The typical Conveyancing Process in Kenya

The conveyancing process refers to the legal steps involved in transferring property ownership from one party to another. In Kenya, this process is meticulously governed by various laws, primarily the Land Act, 2012, and the Land Registration Act, 2012, among others. It's crucial for both buyers and sellers to engage qualified conveyancing advocates to ensure a smooth, legal, and secure transfer.

Breakdown of the typical conveyancing process in Kenya:

Phase 1: Pre-Contract / Due Diligence Stage

This is the investigative phase where the buyer (and their advocate) carries out thorough checks on the property and the seller.

1. Instruction of Advocates: Both the seller and buyer instruct their respective conveyancing advocates. It's highly recommended that each party has independent legal representation to avoid conflicts of interest.
2. Preliminary Searches by Buyer's Advocate: The buyer's advocate conducts various searches to verify the property's legal status and identify any potential issues. These include:
• Land Registry Search: This is the most crucial search. It verifies the seller's ownership, confirms the property details (size, registration number), and checks for any encumbrances (e.g., mortgages, charges, cautions, restrictions, court orders). An official search provides certified copies of the title register.
• Local Authority Searches: To check for outstanding land rates, planning restrictions, or any arrears with the county government. A Rates Clearance Certificate will be required later.
• Land Rent Clearance Certificate (for leasehold properties): To confirm that all annual land rent payable to the government is settled.
• Company Searches (if applicable): If the seller is a company, a search at the Registrar of Companies verifies its legal existence, directorship, and capacity to sell.
• Physical Inspection: The buyer's advocate often advises the buyer to conduct a physical inspection of the property to confirm its condition, boundaries, and occupancy status (e.g., if it's tenanted, the terms of the tenancy).
• Verification of Identity: The advocates verify the identity documents (ID/Passport, KRA PIN) of both the seller and buyer to prevent fraud and comply with Anti-Money Laundering (AML) regulations.
3. Obtaining Title Documents & Information from Seller: The seller's advocate obtains the original title deed (or certified copies) and provides other relevant documents and information about the property to the buyer's advocate. This may include:
• Seller's KRA PIN.
• Spousal consent (if applicable, for matrimonial property).
• Any existing mortgage details (redemption statement from the bank).
• Details of any existing tenants.

Phase 2: Contracts Stage

This phase involves drafting, negotiating, and signing the legally binding sale agreement.

1. Drafting of Sale Agreement: The seller's advocate usually drafts the Sale Agreement (also known as the Offer Letter or Letter of Intent). This document outlines the key terms and conditions of the sale, including:
• Full details of the seller and buyer.
• Full description of the property (including title number).
• Purchase price and payment schedule (e.g., deposit, installment payments, final payment).
• Completion date.
• Conditions precedent (e.g., buyer securing financing, due diligence satisfaction).
• Responsibilities for costs (e.g., legal fees, stamp duty, Capital Gains Tax).
• Consequences of default by either party.
2. Review and Negotiation of Sale Agreement: The buyer's advocate meticulously reviews the draft Sale Agreement to ensure it protects their client's interests and accurately reflects the agreed terms. Any discrepancies or additional clauses are negotiated between the advocates until both parties are satisfied.
3. Payment of Deposit and Execution of Sale Agreement:
• Once both parties agree on the terms, the buyer pays an agreed deposit (typically 10% of the purchase price in Kenya). This deposit is usually held by the seller's advocate in a joint client/stakeholder account, or by a neutral third-party stakeholder, until the completion of the transaction.
• Both the seller and buyer (and their witnesses) then sign the Sale Agreement, making it legally binding.
4. Application for Consents (if applicable):
• Land Control Board (LCB) Consent: For transactions involving agricultural land, obtaining consent from the relevant Land Control Board is mandatory. Without this consent, the transaction is void.
• Lessor's Consent (for leasehold properties): If the property is leasehold, consent from the lessor (e.g., County Government, National Government, or a private entity) might be required before transfer.
• Management Company Consent (for apartments/sectional properties): Consent from the management company or developer may be required, especially to ensure all service charges are paid up.

Phase 3: Completion / Post-Contract Stage

This is the final phase where the legal ownership is officially transferred.

1. Payment of Balances: The buyer's advocate ensures that the buyer has remitted the remaining balance of the purchase price. If the buyer is taking a mortgage, the lender will release the loan funds to the buyer's advocate.
2. Obtaining Clearance Certificates: The seller's advocate obtains:
• Land Rates Clearance Certificate: From the respective County Government, confirming no outstanding rates.
• Land Rent Clearance Certificate: From the Commissioner of Lands (for leasehold properties), confirming no outstanding land rent.
• Redemption Statement: From the seller's bank if there's an existing mortgage, indicating the amount required to discharge the charge. This amount is usually paid directly from the sale proceeds.
3. Preparation and Execution of Transfer Documents:
• The seller's advocate prepares the Transfer Form (or Deed of Assignment for leasehold), which is the official document that legally transfers ownership.
• Both the seller and buyer (and their witnesses) sign the Transfer Form.
• Other accompanying documents include copies of ID/Passports, KRA PIN certificates, and passport-sized photos for both parties.
4. Valuation for Stamp Duty: The property is valued by the Government Valuer for the purpose of calculating Stamp Duty. Stamp Duty is a tax paid by the buyer to the government for the transfer of property. The amount is usually 4% of the value for property within a municipality and 2% for property outside.
5. Payment of Stamp Duty: The buyer's advocate ensures the Stamp Duty is paid to the Kenya Revenue Authority (KRA). This is a critical step, as the transfer cannot be registered without proof of stamp duty payment.
6. Lodging for Registration: Once all documents are in order, the transfer documents, original title deed, clearance certificates, and proof of stamp duty payment are lodged at the relevant Land Registry for registration of the new owner.
7. Registration of Transfer: The Land Registry processes the application. Once satisfied, the Registrar registers the transfer, cancelling the old title and issuing a new one in the buyer's name. This is the point at which legal ownership officially changes hands.
8. Release of Funds: Upon confirmation of successful registration and issuance of the new title deed in the buyer's name, the balance of the purchase price (held in the stakeholder account) is released to the seller.
9. Post-Registration:
• Capital Gains Tax (CGT) Payment: The seller's advocate withholds the Capital Gains Tax (currently 15% of the net gain) from the sale proceeds and remits it to KRA.
• Handover of Property: The seller officially hands over possession of the property and keys to the buyer.
• Utilities Transfer: The buyer's advocate advises on changing utility accounts (water, electricity) into the new owner's name.
• Delivery of Documents: The buyer receives the original title deed, the registered transfer form, and all other completion documents.

The conveyancing process, while seemingly linear, can be complex and sometimes experience delays due to various factors, including bureaucratic processes at land registries or issues arising during due diligence. This is why having experienced conveyancing advocates is paramount to a successful and legally sound property transaction.

Reach out to our Advocates by dropping your details at the "Comment" Section. 

 

Key Factors to Consider when buying Property in Kenya/Tips For Advising Clients In The Current Real Estate Market

When advising a client on purchasing property, key considerations include their financial situation, the property's suitability for their needs, location, potential for future value appreciation, and legal and contractual aspects. A thorough understanding of the client's requirements, market conditions, and the property's specifics is crucial for a successful transaction. 

Review and Discussion:

1. Financial Factors:

• Budget:

Determine the client's maximum affordable purchase price, including not just the property price but also associated costs like stamp duty, legal fees, and potential renovation expenses. 

• Financing:

Explore mortgage options, pre-approval processes, and the client's ability to secure a loan. 

• Ongoing Costs:

Factor in mortgage repayments, property taxes, insurance, and maintenance expenses. 

• Investment Potential:

If it's an investment property, assess rental income potential and long-term appreciation. 

2. Property-Related Factors:

• Property Type:

Residential (house, apartment, etc.) or commercial (office, retail, etc.). 

• Location:

Proximity to work, schools, amenities, transportation, and the overall desirability of the area. 

• Property Condition:

Assess the need for repairs, renovations, or potential issues like structural problems or pest infestations. 

• Future Development:

Investigate any planned infrastructure or development projects that might affect property value. 

• Legal Aspects:

Ensure clear title, address any easements or restrictions, and understand the terms of the purchase agreement. 

• Environmental Factors:

Consider potential environmental hazards like contamination or hazardous waste. 

• Market Conditions:

Understand whether it's a buyer's or seller's market and adjust strategies accordingly. 

3. Client-Specific Factors:

• Needs and Goals:

Understand the client's specific requirements, lifestyle, and long-term plans for the property. 

• Risk Tolerance:

Assess the client's willingness to accept potential risks associated with property ownership. 

• Future Plans:

Consider the client's future needs, such as potential for expansion or downsizing. 

4. Legal and Contractual Aspects:

• Review Contracts:

Carefully examine all legal documents, including the purchase agreement, title deeds, and any other relevant paperwork.

• Seek Legal Advice:

Recommend a reputable real estate lawyer to guide the client through the legal process and protect their interests. 

By carefully considering these factors, advisors can help clients make informed decisions and navigate the complexities of purchasing property with confidence. 

 

Administrators de bonis non/Letters of Administration De Bonis Non

Introduction:

"De bonis non" (Latin for "of the goods not administered") is a legal term referring to a grant of representation (probate or letters of administration) required when the sole or last surviving executor or administrator of an estate dies before fully completing the administration of the estate. Essentially, it's a situation where the original executor or administrator dies before finishing the job of distributing the deceased's assets, and a new person needs to be appointed to take over. 

Significance of the principle:

A grant "de bonis non" is necessary when the "chain of representation" is broken due to the death of the sole or last surviving executor or administrator. This means there's no one left to complete the administration of the estate, and a new person must be appointed by the court. 

Two common types of grants:

Administration De Bonis Non (with will): This is issued when the sole or last surviving executor dies before fully administering the estate, and there's a will in place. 
Administration Intestate De Bonis Non (without will): This is issued when the sole or last surviving administrator dies before completing the administration of the estate, and there's no will. 
 

Applicability:
When a grant "de bonis non" is issued, the new administrator takes over the legal responsibilities of completing the administration of the estate, including distributing the assets according to the will (if there is one) or the laws of intestacy (if there isn't a will).

"Administrators de bonis non":
The person appointed to administer the estate in these cases is called the "administrator de bonis non". 

Exemption from Stamp duty in Kenya

 Stamp Duty exemption may be obtained for transactions, including but not limited to:

• Transfer of land to charitable organizations as gifts.
• Transfer of property between spouses.
• Transfer of family property to the members on demise of a family member in whose name the property was registered.
• Transfer of land from a Holding Company and its Subsidiaries where the holding company owns not less than ninety percent (90 %) of the shares of the subsidiary, etc.
• Transfer of family property to a company wholly owned by the same family (By virtue of Legal Notice Number 92 of 2007 issued pursuant to section 106 of the Stamp Duty Act).

All you need to Know about Making of a Will

 1.0 A will

• Any person can write a will at any time as long as they are of sound mind, above 18 and not been coerced to do so.
• A person, may through his/her will appoint an executor. This is someone named in a will who has the legal responsibility to take care of a deceased person’s remaining financial obligation e.g disposing property, paying bills, taxes, etc.
• Takes effect after death of the maker (testator/testatrix)
• It’s a mere intention of the maker – can be amended but only by the maker during their lifetime.
• Can deal with property acquired after death of maker (ambulatory)


Advantages of Making a Will

• The deceased can exercise control over property
• Avoiding courts from determining who is entitled to property

• Appointing property representatives of choice

• Avoiding disputes over property
• Persons outside family can have property
• The deceased can decide on how he/she can be disposed off

2.0 Invalid Wills
• When the maker of a will lacks knowledge and approval of a will, the will is as if it was not made at all. This is because of;

• Fraud/forgery
• Coercion
• Mistake /duress/undue influence

3.0 Oral Will

• Is valid only if; 

• Made before 2 or more competent witnesses 

• The maker dies within 3 months of making it 

• An oral will made by a member of the armed forces during a period of active service shall be valid if the maker of the will dies during the same period of active service even if he/she dies more than 3 months after making the will. 

• If there is any conflict in evidence of witnesses as to what was said by the deceased in making an oral will, the oral will shall not be valid except if the contents can be proved by a competent independent witness 

4.0 Written Will 

• Must be signed by the maker 

• If signed by somebody other than the maker, then this should be done in the maker’s presence and under his/ her directions 

• Must be witnessed by two or more witnesses. This two witnesses must not be beneficiaries in the will because otherwise there shall be need of an additional two witnesses. 

• If the maker of a will refers to another document in his will, the document shall be considered as part of the will as long as it is verified that it is the exact same document the maker was referring to in his/her will. 

• An executor shall not be disqualified as a witness to prove execution of the will or to prove the validity or invalidity of the will. 

• If a dependant or dependants feel that the deceased’s will does not provide adequately for their needs, they may make an application to the Court. 

• The Court may order a specific share of the property be given to the dependent (s) or periodical payments or a lump sum payment.

• In making its decision the Court will consider: 

• the nature and amount of the deceased’s property 

• any past, present or future income from any source of the dependant 

• the existing and future means and needs of the dependant 

• whether the deceased had given any property during his lifetime to the dependant(s) 

• the conduct of the dependant in relation to the deceased 

• the situation and circumstances of the deceased’s other dependants and the beneficiaries under any will 

• the deceased’s reasons for not making provision for the dependant. 

• “dependant” means 

• the wife or wives, or former wife or wives, and the children of the deceased whether or not maintained by the deceased before his death; 

• the deceased’s parents, step-parents, grand-parents, grandchildren, step-children, children whom the deceased had taken into his family as his own, 

• brothers and sisters, and half-brothers and half-sisters, who were being maintained by the deceased before his death 

• Where the deceased is a woman, her husband if he was being maintained by her before her death. 

5.0 Revocation, Alteration and Revival 

• A will can be revoked, altered and revived only by the maker at the time when he is competent to dispose of his property. 

• Revocation of a will happens when the maker takes some action to indicate that he/she no longer wants the will to be binding. 

• For revocation to be effective, the intent of the maker, whether express or implied, must be clear, and an act of revocation consistent with this intent must take place. 

• Persons who wish to revoke a will may: 

• Use a codicil, which is a document that changes, revokes or amends parts of will or the whole will 

• Make a new will that completely revokes an earlier will 

• May tear, cancel or burn the will 

• A will can be revoked through divorce. If after writing a will, the maker separates, divorces from his/her spouse and enters into a separation agreement in which the 2 settle their property rights, any inheritance or powers made by the will to the former spouse will be revoked unless otherwise stated.

• No alteration made in a written will shall have any effect unless the alteration is signed and confirmed. • Revival of will: A revoked or part of a revoked will can revived by codicil or a new will. To revive by a codicil, the revoked will must be in existence that is, not destroyed. The codicil must show an intention to revive.

The importance of procedural compliance when terminating controlled tenancies: The Case of Orchards Communications Limited v Suitable Hotels Limited Tribunal Case E247 of 2023 [2024] KEBPRT 524 (KLR) (21 March 2024)

Court: Business Premises Rent Tribunal (BPRT)

Date of Ruling: 21 March 2024

Judge/Tribunal Member: Hon. Chairman Mbichi Mboroki

Parties:

• Tenant: Orchards Communications Limited
• Landlord: Suitable Hotels Limited

 

Background

Suitable Hotels Limited (the Landlord) filed an application seeking to:

• Attach the Tenant’s goods for rent arrears totalling Kshs. 3,561,037, and
• Evict Orchards Communications Limited (the Tenant) from the premises.

The Tenant had previously admitted owing some rent but disputed the total amount and sought to remain on the premises.

 

Key Issues

1.      Whether the Landlord had complied with statutory procedures for terminating a controlled tenancy.

2.      Whether the Tribunal should authorize attachment and eviction.

3.      How the rent arrears should be settled.

 

Ruling Summary

• Statutory Non-Compliance: The Tribunal held that the Landlord had not issued a proper termination notice as required under Section 4(2) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, making the eviction request premature and procedurally defective.
• Payment of Arrears: The Tribunal found that the Tenant owed Kshs. 1,135,016.98 in arrears and ordered the amount to be paid in 3 equal monthly instalments, starting April 2024.
• Future Default: If the Tenant defaulted on this plan, the Landlord would be allowed to levy distress using a licensed auctioneer.
• Costs: The Tenant was ordered to pay costs of the application.

 

Legal Significance

This case reinforces:

• The importance of procedural compliance when terminating controlled tenancies.
• The Tribunal’s discretion to balance landlord rights with tenant protections.
• Recognition that landlords cannot bypass statutory safeguards, even when rent arrears exist.

 

Ask A Lawyer: Can foreigners buy land in Kenya?

The Legal Framework on Foreign Land Ownership in Kenya

Kenya’s land ownership laws come from the Constitution of Kenya (2010), the Land Act (2012), and other statutes, such as the Land Registration Act (2012). 

These laws regulate land tenure and transactions, including those involving foreigners.

Foreigners can buy land in Kenya, but they face specific restrictions: 

• Article 65 of the Constitution limits foreign ownership to leasehold land for up to 99 years. 
• Foreigners cannot own freehold land, but they may lease land for extended periods.

As such, not all land types are accessible to foreigners. Kenya’s Constitution and land statutes limit foreign ownership as follows:

• Foreigners and foreign companies cannot own freehold land.

• Foreign ownership is limited to leasehold land, for a term not exceeding 99 years.

• Foreigners are barred from owning agricultural land directly unless via a Kenyan-incorporated company and subject to approval by the Land Control Board.

  Types of Land Foreigners Can Own

• Leasehold Land: Foreigners can buy leasehold land, typically for 99 years. They can renew the lease, but the government controls the land tenure.
• Agricultural Land: The Agricultural Land Control Act (1967) prohibits foreigners from owning agricultural land. This protects Kenya’s agricultural sector. However, foreigners can lease land for agricultural investment, following specific legal guidelines.
• Land in Special Economic Zones (SEZs): Kenya’s government has set up SEZs to attract foreign investment in sectors like manufacturing, technology, and logistics. Foreigners can lease land in SEZs, often for up to 99 years.

Restrictions to Ownership of Foreign Land in Kenya

Several legal restrictions regulate foreign land ownership to safeguard local interests.

• Leasehold Ownership Only: Foreigners may only acquire land on a leasehold basis, not freehold.
• Land Ownership Limits: Foreigners cannot own more than 100 acres outside SEZs. This limit prevents land speculation and keeps land available for local use.
• Land Transactions Approval: Foreign land acquisitions need approval from the National Land Commission (NLC). This ensures all transactions comply with Kenyan law.
• Land Use: Foreigners must align land use with local zoning regulations. They may need additional permits for specific uses.

 

•  

Divorce process in Kenya: Drafting and Filing a Divorce Petition

 

It is the first step of dissolving a marriage, where a disgruntled spouse petition to the family court to have the marriage with their spouse terminated on either ground of desertion, adultery, cruelty, or irretrievably breakdown.
The petition should provide details such as: –
the names of the parties;
the date and the place of the marriage;
the address of the parties involved;
any living child(ren) of the marriage with their birth dates;
details of any previous proceedings regarding the marriage, providing the dates of such proceedings and the applicable decrees/ outcomes.
the alleged matrimonial offence, or other grounds on which the relief is sought, setting out with sufficient particularity in separate paragraphs the individual facts relied on, other than the evidence by which they are proved;
the reliefs sought from the court, which may include; –
the dissolution/annulment of marriage;
prayers of nay costs sought;
restraining orders where a spouse is molesting another; and
restitution of conjugal rights; among other reliefs. N.B Issues of custody and maintenance of children are dealt with by the Children’s court subject to the provisions of the Children Act, 2022.
The petition should be signed by the petitioner and, in case of a minor or a person of mental unsoundness, a next of kin.
Documents that accompany a divorce petition
A marriage petition must be accompanied by the following documents; –
A verifying Affidavit: It verifies that the petitioner has material knowledge of the facts deponed and the honesty/veracity of the deponed facts.
A copy of the certificate of marriage
A list of witnesses if any
A list of documents e.g., birth certificates of the children, and reconciliation certificate.
Written witness(es) statements.
Where a petitioner seeks ancillary reliefs from the court, they can file a notice of motion at any stage of the proceedings. Once the divorce petition and the accompanying documents have been filed in the court, the court signs a notice to appear.

Notice to Appear
A notice to appear is served upon the respondents, informing them that a divorce petition has been filed and they need to enter an appearance either on themselves or through an advocate within fourteen (14) days.
The notice should be accompanied by the petition or any other ancillary application.
Once the petitioner or their advocate serves the respondent, they should file an affidavit of service as proof of the service.
Respondent’s Response and Cross-petition
After the respondent is served and enters an appearance, they should file a response to the petition within fifteen (15) days.
The response beyond denying the facts given in the petition should contain the statements of facts relied on their denial.
A response should be accompanied by; –
A verifying affidavit verifying that the matters deponed are within respondent’s knowledge and the veracity of the deponed facts;
A list of witnesses if any;
Witnesses’ statements if any; and,
A list of any relied documents.
A respondent’s response may also contain cross-petition that should include all the elements listed of a petition.
The response and the cross-petition should be served upon the petitioner or their advocate.
Certificate of Compliance
After the close of the pleadings (where both parties have filed all their documents) the petitioner may apply for a certificate of compliance, previously referred as a registrar certificate.
The certificate of compliance merely verifies that all pleadings, service, witnesses’ statements etc., have been duly acted upon and the petition is ready for hearing.
An application for the certificate of compliance is done via a notice of motion supported by a sworn supporting statement.
Setting the petition for hearing.
Where a certificate of compliance has been issued, the matter proceeds to the most critical part, which is the hearing.
During the hearing, the petitioner or their advocate adduces evidence of the irretrievably broken marriage and the fact that there is nothing to salvage.
The respondent will also have an opportunity to support their response and/or cross-petition.
After the hearing, the court schedule the judgment date/ decree
Decree Nisi
The court on being compelled that the marriage has irretrievably broken and there is no way the parties can be expected to live together, issues a decree nisi.
A decree nisi does not dissolve that marriage but merely acknowledges the broken nature of the marriage and accords an opportunity to the parties to examine if they truly want to dissolve the marriage.
Decree Absolute
After the expiry of 4-6 weeks, the court, upon application and payment of the relevant fees, issue the decree absolute.
A decree absolute fully dissolves the marriage between the parties, and they are deemed to have never married.
Only after the decree absolute is granted can the parties remarry.
The Magistrate, on issuing a decree absolute, should send a certified copy to the Registrar, who insert the nature of the proceedings, the date on which the marriage was dissolved and the date on which the decree absolute was issued into the marriage register.
A party dissatisfied with the Magistrate’s decision regarding the divorce petition appeals to the High Court within 30 days of such order. An appeal to the High Court, unless the court otherwise orders on application by the appellant, act as a stay of such order or decision.

What are Divorce Papers? What is the Divorce Process?

What are Divorce Papers?
The divorce paperwork includes:

Petition for divorce
Verifying Affidavit`
a duly authenticated copy of the Certificate of Marriage;
a list of witnesses (if any);
written witness statements (if any); and
duly authenticated copies of evidential documents (if any) to
be relied on at the hearing of the petition.

What is the Divorce Process?
The simplified steps to divorce/dissolution of marriage and obtain a divorce decree in Kenya are as follows:

The Petitioner will prepare the divorce petition for the dissolution of the marriage and attach the divorce papers highlighted above.
Once the petition is filed in court and the notice to enter appearance by the Respondent is prepared, the Petitioner shall serve the divorce papers on the Respondent who is required to enter appearance.
The Respondent shall have some days thereafter to file their answer to the petition and any cross petition.
Thereafter the Petitioner may file an answer to the cross petition and thereafter pleadings shall close.
After the close of pleadings, the petitioner may request the court to issue a certificate allowing parties to move to the hearing stage.
After the certificate is issued, a hearing date shall be granted.
If the court is satisfied, it will issue a decree nisi which will be converted to a decree absolute 30 days later.