Buying land the right way
By KEVIN OGUOKO | September 26th 2013
With homeowners, across the country, being evicted after years on a piece of land, when they have even developed the said land, it is important to ensure the land you buy has no encumbrances, writes KEVIN OGUOKO
Henry Oloo is a middle-aged Kenyan national working in Dubai. Having worked for a couple of months with a stable income; five years back, he managed to convince his bank to offer him a personal loan to add to his savings so he could buy a piece of land and build a house as was his dreams.
Buying land in the Utawala area of Nairobi proved daunting, as most sellers did not have the right documents accompanying their selling bid and assuring Oloo of his safety.
Another worry was the memory of bulldozers that come knocking on residents’ doors because of not abiding with the law in acquiring their pieces of land.
Fear of fraud
The few land sellers who had the necessary documents, read title deeds, did not also elicit comfort as cunning ways of fraudulent land dealings were making news.
The crooks came up with fake documents with the help of crook Land ministry officials to dupe unsuspecting land buyers. However, there are ways of going through the land purchase phase. One of the best is to use a conveyance lawyer.
After identifying the piece of land to buy, the buyer should hire a surveyor to determine whether the land identified, is indeed the one stipulated on the title deed.
The work of the independent surveyor is to determine that the piece of land is up to the right estimate, and that it is indeed in the right location as shown.
“In the case of sale of a huge piece of land in portions, the amputation of the land will be done with the help of the map on the deed plan so that you will not end buying the portion you didn’t select initially,” says Ray Omondi, a land surveyor working in Nairobi.
“Once the surveyor is done, he issues a beacon certificate, which confirms that indeed the land on sale is the one on the title,” says Lucas Kang’oli, a practicing Nairobi lawyer specialised in land issues.
Official land search
“An official land search will determine a number of things. First, it will determine the registered owners, the size of land, and if there are any encumbrances pertaining to the piece of land,” says Kang’oli.
Legal encumbrances of the official land search will include if the land is entangled in any court case or whether it was used as security for credit in financial institutions.
“Over the past couple of years, land search has also included checking land against the Ndung’u Report, which shows whether the piece of land was acquired illegally,” says Kang’oli.
Types of land
There are two types of land in Kenya; freehold, which usually is land used for agricultural produce and leasehold. An official search on a piece of land under the freehold lease and which is registered under the Land Registration Act (LRA) is done in the local county land office.
The second type is leasehold. Official search on this land is done either at the local county office or at the Ministry of Lands.
Either way, to do an official search at the Ministry of Lands or at the local lands office, the buyer would need a copy of the title deed of the land, which they will attach to a filled search application form, copies of ID and Kenya Revenue Authority Pin certificate.
If indeed the search satisfies that the vendor of the land is the owner and the land has no encumbrances that may include a charge by the bank, a caveat restricting sale of the land, amongst other issues, the buyer is free to move on to the next stage.
In cases where the land is registered as of leasehold tenancy, obtain rates clearance certificate from the Local council (now county office) and land rent clearance certificate from the Commissioner of Lands.
The seller’s lawyer ordinarily obtains the rates clearance certificate; this costs Sh2,500.
The seller and buyer or their lawyers can prepare the sale agreement at this stage. “The sale agreement is to their discretion. However, the law provides that the buyer of the piece of land is to provide ten per cent of the purchase price of the land with their lawyers for the purchase of their lands. The rest of the amount is to be deposited upon presentation of the completion documents,” says Kang’oli.
Kang’oli adds: “The completion documents must be within 90 days after the ten per cent deposit of the purchase has been deposited with the buyer’s lawyer.”
The next stage is the preparation of the completion documents. They include; original title in the name of the seller, duly executed transfer forms in triplicate. If a company is the vendor, the transfer forms must be sealed.
Other documents required are three passport photos of the vendor, if it’s an individual and if it is a company, three photos each of two directors of the company, a copy of Pin number of the seller, a copy of National ID of the vendor. However, if the seller is a company, copies of national IDs for two directors who’ll sign the transfer forms would be required.
Also required is a copy of the registration certificate if it’s a company, Pin certificate of the company, rates clearance certificate and rent clearance certificate in the case of leasehold tenancy.
Payment of Balance
After the buyer’s lawyer has confirmed the documents are authentic and are certified documents, the buyer should pay the balance before presentation of the documents to the relevant lands registration office.
The balance is deposited with the vendor’s lawyers along with the previous ten per cent deposited earlier with the buyer’s lawyers.
Thereafter, the lawyer should file transfer documents with the relevant land authorities depending on the type of land, either leasehold or freehold.
Other than the aforementioned documents, the buyer must attach his copy of ID, passport photos and copy of KRA Pin.
Now that the draft transfer form has been filed at the Lands office, an inspector visits the site to verify the development and state of the property.
Payment of the Stamp Duty tax
The fees are two per cent or four per cent of the value of the land depending on whether the land is within or outside the local municipality.
Stamp duty is paid by depositing the amount in an account provided by the Land’s registry office. It is mandatory to pay the stamp duty using the above mode.
Issuance of a new title deed
The registration is done with the issuance of a new title deed for freehold tenancy or Certificate of Lease for leasehold tenancy to the buyer.
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