SECTIONAL PROPERTIES ACT, 2020 (NEW ACT) VIS-À-VIS THE SECTIONAL PROPERTIES ACT, 1987

(OLD ACT).
NOTABLE DIFFERENCES BETWEEN THE OLD ACT AND THE NEW ACT

SECTIONAL PROPERTIES ACT, 1987 SECTIONAL PROPERTIES ACT, IMPLICATION

2020

Section 2- The Act applied to land Section 2- The Act applies to land Developers will not be able to dispose
held on freehold or leasehold held on freehold or leasehold units if the residue of the term of the
where the unexpired residue of the where the unexpired residue of leasehold interest of the land upon
term was not less than 45 years. the term is not less than 21 years.which the premises situated is less than
21 years. This is because developers are
prohibited from selling units unless they
are registered under the Act. The only
alternative is to grant tenancy.
Section 9- Requirements on Section 9- Requirements on The sectional plan prepared by the
sectional plans sectional plans surveyor will have to be sealed by the
Provides that sectional plans The two requirements have been authority responsible for survey. This is
should define boundaries of each repealed. to protect developers by ensuring
unit and should delineate the The following requirements have surveyors prepare good sectional plans
external surface boundaries of the been added: sectional plans which conform to standards accepted.
parcel and the location of the should be geo-referenced, should
building in relation to them be signed and sealed by the office
or authority responsible for
survey and they should indicate
the user of the unit.
Section 11- Certificates to The New Act provides that the The Act provides a timeline of 30 days
accompany sectional plans. The certificate from the county to fasten development transactions,
Old Act provided that every plan government shall be applied for bearing in mind that government
presented for registration as a by the surveyor who shall make procedures sometimes slow down
sectional plan shall be endorsed the application to the County transactions.
with or accompanied by a Executive Committee Member
certificate of a surveyor and a responsible for approval of
certificate of a local authority. buildings.
The Act provides that the county
The Act did not provide a timeline government will issue a
within which the local authority certificate within thirty (30) days
should issue the certificate applied if the structure conforms to the
for. development scheme and the
development control by-laws
Section 13- Conversion to units. Section 13 provides that owners Unlike the Old Act which only applied to
The Act provided that owners of of residential or commercial residential apartments, the New Act
residential premises shall not sell premises shall not sell them until applies to both commercial and
them until the plans are registered the sectional plan is registered. residential apartments.
All on going long-term sub-leases All ongoing long-term sub leases which
registered before the intended to confer ownership have a
commencement of the Act that time limit of 2 years to convert. Failure
intended to confer ownership of to convert within the given timeline
an apartment or flat or office to attracts a penalty of Kenya Shillings two

Section 31- Complaints were
lodged at the tribunal established
under the Landlord and Tenant
(Shops, Hotels and Catering
Establishments).
Enforcement orders in case of non-
compliance from the tribunal’s
orders were sought at the Resident
Magistrate’s Court. Under the Old
Act, rulings from the tribunal were
final unless it was an appeal based
on an error of law.
Section 46- a purchaser could
rescind the purchase agreement
within ten days of its execution if
the developer failed to deliver
within those ten days a notice with
respect to the charge or proposed
charge stating the relevant
particulars given on the section.
Renting of units by owners was
provided for. The unit owner had
to disclose the amount of rent he
or she is charging.
Section 48- Developers were
required to hold in trust payments
made to them by purchasers
be reviewed within 2 years to hundred and fifty thousand (K.Shs.
conform with section 54(5) of the 250,000/=).
Land Registration Act. If a corporation fails to comply with the
Anyone can initiate the Act, each member of the board who is
conversion process. The registrar knowingly a party to the failure is guilty
can dispense with the original of an offence and shall be liable to a fine
title if the developer refuses to not exceeding Kenya Shillings two
surrender it for conversion. hundred and fifty thousand
No stamp duty required for (KES.250,000/=).
conversion, if it had already been
paid.
Section 20(6) provides that on a
need basis, there may be an
establishment of an Internal
Dispute Resolution Committee by
the Corporation. The Corporation
or a unit owner may apply to the
Court (Environment and Land
Court) to enforce the order of the
Committee. If a party is
dissatisfied with the
determination of a Committee,
then the party may appeal to the
Court. Appeals based on an error
of law may however be made to
any court under section 36(6) of
the New Act.
This has been repealed under It is necessary for purchasers to
Section 43 of the Act undertake due diligence and ensure no
charge is existing and if it does then
protect themselves from assuming the
liability unless that has been agreed by
the parties and entered in writing.
The requirement to disclose the In case such control is desired, the
amount of rent to be charged has developers should ensure to introduce
been repealed. this as a term under the lease or as a
Unit owners are however by-law of the Corporation.
required to give an undertaking
that they will be liable for
damages caused by the tenant.
The section has been repealed. This is particularly important because
developers can use the funds to
construct the units. Purchasers on the
other hand will have to invent ways to
protect themselves from possible
failure by the developer to complete
the construction of units.
Section 55- sectional status of a
building may be terminated by
unanimous resolution or an
application made to the court.
The Act has repealed termination
by applying to court. It has then
added termination by compulsory
acquisition and substantial or
total damage to the building.

COMMENTARY ON MAINTAINED PROVISIONS.

Section 10- The section simply provides that portions of a wall or floor or ceiling forming part of a
particular unit will only be the portions that cover the interior part of the unit. This ensures easy
compliance with section 9 of the Act when describing or geo-referencing units. There will also be no
disputes with respect to ownership of walls between two units owned by different persons.

Section 16(1)- Notably, apart from the easements created by the Sectional Properties Act 2020, the
section provides that the Corporation can make by-laws which can also provide for easements. The
section also provides that easements do not have to be on the title for them to take effect.

Section 21- The section provides that the corporation shall not have the power to undertake trading
activities. This is because it is a corporation established for the purposes of the Act (management of
the properties) and not to trade. The corporation has nothing to issue as securities to take or satisfy
a debt and cannot therefore trade.

Section 23(2)- The section serves to protect the interests of the chargee by providing that the
registrar shall not register any transfer in relation to a unit with an existing registered charge. It also
protects the interests of sub-lessees by providing that the registrar shall not register any transfer in
respect of a unit with an existing registered sub-lease or lease unless consent of the sub-lessee or
the lessee is given.

Section 27 ensures that the developer does not have to wait for all units to be sold for a corporation
to be established. This is so because once a unit or fifty percent of the units are sold, it is necessary
to have a corporation established which is statutorily mandated to make by-laws that will provide
for the management of the properties. Under the New Act, the corporation is also necessary to be
established as per the provision in to ensure any arising disputes between unit owners of the sold
units are settled conveniently.

Section 43 (1) (f) which requires the developer to disclose any charge over the premises to the
purchaser before selling the unit. This is to prevent a situation where the purchaser is unaware of
chargee’s interest and rights which may affect the purchaser’s interest.

Section 59 provides that the Cabinet Secretary may make regulations in respect of forms to be used
for the purposes of this Act including the form of certificates of title to units. As it stands, no forms
were prescribed in the previous regime of the Sectional Properties Act, 1987. Transactions under the
Act is likely to be effected using the Land Regulations Forms, 2017, with the long terms transfer (LRA
64) being adopted as the relevant transfer instruments.