Land due diligence process in Kenya

LAND DUE DILIGENCE PROCESS

The process of buying land is itself risky and tedious. It’s recommended that one be careful and attentive at every step to avoid being scammed completely or inheriting issues such as boundary disputes.

To have a seamless process, one should engage with professionals. A lawyer, land surveyor, and an area veteran who could be a neighbor or even an area chief. In their ways, these are people who will know a thing or two about this land, mostly issues that you might not find out through a lawyer or a land surveyor.

There are 5 steps one should undertake thoroughly before finally getting into a legally binding agreement with a land seller.

1. Physical inspection.

After receiving an offer from a broker or the actual land owner, the first step should always be conducting a physical inspection.

Always make sure the land owner is present at this stage so that they can clearly show you the land beacons and boundaries.

If possible, make sure to visit a second time, now without the land owner or the brokers.

The purpose of the second visit is to at least get a word from someone in the neighborhood or even from the local administrative authorities such as the area chief. A times, you could find hidden issues that the owners would never tell you about. For example boundary disputes with neighbors or flooding during rainy seasons.

2. Land verification

You have seen the land you intend to purchase and you are willing to move forward with it.

There are three phases in the verification stage.

1. Verification of land size & boundaries.
2. Verification of land registration and existence of any encumbrances
3. Verification of land rates, rent, and land use

At this stage, you will need a land surveyor.

During the land size and boundaries verification stage, the goal is to verify whether the size registered in the index map, mutation, and title deed matches what is on the ground.

Your land surveyor should acquire the index map and land mutation on your behalf and conduct a beacon confirmation on the land. After whichhe/she should present you with a report on their findings.

In situations where the land has never been subdivided before, the mutation does not exist.

It is good to note that when dealing with general boundaries, sometimes there are disparities of a few points. This means what is registered on the map could be slightly bigger or smaller compared to what is on the ground. This is acceptable.

When the land surveyor is confirming the beacons and boundaries, ensure the neighbors of the land are present so that if they have any issues they can raise them there and then.

The second verification stage will involve the land registry office of the specific county where the land is located.

Our goal here is to make sure the registration details (owner's name, id number and land size) in the title deed matches the ones in the search. Also to make sure there are no caveats or encumbrances on the land.This could be because of disputes and loans.

Ask for the following documents from the land owner,

• Copy of the land title
• A copy of their ID card
• If the land is registered under a company request for a CR12.

Conduct a land search or a green card search at the registry office using these documentse. A green card search is always recommended. Once you decide to do a green card search, you do not need a normal search since all the information in it is derived from the green card.

Think of a green card search as the title deed the government keeps while the land owner keeps the normal title deed. It includes all transactions that have ever been conducted on a piece of land either since it was issued by GOK or since that card was opened.

A new entry is fed on a green card every time a new transaction happens and a new green card is opened every time a new parcel number is issued after a subdivision. Meaning, if a piece of land is subdivided into 4 parcels, 4 new green cards are opened.

One advantage of doing a green card search over a normal land search is that you get a grasp of all past issues with the land if there are any.

The last verification process should be to check on the land rates, land rent, and land use. It can be done at the county council office in the particular area of the land and sometimes on ardhisasa website for the land rent.

This is essential because you will need a clearance certificate for the land rates and land rent when seeking building approvals. You want to make sure that the seller transfers to you a parcel that has all the rates cleared otherwise that burden will be passed to you.

Land rent is only applicable to parcels that have fixed boundaries.

Depending on how you intend to use the land, it’s good to know under which use it’s registered.

3. Extra due diligence

Knowing the history of land in Kenya, it would never be complete due diligence without looking into the Ndung’u report. In the past, some individuals illegally acquired land belonging to public offices and institutions through corruption. Make sure to cross-check if the land you are about to buy is in the land report. Download it from here.

Also, the National Land Commission (NLC) is mandated under section 107 of the Land Act to acquire land compulsorily on behalf of both the national and county governments.

This happens when the government intends to construct a project and they need more land than which it has, when the grid needs to pass through a piece of land and other different situations.

Sometimes you find that NLC had acquired part of the land and compensated the land owner. Normally it is the landowner's responsibility to submit his/her land title at the registry to be issued with a new one that accounts for only the remaining land.

In such cases, it’s always advisable to seek advice from land transaction experts like us, and we can help look deeper into the situation.

Once you have gone through each of these processes and you are satisfied that the land you intend to purchase is free from all the issues we talked about, it’s time to engage your lawyer who will prepare a land sale and purchase agreement. Be sure to read through it personally before signing.

Talk to us today, and let us guide you through this process.