conveyancing, and property law, and are dedicated to protecting your interests.

This article, brought to you by F.M Muteti & Company Advocates, aims to clarify the details of this levy and its potential implications.

What is the Proposed Land Levy?

The Land Laws (Amendment) (No. 2) Bill of 2023 proposes an annual levy on freehold land located within urban or city areas. This means that owners of such land would be required to pay an annual fee to the government.

Why should you be concerned?

While seemingly simple, this levy raises several concerns:

• Impact on Ancestral Land and Livelihoods: Many freehold properties in urban areas are derived from ancestral land and crucial for basic livelihoods. Owners, often unaware of their land falling within city boundaries, may struggle to afford the additional tax burden as a result of this new land law in Kenya.
• Potential for Discrimination: The proposed levy solely targets freehold land, potentially infringing on the rights of freehold owners who already pay various taxes like rates and income tax.
• Misinterpretation of Land Ownership: Freehold land signifies absolute ownership, and owners are not “tenants” of the government. Therefore, charging an annual levy akin to rent raises questions about the true nature of the charge and its legality.

What can you do?

If you own freehold land within an urban or city area and have concerns about the proposed levy, consulting with an experienced land law lawyer in Kenya is crucial. F.M Muteti & Company Advocates, a leading law firm in Nairobi with extensive experience in land law, can help you understand your rights and explore potential legal options.

Contact F.M Muteti & Company Advocates today for a consultation and expert guidance on navigating this complex issue.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult with a qualified lawyer for personalized legal guidance.