PRE-CONTRACTUAL STAGE

A INITIAL CLIENT Take instructions Identify parties Need for independent advice –
INTERVIEW S 34 Advocates Act: no unqualified What type of transaction Spouse (Barclays Bank v
person may take instructions O’brien)
B POWER OF Def: instrument by which a person Conditions: Revocation
ATTORNEY appoints another to act for him, The POA must be: 1. Notice: issued to registrar
including dispositions of land 1. executed in prescribed form with
2. attested intention to revoke (Form
3. verified LRA 8)
4. registered 2. Interested party may apply
by notice in writing that is
has been revoked
3. Automatic: death, insanity,
bankruptcy, performance,
expiry of time
4. POA given for valuable
consideration is irrevocable
Parties: Types: NB:
principal (donor) and attorney done 1. General (Form LRA 5) An unregistered POA does not
2. Specific (Form LRA 6) take effect
NB: Donee must have capacity and be 3. Irrevocable (Form LRA 7)
of sound mind
C OTHER Estate Agent: Land Valuer:
PROFESSIONALS ● Identifies parties in a conveyance – vendor, ● Qualified under Valuers Act
IN THE purchaser, lender ● Role is to value property at current market rate
TRANSACTION ● Must be registered under Estate Agent’s Act - Important if financed by bank
● S 2(3) EAA expressly exempts advocates
Physical Planner Architect
● Qualified under Physical Planning Act ● Qualified under Architect and Quantity Surveyors
● Control subdivisions and developments within Act
local authorities ● Plan and design the project
Land Surveyors Quantity Surveyor
● Qualified under the Surveyors Act ● Qualified under the Surveyors Act
● Determine the boundaries and markings ● Determine the quantities and costs of matters, labor
and time of development
D INVESTIGATION Pre-Contract Enquiries Searches Requisitions
OF TITLE ● Preliminary issues 1. Historical Search ● Objections/queries after
● Touch on the physical condition of ● At Land Registry to establish personal of documents
Reasons: the land history/ownership e.g. description of
1. Caveat emptor ● Vendor only under obligation to ● Shows all transactions that have property
2. Bona fide disclose patent defects = been done since registration ● LSK Conditions 6.2 –
purchaser for ● Importance of physical 2. Official/Postal Search made 14 days after
value w/o inspection ● Submitted to Local registrar delivery of title docs
notice - Valuers and surveyors ● Conducts and issues certificate of ● If no objections –
3. Prudence - Look for patent and latent defects official search deemed to accept title
- Boundaries ● Reflect a true copy of land
Significance: - Who is in actual occupation? register
To identify : - NB: ensure good and marketable title ● Govt liable in case of fraud
1. Encumbrances 3. Personal Search
2. Who is the ● Inspect relevant register, parcel or
registered deed file available by Land
owner? Registry Staff
3. Title number 4. Digital Search
may be ● Via ecitizen platform
non-existent ● Will help establish rightful owner
4. Size of land not of property – whether any
same as that pending issues to ownership of
indicated by land
vendor ● Shows full name of owner,
approximate size of land, any
encumbrances
Additional searches Ndungu Land
Report, Survey, Valuer, Probate

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 CONTRACTUAL STAGE
A REQUIREMENTS OF Must be in writing
THE CONTRACT ● S 3 Law of Contract Act –
contract for the sale of land must
be written
● All ingredients of a valid contract
- Agreement only enforced of
there is meeting of minds
Execution and Attestation
● S 38 LA – must be executed
and attested by both parties
● Sale agreement is registered
under RDA
Drafts and Engrossment:
1. Vendors advocate prepares
draft and send to purchaser –
include the word “DRAFT”
2. Once approved, prepare the
legal document for execution.
It is then engrossed

B PARTS OF SALE 1. Parties 5. LSK Conditions/ 9. Registration 13. interest rate

AGREEMENT 2. Recitals General conditions 10. General Conditions 14. Arbitration clause
3. Property/Nature of 6. Encumbrances 11. Vacant possession 15. Special conditions
interest 7. Completion date 12. Breach clause NB: Execution and
4. Purchase Price 8. Registration - Notice - 21 days Attestation
- Forfeiture of deposit

C DEPOSITS Def: payment of purchaser before execution of K
- Part of agreed purchase price
● LSK Condition 5 implied term: 10% of purchase price
(does not include movables, livestock chattels etc.)
● Amount may be varied but not below 10%
Nature of Deposits:
1. Security for competition: binds purchaser – removes
fear of forfeiture + motive for completion.
2. Non-payment of deposit = fundamental breach. Vendor
may rescind contract upon notice
3. Counts as part of purchase price – on completion,
purchasers advocate should release deposit
4. Advocate may hold deposit as (i) stakeholder or (ii)
agent
Forfeiture: LSK Condition 4
● If breach of contract/unable to complete = deposit
forfeited to vendor (even if held as stakeholder)
● Vendor discharged by may opt for specific performance
(deposit would count)
D COMPLETION What is completion? Transfer of interest in property in
exchange for consideration
- Vendor: gives purchaser all registrable docs +
possession
- Purchaser: completely by paying balance of purchase
price
● Payment ordinarily made to vendors advocate
or estate agent
● LSK = payment made by bankers’ draft or
cheque
● Where > 1 million – should be made by RTGS
NB: non payment repudiates contract.
Capacity of the holder
● LSK Condition 5 – estate agent or advocate
holds as stakeholder.
- Agreement may provide it is advocate for
vendor
● As agent - hold deposit for vendor (whether
acting for either party) – upon vendors demand
– must release to him (unless agreement
states otherwise)
● A stakeholder - hold for both parties in trust:
- Pay vendor if sale completed
- Pay vendor if purchaser defaults
- Return to purchaser if vendor defaults
NB: liable to pay if funds mishandled.
Amount = client account – neither have claim on
interest unless in contract
Importance
1. Security for completion
2. Reduces burden of paying full purchase price
3. Symbiotic relationship with vendor
4. Purchaser has right over lien of property –
enforceable in court
“Time is of the Essence” clause = completion
date must be strictly adhered to
● Failure = fundamental breach and burdened
party may rescind contract or specific
performance
● If not stated, time becomes of the essence
once a completion notice is given – 21 days
(LSK Condition 4)

Date & Place of Completion Completion Notice – shall include:

● Can be expressly provided for in contract
● Where silent - should be a reasonable period. LSK
Condition 2: where not provided 42 days after date of
contract
● Place of completion is ordinarily the vendors advocate
chambers
● Time: 2pm
1. Outline breach
2. Demand rectification within notice period
3. Time for performance (21 days)
4. Further default = rescind upon expiry of notice
5. Aggrieved party is ready, willing and able to
complete

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 CONSENTS
COUNTY LAND ● The registrar shall not register an instrument unless satisfied than any consent required from County Management
MANAGEMENT Board given
BOARD ● Obtained after paying all outstanding land rates and rent
● Applicable to leasehold properties, not freehold properties

COUNTRY ● Physical and Land Use Planning Act S. 57-8: They grant development permission
EXECUTIVE ● Must notify public in manner told to in order to allow for objections
COMMITTEE
MEMBER
LAND CONTROL ● S. 6: Requirement for all land transactions involving agricultural land as defined in S.2 of the Land Control Act
BOARD and is in a land controlled area
⮚ Not within municipality or township
⮚ Legally declared to be agricultural land by CS
● The consent is granted by the local land Control Board on application by both parties to the transaction. The
application is made in a prescribed form and the consent is also issued in a prescribed form
● exempted if
⮚ the President so directs
⮚ it is a transmission or
⮚ gov is a party
● The application must be made within 6 months from the date of the transactions. Otherwise, the transaction is null
and void
Case law
● Nelson Githinji and others v Munene Irangi.
- No consent obtained
- Arbitration recommended court to order appellant to transfer to the respondent
- On appeal it was HELD, no consent = illegal award
● Mucheru v Mucheru: The COA held that is LCB consent is not obtained, the transaction becomes void

KENYA ● For any land adjacent to or adjoining the railway land,

RAILWAYS ● Required prior to any dealing on that land
● Often times there is a fee
● If a deed plan to a property reveals a railway line running through some parcels of land, this consent will be
required in addition to the LCB consent

KENYA ● Issued by airport owners for all properties which may be adjoining flight paths.
AIRPORTS ● Means to discover intention for the property
AUTHORITY ● A person will be given a questionnaire to fill in and must consult before doing anything on the land

TRUSTEES OF ● Properties adjoining or within parks

NATIONAL ● KWS is the trustee
PARKS
CHARGEE ● When there is a fixed charge
SPOUSAL ● S. 12 Matrimonial Property Act; no land transactions in matrimonial property without consent
CONSENT ● MP is property
i. acquired during the marriage (S. 2 LRA) and
ii. if a spouse obtains an interest during the marriage for co-ownership and use of both spouses (S. 93 LRA)
● s. 79(3) of the LA: A charge over matrimonial home is only valid if spousal consent has been given.
⮚ Charge instrument should be executed by chargor and the spouse or strong evidence to show
consent
COMMISSIONER ● Land Regulations 2017: If land is public land consent of National Land Commission required
OF LANDS
MINISTRY OF ● Land Regulations 2017, R21: If proprietor of leasehold wishes to transfer, sublease or create charge
LAND AND ● Form LA 13
PHYSICAL ● Accompanied by
PLANNING i. Rent clearance certificate?
ii. Proof of compliance with lease where applicable

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 PROFESSIONAL UNDERTAKING
DEFINITION
● Unequivocal promise, made by an
advocate to another who places
reliance on it and binds the advocate
Ingredients
1. Unequivocal intention
2. By advocate/another member
3. To another person
4. Places reliance on it
May be oral or written
PURPOSE LSK 13 Principles of PU
● Smoothen and hasten NB: know 5 and how to explain
process in conveyancing 1. Not honouring PU is prima facie evidence of
● “Bridge” – without it misconduct
transactions would never 2. Asking for PU in situations that do not ordinarily
be completed e.g. bank need PU is misconduct
would not release funds 3. Ambiguous PU is construed in favour of recipient
before charge registered, 4. Binding even though it is something out of his
vendor will also not give control
completion docs without 5. Advocate responsible even for PU by member of
funds. staff (Advocate or not)
6. If one Partner gives PU = binds other partners
regardless of type of partnership
7. No time frame for PU – ended only discharge

TYPES BREACH
1. Vendors advocate: do not release ● Professional misconduct
balance to vendor pending ● Enforceable as breach of
registration in favour of purchaser contract
2. Purchaser’s advocate: hold ● May sue advocates jointly
completion docs pending payment of or severally (in a firm)
purchase price
3. Lender’s advocate
i. Advance loan upon registration
of charge and transfer
ii. Pay amounts upon registration
of charge

DUTIES OF THE ADVOCATES

VENDORS ADVOCATE
STEP 1 ● Take instructions
● Confirm for conflict of interest (Kaplan & Stratton Advocates v Kings Woolen Mills)
● Payment
- Discuss advocate frees
- Pay the capital gains tax (5% of net profit)
STEP 2 ● Request for a copy of the title deed and the vendors ID.
● Carry out the searches
- Land registry out a search it will show you the owner, size of land and encumbrances).
- Registration of persons bureau - confirm the identity of the vendor.
STEP 3 ● Draft an appointment letter informing all the other parties including the purchaser that you are now acting on behalf of the
vendor.
● The appointment letter will lead the purchaser to ask you pre contract enquiries if any.
● Pre contract enquiries touch on the patent and latent defects of the land.
- Patent is on the face of it, latent is what you can see.
STEP 4 ● Draft a sale agreement and explain to the vendor.
● Send a copy of the sale agreement accompanied by a copy of the title deed and a copy of the vendor's ID to the purchaser's
advocate.
● Answer requisitions if any. These are questions strictly touching on title deeds.
● Receive an executed sale agreement from the purchaser's advocate together with the deposit.
- Remind the vendor that he now owes a duty of care to the purchasers as they have committed themselves. (Maintain the
status quo of the land.)
● Ask the vendor to deposit completion documents with you. Completion documents
o Original title deed
o Copy of ID/ Certificate of Incorporation of a Company
o KRA pin
o Rent and rates clearance certificate
o 3 passport size photos
o Consents if any are required e.g. spousal consent.
o Stamp duty valuation form.
STEP 5 ● Have the vendor execute the sale agreement and send it back to the purchaser's advocate.
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 ● You will then receive a transferred document from the purchaser advocate for your perusal and engrossment (stamp) and
send it back.
NB - no party executes the transfer document at this point this is only done when the full payment has been made.
STEP 6 Completion Notice
● prepare completed notice informing the purchaser you are ready with the completion documents to complete the transaction
STEP 7 Completion Day
● The completion venue is at the vendors advocate chambers in which you will receive the balance of the purchased price.
● Then have the vendor sign the transfer document and hand it over together with the completion documents to the
purchaser’s advocates.
STEP 8 With the vendors consent
- pay any money due to the transaction eg valuers, estate agents etc
- You will pay yourself the agreed amount.
● Hand over the balance to the vendor and remind him to pay CGT.

PURCHASERS ADVOCATE
A. WHERE THE PURCHASER HAS THE FULL B. WHERE THE PURCHASER IS C. PURCHASE OF CHARGED
AMOUNT BEING FINANCED LAND
STEP 1 ● Take instructions
● Confirm for conflict of interest (Kaplan &
Stratton Advocates v Kings Woolen Mills)
● Payment
- Discuss advocate frees
- Pay the necessary stamp duty (2% rural
area, 4% urban area)
STEP 2 ● Draft appointment notice notifying all parties
you will be acting on behalf of the vendor
● Draft any pre contract enquiries
STEP 3 ● Receive a copy of the sale agreement + copy
of the certificate of title/lease + vendors
ID/cert of incorporation
● With docs provided - conduct searches
- Land registry
- Bureau of persons
- Companies’ registry
● Forward any requestions to vendors
advocates
STEP 4 ● If satisfied with answer to requisitions –
instruct purchaser to execute the sale
agreement + pay the deposit (10%)
● send executed sale agreement + deposit slip
to the vendors advocate – remind them that
they owe you a duty to care to hold it in trust
STEP 5 ● draft the transfer document + sent it to Draft a PU and issue to vendors Financier’s advocate will draft 2 PU’S
vendors advocate for approval advocate – request release of 1. one PU to the charge holder (the
● in exchange you will receive the executed completion docs for purchaser to other bank) requesting for
sale agreement by the vendor register transfer + charge in favour of
bank to which the vendor will receive completion documents and a
payment discharge so as to enable the
register the transfer in favour of
the purchaser/borrower and a
charge in favour of the financier
after which will the charge holder
will receive whatever amount is
due to them.
2. The financiers advocate will draft
a second PU and send it to the
vendor/owner of the land
assuring him that after the
successful registration of the
transfer and charge they will
receive whatever amount is due
to them.

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STEP 6 Completion Notice After registering the transfer + charge, After registering the transfer + charge,
● prepare completed notice informing the draft a bank report informing bank draft a bank report informing bank
vendor you are ready with the balance of the that a transfer has been registered in that a transfer has been registered in
purchase price to complete the transaction favour of the purchase and they may favour of the purchase and they may
now release the money now release the money
STEP 7 Completion Day ● After money has been released ● After money has been released
● having paid the balance of the purchase price to the vendor’s advocate, your to the vendor’s advocate, your
– take deposit slip to chambers of the vendors request for discharge from the request for discharge from the
advocate
● Receive executed transfer document + all professional undertaking. professional undertaking.
completion documents ● Request for your payment Request for your payment
STEP 8 Registration of the transfer
● Purchasers’ advocate’s duty to register the
transfer
● Will do so by paying stamp duty indicated in
the valuation form
● Lodge completion documents with the
Registrar for registration
● Ask for advocate fees after registration

NB: Confirm registration

B. Two weeks after registration – look in the
Registry to see whether title reads client’s
name
C. If not, lodge a complaint

CAN AN ADVOCATE ACT FOR BOTH PARTIES?

GENERAL ● one should avoid acting for both vendor and purchaser where there is a conflict of interest or where such a conflict is likely
RULE to arise.
NB: both parties must consent to the advocate acting for both
AUTHROITY King Woollen Mills & Another vs Kaplan & Stratton Advocates
● the law firm had acted for both the borrower and the lender in a borrowing transaction,
- prepared all the relevant documents including the security documents.
- borrower defaulted on payment and the question of the validity of the security documents arose.
- Kaplan purported to enforce the said security and the appellant sought a grant of injunction to stop the firm
● Held: CA stated that since kaplan was aware that there was likely to arise a conflict between the lender and the borrower
and since having acted for both parties they were in a position to be privy to information pertaining to the appellants case
they could not purport to enforce the said securities to the prejudice of the appellants

TRANSFER
DEFINITION S 2 LA & Passing of land lease or charge from one party to another by an act of the parties and not by operation
LRA
Transfer includes conveyance, assignment, transfer of land, lease or other instrument used in disposition
of an interest in land
S 43 LA NB: interests capable of being transferred: (Land (freehold + leasehold), Lease, Charge.
S 27 & 37
LRA + S Effecting a transfer involves:
43 LA i. Consideration
ii. Instrument in the prescribed form
iii. Registration of the transferee as the proprietor of land/lease/charge

REGISTRATION S 44 LA ● Transfer is to be effected by an instrument in the prescribed form

OF A S 43 ● Completion of the transfer process is only after registration at the land registry
TRANSFER LRA ● Transfers are only effective upon registration
● transfer takes effect immediately upon registration (not on fulfilment of future condition)
● other documents required when effecting transfer include:
S 44 - Copy of ID/Passport
LRA - 3 colour passport size photographs
- KRA Pin
- Consents
- Rent/rates certificates **
- Marriage certificate (where applicable)
- Certificate of incorporation + board resolution (where applicable)
PARTS OF A 1. General parts ● Preliminary details
TRANSFER ▪ Dates
INTRUMENT ▪ parties

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 NB:
- requirement for stamp duty within 30 days of execution + registration from 3
months of the date of the instrument
- Transfer is usually left undated until parties are ready to execute
2. Operative/recital ● History/background of the transaction – e.g. how vendor became the owner
● Details on change of existing affairs
1. Testatum ● Consideration (purchase price)
● Receipt - acknowledgement of consideration
● Transfer/grant of interest in land
● Description of the property
● Quantum of interest granted (habendum)
● Exceptions/reservations
4. Miscellaneous Implied covenants under the Land Act
provisions
2. Final Part a. Execution
b. Attestation
c. Name/address of advocate who prepared the instrument (S 35 Advocates Act)
TRANSFER OF S 45 LA & ● When transferring lease, there is a warranty that rent, agreements and conditions in lease have been
LEASE S 71 LRA met by the transferor on the transferred date
● Conditions will be met by the transferee

● Transferee becomes the lessee once it has been registered

S 72 LRA

TRANSFER OF S 86 (1) ● Chargor or interested person may request the Chargee to transfer the charge to a person named in
CHARGE LA the request
● Chargor’s consent to transfer the charge is required – if charge instrument expressly or impliedly says
S 87 LA so

PRESCRIBED FORMS FOR TRANSFER INTEREST TRASNFERRED

LRA 33 Transfer of instrument - Freehold

LRA 35 Transfer of undivided share (tenant in common
LRA 35 Transfer of joint interest
LRA 57 Transfer of charge
LRA 63 Transfer of instrument - Leasehold

GIFTS (TRANSFERS WITHOUT CONSIDERATION)

DEFINITION ● requirement of consideration is a requirement for a contract to be valid.
● However, - exception to this rule where the consideration is not valuable (i.e. no actual money has been paid)
GOVERNING S 27(2) LRA
LAW ● a contract for a disposition of an interest in land that has no valuable consideration will have the same effect as a
transfer with valuable consideration
REQUIREMENTS ● transfer without consideration is only applicable for transfers to:
i. To oneself e.g. where there has been a change of name;
ii. To one’s spouse.
iii. To one’s beneficiaries; and
iv. When the transfer is a gift
​ • For transfer of land as a gift to be exempt from the requirement of consideration, the gift must be
accepted by the donee (recipient) during the lifetime of the donor (giver).
​ • The transfer of land as a gift must be effected by a registered instrument + the donor must comply
with all the statutory requirements relating to the transfer, e.g. obtaining of LCB Consent where
necessary

TRANSMISSIONS (INVOLUNTARY TRANSFERS)

DEFINITION ● S 2 LA & S 2 LRA: Passing of land, lease or charge from one person to another by operation of the law on death,
insolvency or otherwise

D. BANKRUPTCY
GOVERNING Land Act – S 52 LRA – S 63 Insolvency Act
LAW
PROCEDURE 1. Produce to the Registrar a certified copy of the order adjudicating a proprietor bankrupt
2. Copy of the order shall be filed with the registrar
3. The Trustee of bankruptcy shall be registered as the proprietor of any land, lease of charge of the bankrupt
4. if an adjudication order is made, the property the passes to the bankruptcy trustee for distribution among creditors
5. transfer to the bankruptcy trustee is effected through the registration of the adjudication order by the registrar
2. if the debtor dies insolvent, personal representatives follow the same process

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 E. COMPANY LIQUIDATION
GOVERNING Land Act – S 54 LRA – S 64 Companies Act Insolvency Act
LAW
PROCEDURE 1. Registrar shall present resolution/order appointing liquidator which he enters into the register
2. Instruments lodged for registration shall be sealed with the company’s seal + attested by the liquidator

F. VESTING ORDERS
DEFINITION ● Court order which creates or transfers legal ownership of a property in place of a legal conveyance
GOVERNING Trustees Act – S 45
LAW ● It is executed by the judge who makes the order
NB: Magistrate’s Court do not have jurisdiction
JUDGE’S 1. Sale/purchase of land
JURISDICTION: 2. Charge created
ORDERS 3. Transfer of land held in trust where the trust has failed to exercise its duty
4. Specific performance for vendor who refuses to sign

G. DEATH
SOLE S 50 LA 1. The executor/administrator shall obtain a grant of probate
PROPRIETOR/TENANTS 2. Shall apply to the registrar in the prescribed form and produce the grant
IN COMMON S 61(1) LRA 3. They will them be registered by the transmission as the proprietor OR
4. Transfer by him directly to a third party without requiring his registration as proprietor
JOINT PROPRIETORS S 49 LA 2. Property automatically passes to the surviving partners
3. One of the joint tenants of any land, lease or charges dies, the Registrar shall upon proof
S 60 LRA of death delete the name of the deceased from the register

H. ADVERSE POSSESION
DEFINITION ● Situation where a person takes possession of land and asserts rights over it
● Person having title omits or neglects to take possession
GOVERNING Limitation S 7 – action may not be brought by any person to recover land after 12 years from the date which action
LAW s of accrued
Actions S 17 – after 12 years – title of the property holder is extinguished
Act S 37 – if unregistered land – title is not extinguished but held by registered proprietor in trust for person who
has acquired title against anyone as the registered proprietor
S 38 - where person claims to have become entitled by adverse possession may apply to the High Court to
be registered as the proprietor of that land until he obtains a vesting order
PROCEDURE REQUIREMENTS: Order 37, Rule 7(1) CPR
1. open and notorious use 1. Application under s 38 Limitation of Actions Act is
2. intention to possess made by Originating Summons.
3. continuous use 2. Supporting affidavit + certified extract of the title of
4. exclusive use - to the exclusion of the owner; land in question annexed
5. actual possession 3. Court shall director on whom and what manner
6. non permissive, hostile/adverse - without the owner’s summons shall be served
permission and inconsistent whit his rights.

I. COMPULSORY ACQUISITION
DEFINITION ● Power of the govt to acquire rights of a parcel of land, without the consent of the owners/occupants for public interest
● National Land Commission deals with compulsory acquisition
GOVERNING Constitution of Kenya 2010 Land Act
LAW Art 40 (3) – Sections 107 – 133
● government may limit right to own property for a public ● S 132: compulsory acquisition transactions are exempt
interest/ reason from Stamp Duty.
● must be prompt payment in full of just compensation
STAGES PRE 1. Preliminary Notice – S 107(1)
-INQUIR ● NLC receives request for acquisition from acquiring body
Y ● Request is authored by either the CS or County Executive Member e.g., Ministry of Roads
2. Preliminary Requirements – S 107(2)
● NLC requires comprehensive list of the parcel of land (title + cadastral maps) of affected areas,
resettlement plan + list of persons affected
● Compensation shall address rights of all persons in an equitable manner
3. Notice of Intention to Acquire – S 107 (5)
● Published in Kenya gazette after Commission certifies in writing that land is required for public purposes
● Upon certification – Commission publishes Notice of Intent and delivers a copy of the notice to the
Registrar and every person with interest in the land
4. Ascertainment of Suitability of land (Survey) – S 108
All land to be acquired shall be authenticated by the authority responsible for Survey at both National and
County Government level.

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 INQUIRY 1. Notice of Inquiry – S 112 (1)
● NCL shall appoint a date of inquiry – at least 30 days after publishing notice of intention to acquire + at
least 15 days before actual day of inquiry
● Copy of notice is served on every person who has interest in the land
2. Receipt of claim – S 112 (2)
● Any written claim for compensation deliverer to NLC not later than date of inquiry
Inquiry determines who has an interest
3. Powers of the Commission: Hearing – S 112 (5)
i. Summon and examine witnesses
ii. Administer oaths and affirmations
iii. Compel production and delivery of title docs to NLC
POST 4. Awards of Compensation – S 113 & 114
INQUIRY ● Upon conclusion of inquiry: NLC shall make separate award for compensation on every person
determined to have an interest in land
● NLC shall serve on every person a notice of the awarded and offer compensation
5. Land in Lieu of compensation – S 114 (2)
● Possible where the value of the land is commensurate with the award
● Such award shall be deemed to be the conclusive compensation which the person is entitled to
6. Payment of compensation – S 115, 118
● Payment is promptly settled upon the exercise of due diligence – includes final survey and determination
of acreage, boundaries, ownership and value
● If award is not accepted/ disputed – amount is paid into a special compensation account held by NLC
7. Payment of interest – S 117 (2)
● Additional compensation is payable at the prevailing lending rate by the CBK from the time of taking
possession
8. Taking possession – S 120 & 121
● Only after the award made + amount paid shall the NLC take possession by serving a notice on every
person of the specified day of possession – includes registered proprietor + Registrar
● Upon taking possession the land shall vest in the National/County Govt absolutely and free from all
encumbrances

LEASES
Def: this is the exclusive possession of a defined premises for a defined time period. The three elements to discuss are
1. Exclusive possession: should be to the exclusion of the landlord (Street v Mountford)
2. Defined premises: the lease agreement should be specific as to which property is being leased to determine the area to
which the lessee is entitled to exercise exclusive possession
- Whole of part of the land can be leased as per s. 56 and so it is important to have an accurate description
3. Defined period of time: the agreement should clearly state the definite term the lease will last for . For subleases, the
lease cannot last longer than the first lessee’s lease

CONSIDERATIONS BEFORE THE AGREEMENT STEPS WHEN ENTERING A LEASE

Tenant Landlord
Due Diligence Due Diligence Step 1: ● Provides the terms the ● Should include
1. Investigate the title 1. If the tenant will be Agreeing to whole agreement will 1. Repairs and
2. Determine if the lessor/agent able to pay e.g., has the Head of be based on insurance
has the power to lease as per a job terms ● The deal breakers and 2. Payment of
S. 56 2. Search at the makers for both parties
3. Doing a search at the land registration of ● Must include outgoings e.g.,
registry person bureau 1. Description of the rent and rates
4. Search the registration of 3. Search at the property 3. Additional security
person bureau company registrar if 2. The portion to be and deposits
5. Search at the company the tenant is a leased 4. The fixed period
registry if the landlord is a company 3. Rent to be paid
company 4. How tenant can use
the property
Will the property serve the purpose Will the property meet Step 2: Due Each party must conduct their own due diligence to
they wish to use it for? E.g. the needs to the tenant Diligence ensure that things are up to standard e.g.
1. Amenities specified e.g. , 1. Rates and rents
2. Security 1. How long is the 2. If the person or company is registered
defined period? The considerations mentioned above
2. How often will they
pay?
Can they use the property freely? Will they have any Step 3: Negotiate Terms that both parties will be content with
e.g. make alterations, sublease restrictions as to how Negotiations
the property can be Step 4: Execute the terms as appropriate
used e.g., no subletting Execution

8
 Step 5: The advocate of the lessee must
Registration 1. Pay stamp duty
2. Register the lease
N.B a lease < 2yrs is not registered

TYPES OF LEASE (S. TERMINATION (SNEFF) IMPLIED COVENANTS POWERS REMEDIES AND RELIEFS
55 TO 61)
Periodic Lease (s. 57) SURRENDER LESSEE (s. 66) LESSOR LESSOR
1. <2 years ● Implied e.g., vacating without ● Pay rent in the ● Terminate S. 73 Right to forfeiture
2. Is not registered notifying lessor OR manner specified the lease Entitled if
3. They may be ● Express if the lessee signs a ● Use the land in a by notice ● Condition or covenant
weekly, monthly, termination agreement suitable manner ● Enter the breached
stating surrender of the lease and in accordance property ● Lessee adjudged
quarterly, or with lease to inspect bankrupt
yearly ● Return property in or to Can be exercised by
4. Can be the same state repair ● Entering and
terminated with ● Keep property in after possessing property
no notice state of repair giving ● Claim in court
5. No agreement in ● Keep all boundary 7-day Notice (S. 74)
writing required marks in repair notice ● Has to serve a notice
of not less than 30
Fixed Period Lease NOTICE days
1. >2 years ● Must be served and during ● Has to specify breach,
working hours time to remedy and
2. Must be
● States the lessor wants the forfeiture if not
registered remedied
3. The period in lessee to vacate within a
certain time e.g., 30 days ● If non payment, the
the lease is fixed rent is still owed after
in the but the lessor must
agreement give 30 days for the
situation to be
Tenants at sufferance (S. EXPIRY OF TIME LESSOR (S. 65) remedied on top of the
60) ● At the end of the lease’s ● Let lessee enjoy 30 day notice
● If at the expiry of the term, it automatically quiet possession
lease and the lessee terminates unless it becomes unless they breach
is still in possession a tenancy at sufferance condition or
● The lease becomes
a periodic lease if the covenant
lessor accepts rent ● Not to use or permit
for more than use of adjoining
2months neighbouring land in
Tenants at will FORFEITURE a way that render LESSEE
● Opposite of tenant at ● If the lessee breaches a the property unfit for Relief against Forfeiture
sufferance covenant or condition purpose ● Apply for court for relief
● The lessor allows the ● Right of lessor
● To ensure all Unlawful Eviction
tenant to take ● Forfeiture notice must
possession before include common areas are ● If at the start of the
commencement of a) The covenant or in state of repair lease the lessor
the lease breached ● Ensure the doesn’t allow lessee to
b) Requirement to remedy accommodation is have passion, the latter
breach in specified fit for human can go to court
time cohabitation
c) Failure to remedy =
● In frustration, they
forfeit
Future Lease (s. 61) FRUSTRATION (S. 65(1)(e)) should repair in 6
● Commencement = ● If the leased property is months
future event e.g. damaged wholly or partially by ● Pay all rates and
succession or things out of the control of not taxed payable
subdivision parties rendering it not fit for unless stated
● Has to come into purpose otherwise
effect at least 21 ● The lessor has 6 months to
years after the repair it and the lessee doesn’t
agreement pay rent
If the lease > 5yrs, it ● If the lessor can’t fix it the
should be registered to lessee can terminate the lease
be in effect Issues 30-day notice

9
 SUBLEASE
Origin Procedure
- There was a shortage/decrease of land as a resource - Take instructions
- Based on idea that several interest of property can exist in one parcel of - Discuss payment: fees and CGT
land - Request copy of the title deed and do due
- Banks/financial institutions had issues as sublease holder doesn’t have diligence
reversionary interests and mother title - Register a management company – like normal
Reason for formation of management company company with MOA, AOA etc.
- To hold and renew reversionary interest ⮚ The shares will be based on the number
- To maintain and repair common areas e.g. the gym, pool, parking space of sub-lease units e.g. 20 units with a
etc. nominal share of 100 means 1 unit = 5
- Pay outgoings e.g. rent and rates ordinary shares i.e. the valuation of 5
Operation of the management committee ordinary shares is the purchase price of a
- It must have a director(s) who are advocates single unit
- The directors can be members or independent persons - After registration, transfer 1 or 2 units
- Is funded from service charge paid by the members on a monthly or annual ⮚ Client become member of management
basis company
Completion Documents ⮚ Ensures he will transfer reversionary
1. Certified copy of the head/mother title interest after receiving full purchase price
2. Duly registered original sub lease in favour of the purchaser - Advertise units for sale
3. Original share certificate in respect of the purchasers one share in the ⮚ Prepare sub-lease documents
management company ⮚ Letter of offer for interested buyers
4. Certified copies of payment receipts of any outgoings stating
5. Duly registered charge in favour of the financier where applicable 1. Purchase price
6. Original stamp duty receipt on sub lease or the charge where applicable 2. Mode of payment
7. Certified copies of 3. Period of payment
1. Architect certificate of completion 4. Details of property
2. Certificate of occupation (you get it from the county - If the buyer is happy, they sign the letter
authorities) - Then issue them sale agreement (also acts as
3. Copies of consent to sublease from the owner transfer)
4. MOA/AOA of the management company - Payment made and after register the sublease
5. NEMA approvals against mother title
- After sale of all units and purchase price met,
NB - in some sublease there is a concept of defects liability clause which request owner to transfer mother title and his
provides that if any defects arise within a period of 6 months after the sale, the shares to the management company (transfer of
developer shall be liable to do the repairs. reversionary interest)
N.B, if purchaser is being financed, their advocate will
do a PU to the developer requesting a sub lease be
registered in favour of their client + charge and the
money will be forwarded after.

SECTIONAL PROPERTY
Origin Creation
- Banks and financial institutions resisted their existence ● A sectional plan is prepared by a licensed surveyor
because they felt one can only create a sub-lease if they have ● Consent from Local Authority
access to the mother title ● It is registered by the Registrar of land not Registrar of titles
- Sectional property is the solution as building divided into units ● S. 4 of the SPA, the plan must prescribe two or more units
- Each apartment/flat/subdivision can be registered and have its that the plan will be divided into.
own title ● Sectional Plan must be presented in quadruplet and
- Under the Sectional Property Act, the substantive law is RLA accompanied by
⮚ Properties under GLA or RTA changed to RLA ⮚ List of owners of units
- After registration of sectional plan, the act states a body ⮚ Application for registration of the corporation
corporate is formed (S. 17) to manage the properties ● After registration, the registrar will close down the register for
⮚ Similar to management company in sublease but this the mother title (file) and open a separate register for each
one is automatic unit.
- Applies to both freehold and leasehold ● The register for each unit will contain
Reasons for shares o A description of the unit
- The name of the company is usually the owners sectional land o Share apportioned to the owner
number o Any encumbrances attached
- By laws drawn by shareholders stating how to run the ● Each unit will be then issued with a sectional title which is as
good as any title deed
sectional properties
- The cooperation is controlled by the institution manager- must
be lawyer, accountant, or registered estate agent

10
 CHARGES
Def: interest in land securing payment of money or money’s worth or fulfilment of any condition (S 2 LA)
● If date of repayment not specified = payable after 3 months of written demand
● Perfection = charge is completed by registration as encumbrance
● Will not be registered until rate + rent clearance certificate
PROCESS:
A. WHERE THE CHARGOR IS THE OWNER OF THE LAND. B. WHERE BORROWER IS PURCHASING
CHARGESD PROPERTY AND WANTS TO USE
TITLE OF THAT LAND AS SECURITY
Step 1 Borrower goes to bank to seek financial assistance and see Borrower goes to bank to seek financial assistance and
products on offer see products on offer

Step 2 Borrower fills app for financial assistance Borrower fills app for financial assistance

Step 3 ● Bank receives app + conduct due diligence: ● Bank receives app + conduct due diligence:
i. Valuation of property i. Valuation of property
ii. Credit assessment ii. Credit assessment
iii. CRB Listing iii. CRB Listing
● Before valuation – conduct a search of the land ● Before valuation – conduct a search of the land
● To assist valuation they will ask for: ● To assist valuation they will ask for:
i. Copy of ID i. Copy of ID
ii. Bank Statement ii. Bank Statement
iii. Salary slip iii. Salary slip
iv. Copy of title deed iv. Copy of title deed
v. Rent + rates clearance certificates v. Rent + rates clearance certificates

Step 4 ● If satisfied with result of search + valuation = Letter of offer ● If satisfied with result of search + valuation = Letter of
(contract between bank and borrower) offer
(contract between bank and borrower)
Contents of letter:
1. Facility to be advanced (amount lent) Contents of letter:
2. Purpose of loan 1. Facility to be advanced (amount lent)
3. Repayment terms 2. Purpose of loan
4. Interest rate 3. Repayment terms
5. Default clause in case of non-payment 4. Interest rate
5. Default clause in case of non-payment
NB: Borrower pays:
i. Valuation fees NB: Borrower pays:
ii. Stamp duty i. Valuation fees
iii. Legal fees ii. Stamp duty
iii. Legal fees

11
Step 5 ● Borrower consents + execute letter of offer ● Borrower consents + execute letter of offer
● Hand it back + completion docs ● Hand it back + completion docs
● Charge instrument drawn up ● Charge instrument drawn up

Contents of charge Contents of charge

1. Details of parties – names + addresses 1. Details of parties – names + addresses
2. Loan amount secured 2. Loan amount secured
3. Continuing security clause 3. Continuing security clause
4. Repayment period 4. Repayment period
5. Interest rate 5. Interest rate
6. Repayment mode (covenant to repay) 6. Repayment mode (covenant to repay)
7. Particulars to be charged 7. Particulars to be charged
8. Charging clause (nature of security created) 8. Charging clause (nature of security created)

Step 6 Charge instrument sent to borrow/advocate for execution
Step 7 ● After execution, lenders advocate pays stamp duty and
registers charge
Prepare bank report informing bank that charge has been
registered in their favour and can release money
Step 8 ● After principal amount paid, it’s not bank job to discharge
● Borrower will request lenders advocate to draft discharge
letter/fill form
● Pay stamp duty + register discharge against title
NB: 3rd process: person not owner but wants to use title as security (3rd party charge - not often examined)
Charge instrument sent to borrow/advocate for execution
● Borrowers advocate draft’s 2 PU’s
1. To bank: with completion docs + request them to
sign discharge to borrower’s bank after which
they will receive money due
2. Vendor/seller: confirm they will receive money
after successful registration of the charge
● After receiving completion docs + discharge form –
proceed to pay stamp duty (0.5 %) and register
discharge
● Lender’s advocate will pay stamp duty (1%) and
register charge + prepare bank report informing bank
charge has been registered and release money to the
vendor

DUTIES OF THE ADVOCATES

Duties of the Borrowers Advocate Duties of the Lenders Advocate Docs to draft:

1. Discuss about the offer and advise your client on 1. Advise the bank on the appropriate 1. Appointment letter
effects of the security. security; Informal vs formal charge. 2. Letter of Offer
2. Obtain all consents and clearances after receiving a 2. Due diligence: - contract between
suitable PU from the financier. i. Proper investigation of title borrower and lender
3. Obtain original title from client after receiving a ii. Confirm the capacity of chargor 3. Charge instrument
suitable PU from the financier. 3. Draft charge an send to borrower‘s - secures interest of
4. Explain the contents of charge instrument to your advocates for approval lender + perfects
client. 4. Confirm and ensure execution and security
5. Obtain adequate funds from your client for stamping. attestation- Is Advocate qualified? Ndolo Ayah 4. Bank report
case - informs bank that
5. Pay stamp duty (obtain from the borrower) interest is registered and
6. Registration Lodge for registration at lands can releasee money
registry and companies’ registry 5. PU
7. Prepare bank report indicating registration of 7. Discharge of PU
charge + advise bank to release funds 8. Discharge of charge
8. Discharge of PU necessary letter
9. Obtain loan proceeds from chargee for - borrower has cleared
onward transmission to the chargor interest + payment

STATUTORY PROVISIONS – LAND ACT

TYPES OF CHARGES
FORMAL CHARGES INFORMAL CHARGES
S 56 ● Only takes effect once registered by prescribed Registrar S 79 ● Owner of private land my in prescribed form
● Chargee cannot exercise remedies until registered charge whole or part of interest to secure payment
or future debt
S 80 ● Charge = security only and does not transfer any Creation:
interest/right to charge 1. Chargee accepts written and witnesses doc with
● Chargee has remedies in case of default clear intention of charging land
2. Chargor deposits:
Contents of a charge: i. Certificate if title
1. Terms and conditions of charge ii. Document of lease
2. Explanation of consequences of default iii. Any doc agreed by the parties
3. Relief of charger – including right of sale

12
S 81 Priority of Charges: Rights
● Accordance with how they are registered ● Chargee with informal charge may not possess/sell
● Informal = how they were made land whose docs have been deposited by Court
● Formal charge has priority over informal order
S 82 Tacking
● Chargee make provision to give further advances on credit
to chargor
● Further advancement
NB: no right to tack, must be in the agreement

S 83 Consolidation
● Unless an express provision, a chargor who has more than
one charge with single chargee may discharge any of the
charges without having to redeem all
S 84 Variation of interest
● If contractually agreed that interest can be varies – reduced
or increased by 30 day notice by chargor to charge setting
out clearly new interest rate

DUTIES AND RIGHTS OF THE CHARGOR

IMPLIED COVENANTS OF THE CHARGOR RIGHTS OF THE CHARGOR
S ● Pay principal money – day in charge instrument + interest S Right to discharge
88 on unpaid money 85 ● Upon payment of all money secured + observing all
● Pay rates rents and all outgoings at times payable T&Cs – charge entitled to discharge anytime before
● Repair and maintain all buildings on charges land land sold
● Insurance available to cover any loss or damage – fire or ● Exercised by:
other factors ● 30 day notice of discharge
- Taken out in name of chargor + chargee ● Pay not more than 1 month interest payable
● No leases/sublease for greater than 1 year without ● Pay all money secured
Chargee consent
● No transfer/assignment without consent in writing
● If lease charged – observe all covenants and conditions
S Equity of redemption
89 ● Right to redeem property on payment of money
+interest
● Chargee not entitled to:
- Enter into possession
- Receive rent/profits (because of default)
- Performance on any covenant or provision in
accordance with at

REMEDIES OF THE CHARGEE

S 90 NOTICE S 94 POSSESSION
● If Chargor defaults on any of his obligations (payment of ● After prescribed period, Chargee may serve notice
money, interest or covenants) Chargee may service notice to enter possession not less than 30 days after
in writing service
● May be exercised peaceably or forcibly
Contents of Notice Possession = date of entry into possession or
1. Nature and extend od default receiving rent/profit from land
2. If non-payment – amount to be paid to rectify default –
not less than90 days (3 months)
3. If breach of covenant/condition – stop doing default and
time to rectify not less than 60 days (2 months)
4. Consequence if default not rectified – can exercise
remedies
S 91 ACTION FOR MONEY S 96 POWER OF SALE
● Chargee may sue for action for money where: ● Where notice has expired + chargor is still in
i. Chargor personally bound to replay default
ii. Security insufficient + chargor given reasonable time ● Service chargor 40 day notice. (cannot sell until
to provide sufficient security and failure 40 days elapse)
iii. Wrongful act of Chargor = deprives security ● Notice service on
NB: court can order postponement until other remedies i. Commissioner (if public land)
exhausted ii. Holder of land
iii. Any lessee/sublessee
iv. Spouse who consented
v. Co-owner
vi. Guarantor
Any person who has right to use (licensee)

13
S 92 APPOINTMENT OF RECEIVER S 97 DUTY OF CHARGEE EXERCISING POWER OF
● Implied condition = chargee has power to appoint receiver SALE
after 30 day notice ● Power or through court order = duty of care to
vii. appointed in writing by chargee obtain best price reasonable at time of sale
● Before sale, must ensure valuation undertaken by
valuer
● Sale cannot be below 25% market value
If not = rebuttable presumption of breach of duty.
Chargor can apply for sale to be declared void
S 93 LEASING S APPLICATION OF PROCEEDS OF SALE OF
● Unless otherwise stated, Chargee who has appointed 101 CHARGED LAND
receiver may lease property after 30 day notice ● Any money received in following priority:
● Every lease shall take effect no later than 6 months after 1. Rents, rates, charges owing
date, reasonable rent and not longer than 15 years 2. Discharge of any prior charge on property
3. Costs and reasonable expenses incurred
4. Discharge of sum advanced under charge ,
outstanding amount, interest, costs
Any subsequent charge in order of priority

REMEDIES OF THE CHARGOR (after power of sale)

S DISCHARGE ON PAYMENT OF ANY TIME DUE BEFORE S103 APPLICATION FOR RELIEF
102 SALE ● Application may be made by:
● Any time before land sold – chargor or any person entitled i. Chargor
to discharge may discharge in part or whole by pay all ii. Joint owner
money due to charge iii. Spouse
● Chargee shall deliver discharge over whole or part of iv. Lessee
property + all documents held Nb: Application is not to be taken as admission that
i. There was a breach of covenant by chargor
ii. By reasons of breach that he has the right to
exercise remedy
iii. All notices were served properly

AUCTIONS
Def: sale to highest bidder at fall of the hammer How is an auction done? Laws:
● May be public or private (limited group invited) 1. Execution of Court Order 1. Auctioneers Act
● Bid (offer) – becomes a contract through the fall of the hammer 2. Statutory power of sale 2. Civil Procedure Act
(acceptance) 3. Law of Contract
● sale of land usually by private treaty or public auction to
highest bidder
CHARACTERISTICS CONDITIONS
● Reserve price – value of prop at time of auction ● Auctioneer must be licensed by Auctioneers Board
● Bid is an offer – can be withdrawn at any time until ● Must hold valid practicing cert
acceptance (esp. where reserve price not met) Auction advertisement
● Auctioneer can reject any bid that doesn’t = reserve price. If i. Place, date, time of auction advertised in local paper
not met, auction is withdrawn ii. Sale must take place unless cancelled by notice
● Seller under duty to act in utmost good faith – must account to iii. Indicate reserve price
Chargor any amount higher than debt. ● Property must be sold to highest bidder
DUTIES OF AN ADVOCATE FOR PROSPECTIVE PURCHASER DUTIES OF ADVOCATE FOR SELLER IN ACTION
1. Conduct a search – ‘caveat emptor’ – raise all relevant 1. Act in Good faith
questions from search 2. Ensure Property fetches good price
2. Enquiries whether any pending matters in court 3. Ensure proper procedure once bid is made
3. Engage Surveyor + valuer to advise on property 4. After receiving 30-40%
4. Advise client they will have to pay 30-40% on fall of hammer
5. Advise client to be ready to pay balance within 60-90 days so
they do not lose deposit
ADVANTAGES OF AUCTIONS DISADVANTAGES OF AUCTIONS
1. Bad root of title may be disposed of title 1. Can be costly – hiring auctioneers, advertisements
2. Involves many parties 2. Price may not reflect market value
3. Purchaser has little time to consider terms + impose conditions
4. Prone to be challenged by Chargor if procedure not followed

OTHER PURCHASE AGREEMENTS

14
COMMERCIAL PROPERTIES FOR DEVELOPMENT
- Ensure all consents approved e.g. development permission from
local authority
- Be aware of protected tenants
- Change of user is a condition in the agreement
Change of user
- The government controls land use and development
- With some property, there are restrictions as to how the proprietor
may use it if the use has clearly been stated eg. Residential,
industrial, commercial etc.
- If the new owner wishes to use the property in a different way
than the use stated in the title, they must apply for change of user
- Make an application through a registered physical planner to the
respective county Government’s Department of Physical Planning
Procedure
- Advertisement of the proposal in two local newspaper to obtain
recommendations from the public
- Apply for change of user through a registered Physical Planner
⮚ PPA1 form x2 signed by the Physical Planner
⮚ Often combined with construction permit
⮚ Attach relevant documents e.g. title documents, location
plans, rates and rent certificates
- Publish notice of the proposed change of user in two daily
newspapers and on the site for 14 days minimum – opportunity to
object
- A planning brief/report is prepared and signed by the Physical
Planner
⮚ explains why change of user follows local policies and
won’t have a negative impact on the community
- Pay application fee – attach to planning brief
- Submit planning brief + application
- The local authority will check for objections
- After 20 days (or more if extended) response and with give
reasons for decision
⮚ PPA2 form given for permission
SALE AND PURHCASE OF A LEASED BUILDING
Things to ensure
- Precontract investigations are key e.g., existing covenants and
conditions of the lease
- Head lessor consents
- Is change of user needed?
- Planning permissions required
For Vendor’s advocate, ensure the new owner will comply with
conditions
SALE OF A PROPERTY OFF-PLAN
- No physical structure, purchasing from the plans of the
developers e.g. plan for houses, apartments, duplexes
- Offers lower costs than already built structures and the
developer can use the deposit to fund construction
- It is a lease as the head lessor is the Management
Company
- The purchaser becomes a shareholder in the management
company (check notes in sublease)
- The management company is to renew the lease if it
expires
- The vendor have an obligation to complete on the day
stated
Procedure
- Letter of offer from vendor to the purchaser
- Purchaser’s advocate
a. investigate the title and does due diligence
b. Obtain site plan to see if it matches registry e.g.
subdivisions
- Purchaser pays non-refundable commitment fee
- Lease agreement drafted and signed
⮚ Ensure well drafted indemnity, and warranties and
representation
⮚ Has an easy exit clause for the purchaser if
development doesn’t match plan
⮚ Must have defect liability clause stating vendor’s
financial obligation for defects discovered after
completion for a certain period e.g. 6 months
⮚ Defined completion date (triggered by issuance of
certificate of occupation which states the property
can be inhabited)
⮚ States date reversionary interest is transferred
- Deposit paid
- Incorporate management company
- Purchaser is assigned shares as per the units bought
- Transfer of reversionary interest to the management
company
After completion
- Defects liability
- Certificate of occupation: issued by Local authority
⮚ Confirms compliance with local developmental
standards
SALE AND PURCHASE THROUGH LAND BUYING
COMPANY
- Share = interest in land but the title is held by the company
- So in case of liquidation, the property is to be distributed to
the creditors
- If someone wants to sell their interest, they sell their shares
- Share certificate issued but not certificate of title
- Normal process of acquiring shares
- Purchaser should investigate finances and liabilities of the
company

FRACTIONAL SALE AND TIME SHARES PROTECTED TENANCIES/CONTROLLED TENANCIES

Fractional ownership:
- several unrelated parties can
co-own property and share risks
and costs
- occurs with property one party
will not use full time e.g. resort
real estate, yacht
- the ownership is shared in
fractions and so each person is
a registered owner until/unless
they sell their fraction
Time share
- is a divided form of
ownership or user rights
- multiple people, will hold
a right to use the
property but they can
only be exercised at the
allotted time of the year
- a party will purchase
ownership rights or right
to use per week (e.g.
ownership rights for a
week)
- during the high seasons,
the prices go up
- Governed by the Landlord and Tenants (shops, hotels
and catering establishments) Act
- S. 2 defines it as a tenancy for a shop, hotel or catering
establishment which
a) Has not been reduced into writing OR
b) Has been reduced into writing and
i. doesn’t exceed 5 years or
ii. Contains provision for
termination other than breach
- If gov a party in agreement ≠ controlled tenancy
- Landlord has to show increase in market value of property
to increase rent
Termination or Alteration (s. 4)

15
 - applies to luxury holiday
home and it is becoming
more
SALE OF A PROPERTY THROUGH SURVEY AND SUBDIVISION
(S. 22 AND 42 LRA)
- Similar to conventional agreement but also governed by s.22 and
s.44 of LRA
1. S 22 LRA; using cadastral maps, the registrar may
● If contiguous parcels have one owner and subject to the same
obligations and right, combine them (closes old register and
puts new one)
● Division parcels, closing old registers and opening new one
2. S. 42 LRA: part of land can only be sold after subdivision or
allegation (where applicable) and registered separately
- The agreement for sale with also contain
i. Sketch map
ii. Cover page states “Sale of a portion of Land Reference No.
1234/56”
iii. Who bears cost of subdivision fees
- Completion is after subdivision e.g. 30 days after finalisation of
subdivision
- Notice to tenant of 2 months (or more if stated by the
agreement) that has been stamped by the Business
Premises Rent Tribunal
- Notice must state reasons for termination/alteration
- It can be served on the tenant, an adult member of their
family or an employee in the premises
- The tenant may agree or not to the termination/alteration
Grounds for Eviction (S.7)
- Hasn’t followed obligation to repair and maintain property
- Consistent delays in rent payment
- Defaulted payment for 2 months
- Substantial breach of lease agreement
- The landlord is offering alternative location for reasonable
terms
- The landlord intends to demolish or reconstruct
Landlord intends to occupy premises themselves

SUBDIVISION AND AMALGAMATION

Definitions Procedure: similar process for both Requirements
Amalgamations: - Draft amalgamation or subdivision 1. PPA form x3 signed by registered Physical Planner
combinations of 2 plan/scheme 2. Amalgamation/subdivision scheme (5 blueprints + 1 linen
or more plots to be - Make an application through a print)
held under one registered Physical Planner to the 3. Planning brief signed by Physical Planner
certificate of title County Gov 4. Ownership documents
⮚ Form PPA1 5. Comprehensive location plan
Subdivision: the ⮚ Attach plan and scheme 6. Application fee
division of a single ⮚ Planning brief stating 7. Rent and rates payment receipts
land into 2 or more scheme in accordance
plots in order to with policies and
develop each requirements
independently - Pay application fee – attach receipt
- Speeds up to application
zoning Professional and Statutory Costs Factors to consider
process and 1. Application fee – charged per plot 1. Consents
sales and varies in counties - Land Control Board if it is agricultural land
2. Physical Planning Costs: issued upon - Local Authority consent as they are given the mandate by
completion Physical land use and Planning Act 2019 – fine of 500k or 2
3. Professional fees: depends on size months prison for developing without development
and location of land permission
2. Making a development plan
- Plots and access roads are earmarked and drawn to scale
3. Get physical planning compliance from physical planner after
all requirements are met

ENCUMBRANCES
DEFINITION ⮚ they favour the holder and burden the owner of the ● The characteristics
land ● How it is created
⮚ limit the transactions and dealings that can be made ● How it is extinguished
in relation to the land

Inhibition Prohibition Caution Restriction Charges

S. 68 to 70 LRA
Temporary encumbrance
issued for a specified period
or in the occurrence of a
specific event
NB: it is a power of the court
Power of the Court S. 71 to S. 75 LRA S. 76 to 78 LRA Check orders
It applies in cases Lodged by anyone with They are lodged to prevent (s.3) It is an interest in land
where someone an interest fraudulent or improper securing payment of money
wants to enforce They will be notified if dealings e.g., two titles for
monetary claims anyone is trying to one property and the
register any dealings registrar wants to
that are inconsistent determine the real one

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Order is given before the trial
begins to maintain status quo
Court can extend period
Must be registered to be
effective
● Lodged in LRA Form 66
accompanied by court
order
- Signed, sealed and
making specific
reference to the parcel
of land affected
● Registrar shall register it
in the appropriate
register
● No need for notice to
registration
NB:
● So long as it remains
registered, no instrument
that is inconsistent shall
be registered
SERVITUDES
Definition
● It gives a person a right in land that does not belong to them
● it is a non-possessory interest or right in another person’s land and never affects ownership
Easement
It allows the holder of the easement to the
right to use the property in a specified manner
e.g.
a. right of way
b. right to light
c. access to water
It is not registered
Not transferable to third party
Can be acquired through prescription (20 yrs)
or by agreement
TAXATION IN CONVEYANCING
A. STAMP DUTY
DEFINITION
● Part of revenue raised by govt
● Requires stamps sold by govt to be
affixed to conveyancing docs
Court issues No dealings that are They can lodged by the It can be discharged once
prohibition order inconsistent shall be registrar own their own the chargor has finished
against owner to registered while the motion or on application paying (S.85)
prohibit them from caution exists except
having any dealings with consent of
with the land until cautioner
the plaintiff/DH can Notice is given of the Restricts dealings Can have several charges
execute claim proprietor after it is inconsistent with the on one parcel
registered restriction They rank according to how
they were charged (S. 81)
May be removed my
person upon notice or
registrar suo moto after
giving parties an
opportunity to be heard
How to remove Notices Remedies
● May be removed 1. Intention to register 1. Notice (s. 90 LR)
by the cautioner, restriction 2. Action for Money
the court or the 2. When the restriction is (S.91)
registrar made 3. Appointment for
● On application of 3. If there are variation Receiver (S. 92)
the proprietor, the 4. If it is removed 4. Leasing (S. 93)
registrar can send 5. Possession (s. 94)
a notice to the N.B the parties should be 6. Power of Sale (S.
cautioner to heard before it’s made and 96 to 98)
remove the before it is removed
caution. If they
don’t respond, it is
removed. If they
do a notice in
writing objecting,
the registrar will
hear both parties
and decide
Restrictive Covenant Profit a prendre
Restricts enjoyment of land by owner for Allows a person to enter into another land and
the benefit or others and the surrounding come out with something that profits them e.g.
land to preserve enjoyment and value a. fishing
e.g. b. logging
a. height of building e.g. Nakuru
b. subdivision of land e.g. Karen
It is registered It is not registered
Transferable to third party It operates as a licence
Is a promise made through an Created through an agreement
agreement
SECTIONS RATES
Stamp Duty Act Transfer
S 5 – every interest relating to property ● Urban areas – 4%
must be stamped and duty paid in 30 ● Rural areas – 2 %
days Leases
S 113 – failure to pay is an offence ● > 3 years – 2%
Land Registration Act ● < 3 years – 1%
S 46 – no document can be registered if Charges/debentures - 1%
stamp duty not paid + documents Discharge of charges – 0.5%
stamped
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Who collects stamp duty? EXCEPTIONS PROCEDURE
● KRA – payment made to authorities ● May be exempt/apply for 1. Applicant presents document for
account in commercial bank exemptions assessment by collector – Fill Form SD1
- Doc + stamp duty assessment + 1. Charitable organisation 2. Assessor confirms duty payable – counter
bank slip delivered to collector of 2. Religious institutions check info in the form, ascertains amount
stamp duty 3. Government departments e.g. CBK and endorses form
● Important that assessment obtained from 4. 1st time buyer under affordable 3. Applicant pays amount at designated
collector in legible manner, payment housing scheme bank
rechecked, copies and filed 5. Transfer between spouses 4. Return doc + payment slip to collector
● Relief or exemption obtained in time who stamps docs

B. CAPITAL GAINS TAX

DEFINITION EXEMPTIONS

● Tax under CGT regime where asses give rise to profit by 1. Income taxed elsewhere
transfer of property 2. Company issuing shares and debentures
● Reintroduced by Income Tax Act on 1st Jan 2015 3. Purposes of administers deceased’s estate
● Paid by the seller who makes m 4. Spouses as part of divorce
5. Agricultural property less than 100 acres (rural area) or 50
acres (urban area)
6. Transfer value less than 3m
RATES EXCLUDED TRANSACTIONS
5% of NET gain (exclusive of acquisition and incidental costs) NB: deemed non-profit transactions
1. Charging property as security of loan
Net gain = transfer value – incidental costs 2. Transfer of property to an heir
3. Vesting Company property on liquidator
NB: cannot be offset against other income taxes 4. Transfer from trustee to liquidator

Paid via iTax Portal on KRA website

Penalty will apply for failure to pay under ITA

REPLACING CERTIFICATE OF TITLE

LOST OR STOLEN Prevents land grabbing and secures tenure of proprietor
TITLE S. 33 of the LRA: provides for replacement of documents
Process
● report loss or theft to police
● get abstract
● go to lands office to apply for search
● get certificate of search showing status of land
● contact advocate to draft statutory statement stating
i. how the document was lost
ii. committing to recover lost title and take it to registrar for cancellation
● proprietor applies to registrar for issuance of duplicate certificate of title
● Produce abstract and statutory statement to show the loss or destruction
● Pay fees
● If registrar satisfies, publishes notice in gazette and in two newspapers of nationwide circulation inviting
objections
● After 60 days + no objection, registered owner takes copy of gazette to land registry
● Registrar issues new title after fees paid
● Entries made into the register and then title sent to owner

N.B statutory declaration by all registered proprietors or directors (company) or chargee (when land is
charged)

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