Want buy land? Here’s the abc of land transactions
: The real estate sector has been invaded by fraudulent sellers who purport to sell land and never issue title deeds as proof of ownership.
Worse still they do not present legally-binding documents to investors to seal any transaction. Therefore, when a buyer notices they were conned they have no legal document to claim for damages caused.
The buyers to an extent lack information of the legal documents involved in the land transfer which has caused many investors to suffer losses.
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There are various documents involved in land transfer and each has its unique role in the purchase process especially land.
Letter of Offer
This is a single page document that expresses intention by the buyer who wants to purchase a property and spells out the binding terms and conditions for both the seller and the buyer.
Details contained include the name of the seller, buyer, lawyer overseeing the transaction, property identification number, the payment terms either cash or installment and a slot to fill in next of kin details. The buyer is required to sign this document in duplicate.
One copy is retained by the seller and the other one belongs to the buyer. This is the first document a buyer signs after selecting a plot and paying the booking fee. A letter of offer therefore eliminates the possibility of two parties buying the same piece of land.
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This is a legal contract that obligates a buyer to buy and a seller to sell a product and in this case land.
Contents of a sale agreement
Identity of the parties: Their name as they appear on IDs/ Passport numbers and email addresses
Identity and description of the property under sale- this includes the legal description of the land, the plot number, physical location and the condition of the property either vacant or occupied
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The purchase price of the property and payment of the purchase price
General and special conditions- these are the conditions that surround the property on sale including who is supposed to pay stamp duty, legal fees and the completion period.
Importance of a sale agreement: It 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. The sales agreement is filled in triplicate one for the vendor, one for the purchaser, one for the lawyer/ legal advisor overseeing the transaction.
Title transfer document
This is a document that is involved in transfer of a title deed from the name of the seller to the buyer’s name. This document is filled in when payment of a property is completed. A title transfer is attached with the details below before submission to the Lands Registry for the actual transfer.
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Approved consent for sale from the Lands Control Board.
Stamp duty slip as a proof of paying government levies.
Copies of ID number of the buyer and of two directors of the investment company
KRA Pin Certificate of the buyer and of the investment company
Passport photos of the buyer and of two directors of the investment company
Certificate of Incorporation of the investment company
The title transfer document is filled in three copies; one copy is filed at the Land Registry, the second at the investment company and the third belongs to the buyer.
Importance of a title transfer form- this document is the legal proof of transfer of the title and can be used when tracing the history of a property in the Lands Registry.
In conclusion, every investor should have these three documents at the back of their minds to ensure the property they have purchased belongs to them legally. Ensure you request for these documents in your next land purchase, they will be provided to you by a Relationship Manager. If live outside Kenya, an offer letter is sent to you via email address while a sales agreement and a title transfer form will be sent to you via your preferred courier service.
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Real EstateKRALands Control Board