4 Tips for Purchasing Land in Nairobi
Owning a piece of land is a dream for most Kenyans, as it provides a sense of security and freedom from monthly rental payments. However, due to the rising cases of fraudulent land deals, potential buyers are cautious and hesitant to invest in Plots in Nairobi, or other parts of Kenya.
Nevertheless, various legal entities can purchase and own land in Nairobi, including individuals, groups, or communities, companies, and the government. Even foreigners can own land in Kenya, albeit on a leasehold basis. Foreigners can buy commercial and residential land, or properties in towns and municipalities without restrictions, as long as they comply with the prescribed procedures. However, foreigners cannot own freehold titles, first-row beach plots along the Kenyan coast, or agricultural land unless authorized by the President.
Kenya’s land laws stipulate tenure systems and how long land should be held. A Certificate of Title, also known as a Title Deed, serves as evidence of ownership of land on a freehold basis. Freehold titles allow the landowner to hold the land indefinitely. A certificate of Lease serves as evidence of property ownership for those who own land on a leasehold basis. Foreigners can own land in Kenya on a leasehold basis for a maximum of 99 years, with possible renewals as long as the property is economically active and not needed for public use.
If you’re interested in buying land in Nairobi, here’s a guide on how to do it:
Find a Suitable Property
Your first step as a buyer is to find a suitable piece of land to purchase. You can start by asking for referrals from people you know or by working with a reputable real estate agency. Real estate agents act as independent professionals, matching buyers with sellers, and can be paid by either the seller or buyer.
Once you’ve found a piece of land that you’re interested in, visit the site to confirm that it meets your criteria. Check the physical location and boundaries of the property, and ensure that the neighboring landowners agree with its boundaries.
Make an Offer
After identifying a suitable piece of land, the next step is to make an offer to the seller. To do this, it is recommended to get a reputable advocate who is well-versed in conveyance to help with the process. Your advocate will describe the property on offer, propose the offer price, payment terms, and provide both the seller’s and advocate’s details.
It is important to avoid making direct payments to the vendor, or their agents at any point during the land buying process. Instead, it is advisable to channel your funds through your advocate, who will take necessary precautions to protect your money and interests.
If the seller accepts your offer, a Letter of Offer should be prepared and signed. This letter acts as a formal instruction to the legal teams of both the buyer and the seller, confirming the agreed-upon details of the transaction. With a Letter of Offer in place, both parties can proceed with the land buying process confidently.
Conduct Due Diligence and Search the Lands Registry
After your offer is accepted, it’s important to conduct due diligence on the property. This involves conducting an official search on the property’s title at the Lands Registry, which falls under the Ministry of Lands and Physical Planning. The search will reveal the rightful owner of the property and any pending issues related to its ownership.
The search results will provide crucial information such as the owner’s full name, the size of the land, and any claims on the land. This includes whether the land has unpaid land rates, is being used as collateral or surety for a bank loan, or is involved in a legal dispute.
You can opt to conduct an online land search for Ksh 500 payable via M-Pesa, credit card, or debit card through the e-Citizen portal. Kenya has digitized its land records, making it easy and convenient to conduct an online land search. However, it’s still essential to engage a licensed surveyor to get a land map and verify that the land size and boundaries indicated on the deed match the reality on the ground.
It’s important to note that certain overriding interests that may not be noted on the register could affect a registered piece of land. These include spousal rights over matrimonial property, rights of water, rights of way, trusts, and more. This is why due diligence is critical to ensure you have a clear understanding of the property’s status before completing the purchase.
Sign a Sales Agreement
After conducting due diligence, you may authorize your legal representative to proceed with the contract stage. If you are purchasing a completed property that is ready for occupancy, you will typically pay a deposit and complete the transaction within a specified period, which is typically 90 days from the date of signing the sales agreement. However, if you are purchasing an off-plan property, you will typically pay the required deposit and then pay a percentage of the purchase price in equal instalments until the project is completed.
The seller’s legal representative will typically draft the sales agreement, including all offers and terms and conditions, and submit it to your legal representative for approval. Once the sales agreement is executed, you will pay the agreed-upon deposit to the seller’s legal representative’s account through your legal representative.
It is important to note that under Kenyan law, a signed sales agreement is the only legally binding contract between the parties, not a Letter of Offer (LOO). Even after signing LOOs, either party can withdraw from the land deal without facing legal action, or financial loss. LOOs are always subject to contract and are considered preliminary agreements that both parties accept to deal at an agreed price.
To execute transfer documents, you must first obtain consent to transfer from the Commissioner of Lands. You can do this by scheduling a meeting with a special Land Control Board along with the assistant county commissioner for the area.
Once the full purchase price is paid, it is advisable to use a third-party advocate or intermediary to hold the funds and the seller’s Title Deed. The seller must then sign a land transfer form to begin the process of transferring the land.
To change ownership and obtain a new Title Deed, you will need to provide the following documents at the Ministry of Lands:
- The sale agreement
- The previous Certificate of Title
- A signed land transfer form
- A land rate clearance form issued by the municipality
- Proof of a land search that is no older than 6 months
- KRA PIN Certificates
- Passport photos.
It is recommended that you conduct a final online search about a week after purchasing land in Nairobi to confirm that the property is registered under your name and that all the details are accurate.