10 Steps to Own Land in Kenya
Purchasing land is a great investment. It’s a fixed asset that will likely appreciate over the long-term. Analysts are forecasting a real estate bubble burst in the next months due to the prevailing economic situation. Once it bursts, prices will come down significantly and it will be time to FINALLY get that plot.
For novice buyers, the process of finding and buying land can be a daunting task. It can be long, expensive and heart wrenching. You may end up purchasing land on a road reserve or even a swampland if you’re not careful. We’ve all heard those horror stories.
If you are planning on buying land in Kenya, there are vital steps you should follow. Here’s a 10 point guide to help you:
- Money Matters
You need to get your budget right first. How much do you have saved up? How much land can you acquire with money in your possession? You might consider talking to your bank for financing. Many banks in Kenya have tailored financing for first time buyers. Don’t get too ambitious with the loans lest you lose your precious acquisition after years of struggling to pay off your loans. Start small to enable you to pay back comfortably.
- Location, Location, Location
The process of choosing WHERE to buy land is very important. The last thing you want is to acquire land in some backwater place with no prospects for development in the next century. Do your research about what plans the government has for the part of the city or country you are buying land.
Also, someone may decide to squat on your land for a period of two decades as you wait for the value to appreciate. If you did not issue a land use caveat, squatters can claim compensation before moving out.
- What’s your fancy?
So you have the cash and you want to acquire some valuable real estate. What exactly are you looking for?Land in Kenya can be owned by four types of entities namely; the government, county governments, groups or individuals. These ownership entities can be characterised by different tenure systems as defined below.
Freehold: The freehold tenure allows you as a landowner to hold the land for an indefinite term. This is not open to foreigners in Kenya. Foreign land ownership is a post for another time.
Leasehold: The leasehold tenure will allow you as a landowner to hold land for a limited tenure with an option of extending the tenure upon expiry. The Kenyan constitution limits non-citizens to a maximum tenure of 99 years.
Customary: Customary tenure is entirely based on communal ownership of land, where the land assignment is done to a clearly defined group of people who usually belong to the same ethnic community/clan/family in accordance to traditional African land inheritance customs that were in place way before colonialism.
Public/ State land: This is a tenure type that portrays the government as a private landowner and assigning all unoccupied and wasteland to it.
You’ve got to pay attention to detail when choosing what works best for you. Do not mistakenly purchase land classified as public to develop your dream house. It’ll end in premium tears! Cons are everywhere!
- Due Diligence
Identified some land you’d like to acquire? You need to be extra diligent and take these next steps as outlined Land Commision of Kenya:
- A prospective buyer should obtain a copy of the land title deed from the seller to facilitate a proof of ownership search at the Lands Registry. On a good day without bureaucracy, it takes about two hours to get search results after filing a search application form (and attaching a copy of the title). This process will cost Ksh 520.
- If the search at the Lands Registry was satisfactory, you need to check in with the county office. This is very important to uncover any unpaid land rates. You don’t want to buy land with outstanding land rates that could be very costly in the long run. Nairobi County will set you back Ksh 7500. It varies from county to county.
- Get maps. You’ll need two of these. You can get them from the ministry of lands or your local surveyor. One of these maps will give you an overview of the land you plan to purchase and close by plots while the other is drawn to scale. This will give you a visual of borders. The maps cost Ksh.300 each.
- Site visit, ground verification: So you have the maps. Now what? You’ll need to visit the site accompanied by the seller and surveyor to verify dimensions. Once everything is cross checked, you can start marking beacon points. You’ll need to erect beacons after purchase. Very important to avoid border disputes.
- Lawyer up!
Now you’ve confirmed the land is legit and you’re eager to be a landowner. Not so fast. You’ll need to lawyer up. This isn’t just some regular purchase. This is a big deal so you’ll need a lawyer specializing in conveyancing to represent you in the signing of the sale agreement.
The agreement, which is usually prepared by the seller’s lawyer, indicates the terms of sale. Price, mode of payment, whether you’ll be issued a title deed or certificate of ownership-the whole shebang. At this point, the seller may ask you to pay a deposit, but it is advisable not to until you get clearance from the Land Control Board – which has the final say on land deals.
- Land Control Board
Land Control Board. They’re like a council of elders who look out for local communities in matters pertaining to land purchase. Don’t get too excited until you get cleared by them. What do they do? They ensure land transfers in your area of interest are transparent and that transacting parties are willing buyers and willing sellers.
You don’t want to end up buying land that is being fought over by siblings right? Most forums charge Ksh 1000 for a meeting. However, you can get past the schedule at a cost of Ksh.5000 by getting clearance from the county commissioner.
- Stamp Duty
Got the green light from LCB? Great! Now, to a complex, unfun part. You are required to apply for the valuation of the land by the government valuer using something called a valuation form filled by the seller. The Lands office will use these documents to calculate the stamp duty payable to the state. The stamp duty should be paid to the Commissioner of Domestic Taxes. It is usually 4 percent of the land value for urban areas 2 percent for rural areas.
- Paperwork- Transfer documents
Taxes out of the way? Good. Time for some tedious paperwork. Sign the sale agreement, make the payments as outlined in the agreement and get signed transfer forms from your seller.
You should then take all these documents alongside the sale agreement document, clearance from LCB, clearance from the county, land search documents, your national ID, KRA Pin, 3 passport photos and the old title deed to the ministry of land.
Whew! Pesky paperwork. But you’ve got to do what you’ve got to do. Change of land ownership will take around 2 weeks (without bureaucracy) and you will pay at least Ksh 5000 to process a new title.
- Making it official
Paperwork done. Time to make it official. Get your title, make sure it’s in your name (check again and again before you leave the lands office). Next, pay for a notice of land transfer with the Kenya Gazette. It shouldn’t cost you more than Ksh 300. This way, you’ll let the general public know that you’re now an official land owner of Plot X so no one should get any funny ideas.
- Land Caveat
To be extra cautious, especially if you don’t plan to develop your land soon, issue a land use caveat to ward off unauthorized squatters. See point number 2 to learn why this is important.
How to go about issuing the caveat
- Fill in prescribed form (Form R.L. 22) from the Ministry of Lands
- Avail an affidavit explaining the interest you have in the land.
- Provide a copy of the title (or the title number)
- Pay the prescribed fee as advised by the Ministry of Lands.
You’ve got all bases covered. Yay! You’re now a land owner. You followed the guide step-by-step, didn’t cut any corners and now you’ve got your title in the safe (we hope).