There are various legal and recognized ways of acquiring Land in Kenya. Some of the recognized ways of obtaining ownership of Land in Kenya include: gifting, nomination, purchase, succession-inheritance, adverse possession, nomination, surrender and compulsory acquisition- which can only be in favor of the government, land allocation, land allotment, and land adjudication.
Under the Constitution of Kenya, 2010 and the Land Laws applicable in Kenya, illegal acquisition of land is frowned upon and any titles issued under illegal and undue circumstances are deemed as null and void. In the event it is established that title to land was acquired through fraud or any other illegal means, Kenyan laws dictate that such ownership shall be challenged and revoked. This has been the undertone of various Court decisions and the position protected and upheld by the National Lands Commission.
In this Article we seek to address and guide you through the common Procedure of acquiring land in Kenya- land purchasing.
1. Due Diligence over the Property
The land purchasing process commences with identifying a suitable parcel of land that you wish to invest in. This shall include the pricing as well as establishing the utility of the land in comparison to the Purchase price and ultimately the purpose of the purchase.
It is highly recommended that a Purchaser conducts a search on the property to establish the following:
- That the land actually exists.
- That the size of the property from the Land Register reflects the readings on the title documents.
- That the property is in the state the vendor has represented.
- That the vendor of the property is registered as the owner of the property. In the event the vendor is a beneficial owner, they must disclose their position at the point of contracting.
If the vendor is a company, a search on the company is advisable. This can be done online by accessing the business registration services on www.ecitizen.go.ke
2. Apply In-Person
- This is done at the ministry of lands and physical planning headquarters or in any of their Land Offices in local district/ Sub County. One is required to pay a fee of Ksh 500 for the search; submit a duly filled search application (form RL 26) and attach the copy title document. The land search at Lands office takes an average of 3 days.
- After the search one is issued with a stamped Certificate of Official search (form RL 27) showing the status of the land.
- Duly filled Application for Official search (Form RL 26) Form RL 26
- Proof of land ownership
- PIN certificate (copy)
- Identity card (copy) for the applicant if Kenyan.
- Foreign national registration certificate- alien card (copy) For foreigners who are residents in Kenya
- Passport (copy) for the applicant if a non-citizen.
3. Apply On-line
How to do an online land search in Kenya
- Log onto the e-citizen portal E-Citizen and sign up
- Click on Ministry of Land, Housing & Urban Development link and choose the land search option
- Enter the title number and fill the online land search form Kenya and submit
- Confirm the details and proceed to pay using the available payment method which can be a debit card, credit card, M-Pesa, or bank transfers. One is required to pay a fee of Ksh 500 for the search
- Once the payment is confirmed, the applicant can proceed to print the results, and if you choose not to, the information will always be available on the portal anytime you log in.
After conducting the search and the results are favorable, the purchaser shall request the vendor to issue them with a letter of offer as well as the Agreement for Sale. These documents shall set out the terms of the Sale and Purchase and they shall be prepared by the Vendors Advocate. Both parties are encouraged to participate in the negotiations of terms such as payment and period of completion of the transaction.
If there are no objections, the parties shall sign the Agreement for Sale. The parties shall be bound by the agreement until the full purchase price is paid and the completion documents handed to the Purchaser. On or before signing the Agreement for Sale the Purchaser is required by Law to pay a deposit of at least ten percent (10%) of the Purchase process to the Vendor or the Vendor’s Advocate. This amounts may vary depending on the Vendors preference.
It is important to note that a duly signed and attested Agreement for Sale sets out the relationship between the Purchaser and Vendor. If the Agreement for sale is not fully signed or the signatures witnessed neither of the Parties have the right to enforce the terms of sale.
However, out of good will by both parties some terms in the agreement may be implied.
5. Procurement of Completion Documents and Payment of Balance of Purchase Price (Pre-completion)
After execution of the Agreement for Sale the Vendor has the responsibility of ensuring that all the documents needed for the successful registration of the transfer of title in favor of the purchaser are available.
On the other end the Purchaser has the responsibility of ensuring that the balance of the purchase price is available for payment to the Vendor. All this ought to be done before the completion period lapses. The completion period and payment periods are dictated by the agreement for sale.
The Completion documents include but are not limited to:
- the Original Title Deed for the Property
- Signed and filled transfer forms
- copies of the vendor’s Identification card or certificate of incorporation (where the vendor is a Company)
- lessors’ consent to transfer,
- the Commissioner’s consent to transfer
- land control board consent to sell, and
- a valid valuation report for the property.
On or before the completion date the Vendor shall give notice to the purchaser that they are ready to complete the transaction. In exchange of the Purchase price, the vendor shall thereafter hand over the completion documents to the purchaser. Where advocates are involved in the transaction, these documents shall be exchanged between the advocates.
6. Registration and post registration search
The steps are as follows
- Apply, pay and obtain rates clearance certificate from the County Government. – This is done by the vendor’s lawyer through consulting the local county government lands office. The whole process can take five days at the cost of Ksh. 10,000. This certificate proves that there are no outstanding fees to be paid at the City County’s office. Lawyer’s fees are calculated according to the value of the land. Upon payment of all outstanding Land Rates at the Local County Governments and upon an application and payment of the prescribed fees. The respective County Governments shall issue a Land Rates clearance certificate.
- Apply and Obtain Land Rent Clearance Certificate from the Commissioner of Lands – Upon payment of outstanding Land rent and on application, the commissioner of lands issues a Land rent clearance certificate. This certificate is proof that there are no outstanding fees to be paid to the County Government
- Apply and Obtain Consent to transfer from commissioner of Lands – The consent to transfer leasehold land held by the government under the repealed Act is required to be obtained from the National Land Commission. Upon payment and issuance of Both Land rent certificate and Land rate certificate, an application is made in writing by the lawyer to the commissioner of lands and the prescribed form executed for consent to transfer the desired property. Upon payment of the prescribed amount, consent to transfer is issued. This process takes nine days at the cost of Ksh. 1,000.
- File the transfer instrument at the Lands Office for assessment of stamp duty payable on the transfer – The draft transfer is done by the buyer’s lawyer and the transfer instrument has to be approved by the vendor counterpart before it’s filled at the land’s office to be assessed for Stamp Duty. After the lawyers approval the instrument is submitted for assessment of stamp duty at the Lands registry. The stamp duty is 4% of property value for urban lands and 2% for rural lands. The stamp duty amount to be paid is indicated when the application is filed, but it takes approximately 7 days to obtain the receipt of payment (obligated to pay with a banker’s check) from the bank. The payment is made directly at the Lands Office.
7. Obtain valuation for stamp duty
- Receive inspection by land officer – Once the draft transfer 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. Once the evaluator has inspected the property, a report is compiled which the value is endorsed on the transfer.
- Obtain valuation of the property by Government evaluator – The inspector visits the site to evaluate and verify the indicated purchase price of the property in order to ensure accurate tax payment. If the assessed value differs from the one indicated by the parties, an additional payment is requested.
8. Stamp duty payment
- Endorsement of value for Stamp Duty and assessment of Stamp Duty – Complete the Stamp Duty from including the purchase price. The stamp duty assessment officer will then assess the stamp duty payable and indicate the amount on the forms. This takes three days.
- Payment of Stamp Duty – It is mandatory to pay the stamp duty with a banker’s check. The payment is made through commercial banks and the approved banks include the Kenya Commercial Bank and The National Bank of Kenya. Payment is made to the Commissioner of Domestic Taxes on behalf of the Commissioner of Lands. It takes four days for the Kenya Revenue Authority to confirm receipt of payment. This Stamp Duty is payable online via the KRA Itax portal
- Submission of the documents for franking/ obtaining franked documents – After payment of stamp duty, the transfer documents are submitted for franking to confirm that any charges or taxes, such as the stamp duty on those documents have been paid.
9. Land Registration
- Pay registration fees – A payment of Ksh 500 charged and one issued with a booking form to fill.
- Lodge the completion documents with Lands Office for registration of the transfer – The franked transfer documents are lodged for registration at the Lands Office. The vendor lawyer obtains these documents which include; original certificate of Title, Rates Clearance Certificate, Land Rent Clearance Certificate and the consent transfer. This process takes 12 days.
- Duly filled booking form
- Consent to transfer land (copy)
- Official land search (original)
- Land rates clearance receipt (copy)
- Land rent certificate (copy)
- Transfer instrument (3 original + copy)
- Identity card (copy)
- PIN certificate (copy)
- This process takes two weeks and Ksh. 5,000 is charged to obtain process a new title deed certificate.
After a successful registration you will receive the following documents
- An original title deed with the name of the buyer
- Registered transfer forms
- The pay in slip of stamp duty
- Post purchase activity
After a week or two, you as the buyer should do another search with the ministry of Lands to confirm that the land is now under your name.
As demonstrated above, the process of purchasing land in Kenya has been simplified over the years and is much more convenient. At Optiven Limited, we have in-house Advocates who shall guide you through the process, offer attestation services at reasonable fees We simplify the land acquisition process for our clients as well as carry out transfer of properties bought from us at a small fee that is determined on a case-to-case basis.
The content of this document is intended to be of general use only. For specific legal advice on Optiven Limited Real Estate Investments please do not hesitate to reach us through the contact details below.