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Rash decision: To avoid this, engage a registered valuer in property transactions

By Harold Ayodo | May 12th 2022 | 2 min read

We bought land as a chama in the outskirts of Nairobi with the intention to subdivide it into plots to sell at a profit five years ago. However, the area chief recently told us the government plans to acquire plots in the area to construct a hospital and a public school. We are aware that we will be compensated financially but what can be done to ensure the State does not pay us below the market price?

Lydia, Nairobi


It is important to seek the services of a professional valuer registered with the Valuers Registration Board (VRB) to value your land at current market rates.

Property valuation is the practice of analysing real properties and developing a professional opinion on their value using tested and proven scientific processes.

Property valuation is important before buying or selling property, insurance, when banks are advancing loans against securities, reparation in cases of disputes, court sureties, book value, and determination of land rates.

For you, valuation will come in handy before the State acquires your property by compulsory acquisition since you will be able to bargain.

A valuation report may help to tabulate compensation amount and it should only be undertaken by professionals.

Valuers analyse several aspects of the property before arriving at a market price by mainly considering the locality, state of repairs and maintenance of the property, and soil characteristics.

Other variables include topography, geological and environmental components, financial factors, and prevailing macro-economic and fiscal policies.

Social, political and cultural factors and a host of legal factors surrounding the instrument of ownership are also among their areas of interest.

While involving professionals in real estate transactions is important, prospective buyers are perplexed when two different valuers give different market values.

The argument for the different values could be that the variables that valuers consider keep changing. The margin of error should not be so wide as to arouse suspicion about the credibility of the valuer.

Professional valuers use various methods but the common ones are the investment approach and the depreciated construction cost and sales comparable method.

Valuation reports have several factual details like the plot number, date of inspection, location of the property and details on the title deed.

The report also entails social and infrastructural services within and near the property such as roads, electricity and piped water. It also has details of the plot shape, topography and type of soil. Valuers also describe the type of development on the plot before winding up the report with the valuer’s opinion and estimate the market value at that time. As a rule of thumb, it is paramount to engage a registered valuer in property transactions to avoid making rash decisions.

- Harold Ayodo an Advocate of the High Court of Kenya

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