Seen Land for Sale? Here’s How to Purchase Land in News24 Kenyaenya is one of the leading countries in terms of economy in the because of its business infrastructures. Another good thing about the country is that it is rich in agricultural sources. In fact, it produces large volumes of tea, sugarcane, coffee, corn and wheat. Both the commercial and agricultural factors make buying a land for sale in Kenya worth it. How to Purchase a Land in Kenya Land for sale in Kenya can either be a freehold or leasehold. It is mostly owned by the government and is leased out for periods of 50 to 99 years. After the period, the lease can be reviewed with a fee or taken back by the government. Land Pricing in Kenya Price of Land and properties in Kenya have escalated in price due to several factors including; supply and demand forces, the area or location of the land, and political condition of the country. The main reason for the land value appreciation in developing and urban centers is the extremely high demand associated with urban centers. Additionally, investors also anticipate future appreciations making the land cost an arm and a leg. The Land or Property purchase process in Kenya Commercial lands are for the purpose of gaining income or revenue. Foreigners are also allowed to buy land for sale in Kenya and build a building or any construction on it. On the other hand, agricultural land is usually owned by indigenous people. These lands can only be bought by local Kenyan companies (majority Kenyan-owned and managed) or local individuals. Foreign buyers are not allowed to purchase such kind of property. If you are to purchase land, you will need a real estate lawyer. To ascertain ownership and registration of the property, you should do a title search since many land areas in this country are not registered. After a property has been chosen and its price has been agreed upon, a sale agreement, which will serve as a conditional preliminary contract will be prepared by the estate lawyer, is signed by both parties (seller and buyer). As a buyer, you have to pay from 10% to 30% of the agreed purchase price. This payment is refundable if the seller abandons the transaction. Moreover, the closing period usually comes after 90 days of signing. At this date, you should obtain a municipal clearance certificate. This is to ensure that all previous tax payables are cleared or settled. Furthermore, you also have to get other approvals from ministry of lands, The length of time needed to settle the entire purchase process of the land in Kenya varies upon the local authorities and availabilities of required documents. The lawyer submits the documents to the Lands Office including the original title held by the seller, consent transfer, clearance certificates and the form for estimate stamp duty. Within 30 days from closing, you will pay the attorney’s fee. In addition, buying a land in Kenya even if you are not in the country is possible because the Kenyan government allows it. You can do the entire purchasing process through the power of attorney. Tips to consider in buying a land in Kenya • Do not work with direct seller: Though buying properties via direct property owners can be cheaper, the risk involved in this type of transactions is extremely high. This is for the reason that the seller may give you derivative documents after the payment. • Evaluate the location: Location is one major factor affecting price considerations. Lands located near cemeteries or dump sites usually have lower values compared to other lands. There is also less or no future appreciation to be expected. • Distance from main road: When we talk about “near the road property” we are talking about accessibility. A land for sale in Nairobi or in other places which is accessible to public transport is traditionally more costly e.g the creation of Thika Rd highway increased the value of the properties along it. • Other factors: When you are about to buy a commercial land, the first thing you should evaluate is the accessibility of communication (telephone or mobile phone signal), electricity and water. Here is a checklist to help even those selling land in Kenya; Checklist 1. Check if title RLA/RTA/GLA; (Registered Land Act, Registration of Titles Act or Government Lands Act, Chapters 300, 281 and 280 of the Laws of Kenya, respectively. These statutes have now been repealed and replaced by the Land Act, 2012 and the Land Registration Act, 2012, although the titles and registry under the former laws are still in place. 2. Conduct search at lands office (for all transactions) and company registry (if necessary); 3. Check user of the property – if user agricultural ( as freehold titles tend to be) land board control consent will be required. The sale transaction will be void is the land board control consent is obtained at all or within the requisite time frame. After the sale has been concluded, the change of user should be applied for and obtained if the property if intended to be used for another user other than that stated in the title document; 4. If property is leasehold, check the conditions endorsed on the original title or lease especially if there are development conditions. It is also important to check the terms of the leasehold title. If only a few years are remaining for the leasehold title to expire, the vendor may be required to apply and obtain an extension of lease. 5. It is common to check if the property is listed in the Ndung’u Lands Report on Illegal and Irregular Land Allocation report but currently the status/effect of that report is unclear; 6. If property is being transferred by administrators of estates of deceased ensure that the requisite procedures are adhered to. For instance, under RLA, the property has to be transferred to administrator using Form RL7 who will then transfer it to the persons entitled under the will (RL 19) who will then transfer the property to the purchaser. For RTA titles, the death certificate and the confirmation of grant of administration will be endorsed on the title and the administrator will be able to sell the property. 7. When preparing the sale agreement, check if the purchaser is getting a charge over the property in which case the entire amount/balance of purchase price will be secured by an undertaking from the bank or its advocates. Please also note that escrow agent or account as well as bank guarantees are becoming common methods of payment of balance of the purchase price and/or deposit, especially where the vendor’s lawyer reputation is in doubt or uncertain; 8. If there is an introducing agent’s fee to be paid who will pay and at what stage? Usually this is paid at the end of the transaction. Completion Documents 1. Original title to property – in case of change of user new grant issued (RLA/RTA Freehold to leasehold) and original grant surrendered- check that this has been done or that the change of user has been endorsed on the original title or grant – RTA uncommon; 2. The Land Rent Clearance and Rates Clearance Certificate, if applicable; 3. Consent to transfer the property from the Commissioner of lands, if applicable; 4. Consent to transfer the property from the relevant land control board, if applicable; 5. Cheque for stamp duty in the name of the commissioner of domestic taxes (a/c of purchaser);6. stamp duty valuation form duly completed by vendor or his advocate; 7. if change of user obtained PP2 (permission from city council); 8.3 colored passport sized photographs/copy of PIN Certificate & ID/Passport Number of transferor and transferee (director and director/secretary in case of company) It is important for one to use a reputable lawyer or firm of advocates to act for him/her in the sale transaction. Such lawyer will also assist in obtaining the requisite completion documents. Although purchasing a land in Kenya is sometimes quite difficult, this article can help you make it easier. Remember, the potential a land possesses can help you get a smart investment that you can be proud of.
Posted on: Fri, 15 Nov 2013 22:29:10 +0000