I started investing in real estate five years ago and the market has so far been on my side. However, as a family man, I have been contemplating registering some of the apartments and plots I have acquired over the years under the name of my three children. Can I register property under the names of the little angels? Are there are children who own property and how?
It is possible to register the investments under the names of your little angels. Spouses are increasingly registering jointly-acquired property under the names of their children.
Some spouses who own rental houses also instruct their lawyers to open bank accounts under the names of their children for tenants to deposit rent. Other children become registered property owners as heirs of their late parents in line with the Law of Succession Act. Their late parents included them in wills as sole beneficiaries.
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There are also toddlers who have shares on the Nairobi Securities Exchange. That is how many children — irrespective of gender or age — have become owners of both residential and commercial real estate.
Modern day parents have several reasons for registering their little angels as owners of apartments, plots and homes in posh estates. For instance, some investors in real estate who thrive on bank loans opt not to be registered owners lest they default.
It would be difficult for creditors to auction property registered under the name of children as the investments are legally not their parents’ who are merely trustees.
Some parents introduce children to property ownership early to prepare for their future. Another set of children who own property are those born of single parents, making them sole heirs.
Some parents also opt to register property in the names of their little children to avoid battles over matrimonial property should divorce occur. For some married women, registering property under children is the surest way of locking out of inheritance children their husbands may father with mistresses.
For children who inherit property of their late parents, courts often appoint guardians or trustees to administer the estates on their behalf until they are 18. Legally, the guardians have power and responsibility to administer the estate of the child – receive, recover and invest the property for the benefit of the child.
Other responsibilities include taking reasonable steps to safeguard the estate of the child from loss or damage. If property owned by the child is a rental house, the guardian must keep records of payments up-to-date and produce them in court when required.
Moreover, it is an offence for a guardian to neglect or fail to produce books of account in respect to property of a child when demanded.
— The writer is an advocate of the High Court.