Acquiring land is a significant endeavor, often representing a lifelong investment and a cornerstone for various aspirations. In Kenya, buying land involves intricate steps requiring careful consideration and adherence to legal protocol. Whether you are a seasoned investor, a first-time homebuyer, or an entrepreneur eyeing development opportunities, understanding the nuances of the process is paramount.
In this article, we highlight the process of buying land in Kenya to help you make an informed decision and embark on your land ownership journey with confidence and clarity. Join along!
The first step in buying land in Kenya is identifying a suitable piece of land. This involves researching different areas considering location, accessibility, infrastructure, and potential for development. Visiting the site and assessing its suitability for your intended use is essential.
You can do it yourself or engage a real estate firm in land identification. The reasons for land identification include the following:
- To know whether the land exists
- To find out if the property is in a similar condition as the seller presents it
- To verify that the size of the land in the title deed is similar to that in the land registry
- To verify if the land seller is the registered owner of the land.
Search in Land Registry
Once you’ve identified a piece of land, search for the land registry to verify the property’s ownership, boundaries, and encumbrances. This step helps ensure that the seller has legal authority to transfer the land and that no outstanding disputes or debts are associated with the property.
You need to pay Ksh. 500 with the search taking an average of 3 days. The documents required include:
- A copy of the pin certificate
- A copy of the original ID
- A duly filled search application form (Form RL 26)
- Proof of land ownership
- A copy of passport for non-citizens
- A copy of the alien card for foreigners residing in Kenya
Here is a guide on how to conduct a title deed search online.
Preparation of Offers and Price Negotiation
After confirming the land’s status, you can make an offer to the seller. This involves drafting a written offer specifying the purchase price, payment terms, and other conditions.
Negotiations may follow, during which parties can agree on a mutually acceptable price and terms. It’s advisable to involve legal professionals during this stage to ensure the offer is legally binding.
Deposit and Sale Agreement
Once an agreement is reached, a formal sale agreement is prepared. This document outlines the terms and conditions of the sale, including the agreed-upon price, payment schedule, and any contingencies.
It’s common for the buyer to pay a deposit at this stage to secure the transaction. The deposit is typically a percentage of the total purchase price and is held in escrow until the completion of the sale.
Documents and Consent to Transfer
Upon deposit payment, the seller will provide the necessary transfer documents, including the title deed. The buyer should conduct due diligence to ensure the documents are genuine and up-to-date.
Additionally, the buyer must obtain consent to transfer from relevant authorities, such as the county government. This step helps ensure that the transfer adheres to all legal requirements. The documents required for this process include:
- Commissioner’s consents to transfer
- The land’s original title deed
- A valid land valuation report
- Copies of the property seller identification card, and if it is a company, you need a certificate of incorporation
- Filled and signed transfer forms
- Lessor consent of transfer
Before purchasing land in Kenya, it is crucial to engage a licensed valuer. They will assess the land’s market value, considering factors such as location, size, and potential for development.
The valuer will provide a valuation report detailing the assessed value of the land. This report is essential for determining stamp duty payments.
Stamp Duty payment
Once the land price is agreed upon, the Kenya Revenue Authority (KRA) conducts a stamp duty assessment. The stamp duty is a tax imposed on the transfer of land ownership.
After receiving the stamp duty assessment, the buyer is required to make the payment to KRA. This payment must be made within 30 days from the assessment date.
Registration of Transfer
During the registration of the transfer, you should do the following:
- Prepare Transfer Documents: The buyer and seller must prepare and sign the transfer documents. These include the sale agreement, transfer deed, and other relevant documents.
- Submit Documents to the Land Control Board: The transfer documents must be submitted to the local Land Control Board for approval. The Board ensures that the transaction complies with land ownership regulations.
- Payment of Land Rent and Rates: Before transfer, ensure that any outstanding land rent and rates are paid to avoid complications during the transfer process.
- Land Registry Submission: After Land Control Board approval, submit the transfer documents to the Land Registry for official transfer of ownership.
Exchange of Documents
The following happens during an exchange of documents:
- Execution of Sale Agreement: The buyer and seller execute the sale agreement, and the agreed-upon payment is made. This marks the official exchange of the property.
- Handover of Possession: The seller hands over possession of the land to the buyer per the terms of the sale agreement.
Update of Land Records: The Land Registry updates its records to reflect the new owner. A new title deed is issued in the buyer’s name, completing the land transfer process.