Land Processes Guide- Buying and Selling of Freehold and Leasehold Land In Kenya

 Freehold land is the land that gives the owner absolute ownership of the land for life. The owner can use the land for any purposes, however, in accordance with the local regulations. For the purpose of evidence of ownership, the government issues buyers with a certificate of Title for freehold.

 Foreigners, are also allowed to purchase land located within a town without any restrictions provided that they comply with the laid down procedures. The only restrictions are on owning agricultural land, freehold titles and first row beach plots along the Kenyan coast.

 Article 65 of the Kenyan Constitution limits foreigners to holding only leasehold titles for a maximum of 99 years but permits future renewals on condition that the subject property held under that title is economically active and is not required for public use purposes. Thus, if a foreigner buys a property held under a freehold title, it will revert to leasehold.

Buying of a leasehold property.

When your offer of purchasing a leasehold property has been accepted, it is important to understand significant information about the lease and that includes how long the lease would last, obligations or rights that you have over it.

A lease is usually granted for a period between 99 to999 years with the Kenyan constitution limiting non-citizens to a maximum tenure of 99 years. The lease should clearly outline the expenses the leaseholder will incur during the lease period and that may include issues of maintaining, managing and insuring of the land. The lease would also restrict selling of the property should you opt  for selling in the near future and obtaining a mortgage from a lender when the lease is about to expire would be hard. Although mechanisms of extending a lease exist, it can be done so at an extra cost.

Selling of leasehold property.

When selling leasehold land before the end of the agreed contract, the remaining lease will pass to the new leaseholder who will be bound by the original contract. It is always important to appoint a Real Estate Agent and a conveyancer with knowledge of managing leasehold sales.

Before you place the property on the market, you should also take advice as to whether the property is defective. A defective property would cause issues when trying to sell and it can affect a prospective buyer by making it hard for them to obtain a mortgage. The leasehold land may be deemed defective under the following circumstances:

     1. Short length of the remaining lease

     2.  An absent landlord

     3. If the ground rent increases

     4. Increasing service charge

     5. Insufficient right of service and right of access.

Buying/ Selling Process of Freehold Land

The buyer gets seller’s copy of title deed.

An official land search is then conducted at district/ county land offices to confirm ownership.

The registrar issues the results using the form.

A survey map is obtained using the title deed number at the Survey of Kenya to indicate property location.

Visit the property to confirm its existence and carry out due diligence.

Get land rates payment clearance.

Draft sale agreement using a lawyer if it's matrimonial and the seller’s spouse must sign an agreement to give consent.

If the land has encumbrance rights for example loan charge, leased access/ ease of way rights, the parties with these rights have to give transfer consent using the form.

If the land title is registered under two parties with equal undivided share for example spouses also fill form 35 to give transfer consent.

‣Seek consent to transfer land if the title is indicated freehold for example agricultural land.

‣Take the consent form to the registrar.

‣Submit forms to land registrar plus a copy of title and consent fee of Ksh.1000 receipt for stamp duty valuation.

‣Registrar submits documents to government valuer for stamp duty valuation.

‣Buyer pays stamp duty fees at KRA i-tax website.

‣The buyer fills an application for land registration plus original title, stamp duty receipt, sale agreement, certified copies of KRA pin and National ID number.

‣Fill the application for a certificate of title form.

‣Submit all to the land registrar.

‣Land registrar will use form 2 to register the land.

‣Land registrar will issue a booking number.

‣Takes average of 45 days to get the title deed

‣Format/ look for freehold land certificates.

-Edited by Emomeri Maryanne