When it comes to buying land, there are many cautions and reminders to use caution. This is a significant investment that will grow in value over time and has many applications. This article will examine the procedure for acquiring land and the precautions that must be taken before making a purchase.
- Land Identification
For best-case use, location is a critical element of resale value. During your search, you’ll investigate the following site characteristics.
Return on Investment (ROI): As a client, you desire to acquire real estate in a location with a track record of development or one that is predicted to have rapid capital growth.
Infrastructure: When choosing a location, you should consider amenities such good roads and transportation networks, sewage systems, and the availability of water, electricity, network, and internet connectivity.
Social Amenities: The comforts and quality of life of the aforementioned site are enhanced by its close proximity to fundamental social amenities like schools, hospitals, retail centers, police stations, and houses of worship.
County restrictions on development: Every county has established zoning and land use designation criteria, rules, and policies that are taken into account when awarding planning and building permits.
- Due diligence
Once the location has been chosen, you must conduct the necessary research to identify and mitigate any potential dangers. The due diligence checklist would examine the following: land ownership, community history, cleared land prices and registration, and, if appropriate, ground rent.
A search at the lands registry is necessary to confirm land registration. This information is for the buyer to confirm ownership and any potential claims, restrictions, or caveats on the property. There are multiple land registrations across the nation, with the primary one being located at Ardhi House, depending on where the land is located (Ministry of lands and physical planning headquarters). Indications of a successful land search include the following:
- The actual registered landowner/proprietor details
- The approximate size and area of the land in hectares
- Validity of the title
- Title and Search number
- Nature of the title (freehold/leasehold).
- Any restrictions/encumbrances against the piece of land including caveats, cautions and way leaves
- Last date when the land search was done
- Any applicable land rates
- Company directors and shareholders, in case the landowner is a company
It is crucial to have legal counsel and a site surveyor on hand to help with the due diligence process. These experts will be capable of
- Confirm the names of the seller match the names on the title deed
- Get a Registered Index map/Survey plan and confirm acreage and boundaries
- Consult with NEMA, KURA and KeNHA on any encumbrances
- Confirm that the landowner is a trustee and can sell the land
- Confirm that the property wasn’t illegally or irregularly allocated
- Undertake a company search from the companies registry
- Check if the land owner is up to date with land rate payments
- Confirm if there has been any litigation against the property
- Transfer of ownership
A letter of offer is created if the parameters of the sale are acceptable, and the sale agreement can be signed once the first payment has been received. To protect both the interests of the seller and the buyer, lawyers typically handle the transfer. The Ministry of Lands’ Land Registrar receives the documents for use in calculating stamp duty and registration.
The transfer documentation must be signed in duplicate by both the landowner and the buyer. Other paperwork needed for the transfer will include
- The Original land title deed
- I.D. Card/ Certificate of Registration of the landowner and PIN Certificate
- Passport-sized photographs of the landowner, or of the directors, and the company secretary, and the PIN Certificate if the landowner is a company
- Land rent clearance certificate if the land is held on lease-hold
- Rates clearance certificate from the Nairobi City County
- Original land rent and rates receipts
- Duly completed valuation form for the land
- Sell/transfer consent from the National Land Commission if the land is leasehold
A government land valuer who ascertains the market value of the land determines the stamp duty. The buyer is responsible for the cost of filing for registration and stamp duty. The Lands Registrar issues the title deed to the new owner after the buyer has paid the stamp duty. The purchaser then does a last land search to ensure that it has been registered in their name.
