15/09/2023
Land transactions are increasingly becoming a menace in this Country. A Seller can decide to sell a parcel of land to more than one party thus the backlog of land matters before the Environmental and Land Court. Therefore to avoid being a statistic, we encourage a party to follow the laid procedures before purchasing property be it a parcel of land or real estate. We wish to expound on the same as follows:
1. Conducting a Search
Upon identifying, the property you want to purchase you must ensure that you conduct search at the Land Registry. The search shall reveal to you who is the registered proprietor, acreage and if there is any encumbrance.
To conduct this search, request the seller to furnish you with a copy of the title deed, a copy of the Identity Card of the Seller and a copy of the KRA PIN.
Save for the search, the buyer is also encouraged to request for a certified copy of a green card. This will enable you to see the previous owners and the purchase price.
Additionally, ensure that you confirm whether there are unpaid Land Rates.
In as much as conducting a search at the Land Registry is important, one should also visit the property to ensure that there are clearly marked beacons, there are no boundary disputes and any other issue that may arise. You are also encouraged to get a deed plan of the property and you can get services of a surveyor to confirm the acreage and boundaries of the property.
2. Sale Agreement and Negotiations
Once the buyer are satisfied with the due diligence, the buyer could then approach the seller and negotiate on the purchase price. When both parties are satisfied with the purchase price then they can proceed to sign the agreement. After executing the agreement, the same should be presented for stamp duty, which costs roughly Kshs. 200/=.
The buyer should know that upon signing the sale agreement, they are required to pay 10% deposit to the seller. The remaining balance shall be paid on completion. Parties are usually given 90 days for completion. Upon completion, parties can then exchange completion documents and the remaining balance.
The purchase price should be either held in a joint account, an escrow bank account or if the purchase price is released to the Seller’s advocate then they should issue an undertaking that they will not release the money to the seller until ownership is successfully transferred.
3. Transfer
The Purchaser’s Advocate usually does the transfer process after receiving duly executed transfer forms and the completion documents. Upon receiving all these documents, the buyer’s advocate can then lodge the application at Land’s Registry. The buyer bears the costs for the process of transfer. Moreover, it is important to note that the buyer is required to pay stamp duty for the property, which is usually 4%of the purchase price.
4. Registration
Upon successfully lodging the transfer application and the same is accepted, the property shall then be registered in the buyer’s name.
After the registration, process is done, the buyer should ensure to conduct a search to confirm that the property is indeed registered in their name.
