Steps To Take When Conducting Land Due Diligence
The land is a highly sought-after commodity that requires thorough due diligence to ensure that it is legally acquired and…
The land is a highly sought-after commodity that requires thorough due diligence to ensure that it is legally acquired and the purchaser obtains a valid title. Owning land in Kenya is said to be one of the safest investment decisions one can make.
The land ownership process can be very easy as long as proper verification of documents and due diligence is conducted. Aside from due diligence, one of the critical steps of obtaining land legally is conveyancing which is the process of transferring property from one legal owner to another.
The following documents are required during the land purchase process: Original title deed in the name of the seller, an agreement for sale, transfer forms, spousal consent (as the case may be), board resolution to transfer where a company is selling, and consent to transfer. To ascertain that the piece of land will solely belong to you and there is a smooth transfer of ownership, the following are the things you should be keen on;
Confirming land’s existence
The first step when buying land is to confirm the existence of the parcel by visiting the actual location of the land with the seller. When visiting, make an effort to speak to neighbors and ask about the ownership of the parcel. You can also find out whether they have heard or experienced any dispute over the land, and any matter of interest to you. You may also confirm the beacons if you have the survey map. It is also important that you consult the county land coordinators to check if there are any reported or documented conflicts associated with the land.
Confirming land ownership
Confirming the existence of the parcel you want to buy might not necessarily mean that the title of the land is valid. . You must go a step further and confirm ownership. This step involves ascertaining the true owner of the land. You can request to see the original title deed and take a copy along with the seller’s ID then conduct a search on Ardhi Sasa online platform or at the Ministry of Lands.
This process may take a few hours or days and is done at a fee. From the results, confirm that the name and particulars in the search match that of the seller’s ID. Where a physical/hard copy search is issued at the Ministry of Lands, it must have the official seal and be signed by the Registrar of Lands. You can also do a search of the title number on Kenya Law, it may come up as a subject matter in court or land that has been gazetted for other reasons.
With the copy of the title deed, you can apply for Survey Maps from Survey of Kenya and get two maps, one showing the exact measurements of the piece you are buying called ‘mutation’ and the other showing the neighboring lands. It is advisable to obtain the survey maps before visiting the land for verification of its actual location so that when on-site, the seller can answer any questions you may have on-site. Verify all the details on the map and confirm that all dimensions are drawn to scale also ensure that all beacons are in place. While the cost of having your own surveyor may increase the cost of acquiring the property, it is recommended to consider having one.
After all this, you can negotiate with the seller on the purchase price. Have the vendor’s lawyer draft an agreement since the law requires all land transactions to be in writing. The draft agreement can be reviewed by your lawyer to ensure that the terms protect your interest. Before instructing a lawyer, discuss and agree in writing on the scope of work and the fees chargeable. Both you and the seller will be required to sign the agreement. It is important to ensure that the spouse to the seller if they are married or any other relevant party to the transaction, is present or aware of the transactions to avoid future complications.
Seeking approval for transfer of land
The vendor will then book a meeting with the Lands Control Board (LCB) if it’s agricultural land to seek consent to transfer the land. The board meets once a month and a booking fee may be charged to book the board. Should there be a booking cost, the seller pays it. Both you and the seller should attend the meeting to assure the Lands Control Board that the sale/purchase is above board.
The documents required in this process include a copy of the title deed, a current search, spousal / family consent if applicable, a copy of the ID and KRA pin of both the seller and buyer, and executed application for consent forms. If the board approves, they issue a letter of consent to the owner of the land.
Payment of stamp duty and land valuation
With the original title deed, signed and witnessed transfer form, spousal/family consent (if applicable), a copy of ID, and KRA pin of the seller, you as the buyer, can initiate the transfer process. Apply to have the land valued by a government valuer and then pay the stamp duty as assessed and stated on the transfer form. The stamp duty is 4 percent of the assessed land value for urban areas and 2 percent for rural areas. The seller is responsible for paying the applicable Capital Gains Tax.
You will then take all the transfer documents and any other documents needed to the Ministry of Lands to book for application for registration of the land. This registration process will take around two weeks and then you will be issued with an original title deed in your name.
To confirm if the land truly belongs to you, it is advisable to conduct another search on Ardhi Sasa or at the Ministry of Lands office in your region. The final search should read your name.
With the recent developments in Case Law, Dina Management Limited v County Government of Mombasa & 5 others (Petition No. 8 (E010) of 2021) the Supreme Court Judgment cited Article 40 of the Constitution and held that while Article 40 entitles every person to the right to land, this is subject to the limitations including land that has been found to have been unlawfully acquired. In the event a title is not acquired regularly, the ownership of the land cannot be protected. As a buyer, stay vigilant and invest in the due diligence to know the history of the land, then ensure proper procedure is followed in effecting transfer of the land to your name.