Personal Finance

Land deals: Key reforms to consider when transationing

land

A sign post advertising land for sale in Kieni on July 22, 2015. PHOTO | JOSEPH KANYI

Purchasing land is one of the biggest investments people make. Over the years, the Ministry of Lands and Physical Planning has been undertaking various reforms.

These reforms significantly altered the traditional way of land transactions and it is important to consider them when buying or selling land. The key reforms include:

Electronic land transactions

The Ministry of Lands launched a platform known as ardhisasa for electronic land transactions on April 27, 2022. Land transactions in Nairobi are now carried out digitally on this platform.

Conversion of title documents

There are different types of title documentation for land now including title deeds, certificates of title, certificates of lease, grants, conveyances, indentures, and assignments. The different types of documentation have made it difficult for some buyers to understand the land documents and processes and the differences.

These differences arose largely from the development of the law from colonial times to the present day. The differences are no longer functional and are just serving to complicate the process and documentation. As result, there is ongoing reform to convert title documentation from these different types to one consolidated type under the Land Registration Act, 2012.

The effect of this reform is that landowners, starting with those in Nairobi, are now being asked to apply for the new replacement titles in exchange for the existing ones. Sale and purchase of land transactions now need to take into consideration the process of obtaining the new replacement titles.

Ownership of sections in buildings

Ownership of sections in a building by different people is increasingly becoming popular in urban areas.

This form of ownership of property takes the form of owning a section in a building together with a share in the common areas of the building and the land where the building is situated. The share in the common area is owned together with the owners of the other sections in the building.

This type of ownership has largely been held under long-term leases. There is another avenue of ownership under the Sectional Properties Act, 2020. Long-term leases have been the popular option due to the challenges that existed in the prior existing Sectional Properties Act, 1987.

The Ministry has revamped the law and is now requiring parties to convert their long-term leases into the Sectional Properties Act, 2020.

Conclusion

At this point, it is important to have a high-level awareness of these key reforms as they will impact any sale, purchase, charge, or any other transaction regarding land in Nairobi. The phased implementation of the reforms has already begun in Nairobi before the subsequent extension to the other areas of the country. Change is as always never easy.

The successful implementation of these reforms will need all the key parties to work together to deal with the challenges that will continue to face the rollout of these reforms and many more that are urgently required to meet the high standard in Article 60 of the Constitution on land use and management in Kenya.

Mr Ondwari is a Partner & Head of Real Estate, Banking & Financial Services at Ashitiva Advocates LLP