The ban on renewal of land leases was Thursday lifted following the introduction of rules to guide the extension of ownership.
Land secretary Jacob Kaimenyi said the new rules will give priority to those occupying the land.
Lifting of the ban is set to unlock property deals which were frozen as investors remained jittery to develop or sale land whose leases had expired or neared expiry.
The government will also notify owners of land of expiry of their leases five years before the tenancy period expires via registered mail and make physical contact to advice on the renewal should they fail to respond to the notices.
Occupants of lease hold property had become targets of a cartel which has been colluding with officials at the Ministry of Lands to fraudulently process extension and renewal of land leases.
In Nairobi, hired goons relying on forged ownership documents illegally descended on homes claiming that the land in question had changed hands after expiry of leases.
This prompted the December freeze on renewal of land leases.
“The Cabinet moratorium on processing of leases has been lifted and it is good news to all stakeholders in the land sector,” Prof Kaimenyi said.
“As a result of the stoppage, lease property owners have experienced challenges when seeking to develop property as they require leases to secure bank loans,” he said.
Banks were also left with property used to secure loans whose leases had expired or near expiry, exposing them to losses.
Under the new guidelines, the government will notify property owners whose leases are about to expire, through newspaper notices with countrywide circulation, should they fail to respond to registered mail.
Physical follow ups will be made if they fail to respond to the media notices.
In the event that those occupying land do not wish to renew it, the property will revert to the government.
“The approval of extension of renewal of leases for large scale land owners shall be based on the benefits to the economy,” said Prof Kaimenyi.
This is an attempt to deal with absentee land owners.