By: Kendi Latoya

Are you planning to buy a house or apartment in Kenya? Well, this guide is for you.

So, you have identified a house or an apartment either for investment purposes or use as a home. What are the legal measures that you need to take to ensure that what you are purchasing has a good title? This Article shall guide any purchaser wanting to purchase a house or apartment in Kenya.

NOTE: It is important to engage an experienced real estate lawyer to ensure that your interests are safeguarded.

STEP 1: OFFER LETTER AND DUE DILIGENCE
Most sales, usually commence with an offer letter from the vendor/seller of the property providing terms such as purchase price, user of the property, short description of the property, deposit etc. There is a confirmation period usually placed in the offer and once the same is not accepted within the said period, it lapses. It is important to review the offer letter as the terms therein once accepted are usually included in the Agreement for Sale. Noting that most offer letters usually require a deposit payment, it is important that you engage a lawyer to conduct due diligence on the property to ensure that the Title is clean and has no encumbrances therein.

Do not be in a rush to accept offers prior to conducting your own due diligence.
So, what due diligence should be conducted in this case?
1. Official Search: A search should be done on the land where the apartment or house is built and, in the instance, where there is a lease or sectional title, then a search should also be conducted in this case. The search will reveal ownership of the property and land, any registered encumbrances (if any) such as Charges, mortgages etc.
2. Company search: In the instance that a Company is selling the property, then a search on the company that is selling the property should also be conducted at the Companies registry to ensure that they actually exist.

STEP 2: AGREEMENT FOR SALE
This is the governing document for any sale as it is usually legally binding on both parties and is a guide for how the sale shall be conducted from the beginning to the end. It usually has all the terms agreed upon by the parties. As a purchaser, the Sale Agreement should be able to protect you by ensuring that the money you have put in is protected and that it can be refunded by the seller within a stipulated period in the event that he/she does not comply with their obligations.

By practice, this document is usually drafted by the seller’s advocate. Ensure that your lawyer reviews the agreement to ensure that you are fully covered in case of any default/breach of terms.

Note that it is advisable to have a separate lawyer aside from the seller’s lawyer to review the documentation. It is not advisable to retain the same lawyer for both parties.

STEP 3: EXECUTION AND STAMPING OF THE AGREEMENT FOR SALE
Once the Agreement for Sale, is drafted and executed, the same should be stamped at the Ministry of Lands within thirty (30) days of the said execution.

STEP 4: PERFORMANCE OF OBLIGATIONS
As the Purchaser, your obligations are usually financial and in the Agreement for Sale, a stipulated timeline for when the deposit and balance of the purchase price is provided therein. A purchaser should ensure that they comply with their payment obligations to avoid rescission/cancellation of the Agreement for sale by the vendor/seller, which usually requires that the purchaser forfeits 10% of the purchase price as a penalty. In instances where the vendor does not rescind the Agreement, interest is usually charged, hence to avoid these instances it is important to comply with the said obligations.
The Vendor on the other hand has the obligation of obtaining all the completion documents which are necessary for effecting the transfer in favor of the purchaser. Completion usually takes place at the vendor’s parties where the obligations of the purchaser and vendor are done simultaneously.

STEP 5: TRANSFER OF THE PROPERTY TO THE PURCHASER
Once the purchaser’s advocates obtain the Completion documents, stamp duty payment is effected at a rate of 4% of the value of the property as per the Government valuation for municipal land and 2% in the case of rural land. After payment of stamp duty, the transfer in
favour of the purchaser is done. Once effected it is important to conduct a post-registration search to confirm that the transfer has been done.

Please contact us if you require further advise on the above subjects.
Email: info@kendikadvocates.co.ke
Website: www.kendikadvocates.co.ke
Tel: +254768028504

Disclaimer:
This information provided in this Article is intended as a general overview of the subject dealt with. This information is not intended to be, and should not be used as, a substitute for taking legal advice in any specific situation. Kendi & Company Advocates is not responsible for any actions taken or not taken on the basis of this information.