How to Purchase a Property in Kenya

Property (latin: Res Privata) in the abstract is what belongs to or with something, whether as an attribute or as a component of said thing. In the context of this article, it is one or more components (rather than attributes), whether physical or incorporeal, of a person’s estate; or so belonging to, as in being owned by, a person or jointly a group of people or a legal entity like a corporation or even a society. Depending on the nature of the property, an owner of property has the right to consume,alter, share,redefine, rent, mortgage, pawn, sell, exchange, transfer, give away or destroy it, or to exclude others from doing these things, as well as to perhaps abandon it; whereas regardless of the nature of the property, the owner thereof has the right to properly use it (as a durable, mean or factor, or whatever), or at the very least exclusively keep it. How to Purchase a Property in Kenya

Procedure on How to Purchase a Property in Kenya

These are the procedures to follow when Purchasing a property in Kenya.

1.The first thing is to Obtain the property tax statement from the Tax authority in Kenya.

• Before you transfer of a property,The first step to purchasing property in Kenya is to hire a real estate lawyer. A title search on the property is very important as many areas are not registered.

Once property has been chosen and a price is agreed upon, the lawyer prepares a sale agreement as a conditional preliminary contract, signed by both parties. Upon execution, the buyer pays a deposit of 10% to 30% of the purchase price, which is usually refundable if the seller defaults on the transaction.

Closing is usually within 90 days from signing. During this time, the seller must obtain a clearance certificate from the municipality. This is presented to the buyer to ensure that all local taxes and utility bills have been settled. The lawyer then files a Draft Transfer at the Lands Office and the stamp duty is paid.

An official from the Ministry of Lands will come to inspect the property, verify its condition, and make sure that the sale price is in accordance with its actual value. These steps will take approximately two to four weeks to complete.

The lawyer submits the documents to the Lands Office to be able to register the transfer, including the original title held by the seller, clearance certificates, consent transfer and the form for valuation for stamp duty. At the same time, the buyer settles the remaining balance with the vendor. Taxes and lawyer fees is paid within 30 days from closing.

It is possible to purchase in Kenya without being in the country. One can assign a lawyer to go through the whole process on the buyers behalf through a power of attorney.

• It is required by law to obtain an official property tax statement from the Property Tax Authority office.
• This tax certificate is a part of the application at the Land registry based on national requirement of Law ACT.
• The purpose of this document is to serve as a proof that the property has undergone a tax assessment and is registered by the property tax authority.

2.Request for the registration form that was submitted by the buyer to the Real Estate Registry.

• After the negotiations and the agreement on all material terms of the contract,
• The buyer pays the seller the requested price,
• The buyer subsequently goes to the Real Estate Registry to request registration.
• At this point in time , the buyer pays the Ksh5.000 registration fee.
• The request is subsequently internally transferred to the Kenyan Surveying Authority to complete a survey of the land.

3. Site inspection by the Kenyan Surveying Authority is done.

• The Kenyan Surveying Authority inspects the property and also conducts the survey of a property, and prepares the report of its findings on the property .
• The report is subsequently delivered to the Measurement Department.
• This is done within 15 day at no cost.

4. The next step is to Obtain the Measurement Departments approval of the inspection report and the Real Estate Registrys acceptance of the request for registration on the property.

• Following the Kenyan Surveying Authoritys inspection, the report produced must be approved by the Measurement Department.
• The entire report is then internally transferred to the Real Estate Registry for acceptance of
• the inspection report and
• the request for registration.
• The Real Estate Registry also conducts an engineering and legal review of the request and grants approval by stamping the documents approved to be authenticated.
• The approved documents are then released to the parties that is the buyer and seller.
• At this stage, the parties also obtain a special, stamped form from the Real Estate Registry, on which they will subsequently print their contract agreement.
• This takes around 21 days at no cost.

5.The final contract is presented to the lawyers syndicate for verification and ratification

• The parties lawyer drafts contract, on the special form obtained from the Real Estate Registry.
• The parties/their lawyer subsequently deliver(s) the contract to the lawyers syndicate for verification:
• The lawyer who drafts the contract ascribes his syndicate identification number to the form, and the lawyers syndicate must verify/certify that the involved lawyer is indeed registered with the syndicate.
• This normally takes around 4 days at a cost 0.5% of the property value.

6.Obtain the Real Estate Registrys approval of the sale contract.

After collecting the contract from the Lawyer, the parties then deliver the contract to the Real Estate Registry for review and if it accepted, the documents will be stamped by the Real Estate Registry as approved to be registered.

This normally takes around 10 days at no cost.

Required Documents

Supplies paperwork relating to the title, boundaries,

• Planning permission,
• Building license,
• Furniture pack and rental guarantee option.
• In the case of purchases of the land, owner will handle the contract and renewing of a 99year lease to the buyer, and for this service the vendor pays 5% of the value of the contract when purchased.

Office Locations & Contacts

MINISTRY OF LAND, HOUSING & URBAN DEVELOPMENT

1ST NGONG AVENUE

P.O. BOX 30450-00100

NAIROBI, KENYA

TEL.254-020-2718050

FAX 254-020-2721248

EMAIL-complaints@ardhi.go.ke

Website:http://www.ardhi.go.ke/default/index.php

Eligibility

Anyone who meets one of the following criteria

1.Has Kenyan citizenship and lives abroad

2. Foreign nationals of Kenyan origin

3. Has Kenyan parents in Kenya –

4.If you are foreigner you must be having an entry visa in Kenya.

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5.To be Eligible the lay down the conditions relating to the payment of the purchase price.

6. There must be signature of validity applied for in the land registry in the name of the new owner.

7.There must be signature of validity applied for in the land registry in the name of the new owner.

8. To be eligible land must be registered with the Government of Kenya or signed or approved to be authenticated

How to Purchase a Property in Kenya Fees

registration fees is Ksh5,00

• Stamp Duty for Draft Transfe 2% – 4% paid by buyer
• Legal Fees 1.5% paid by buyer
• Bankers Check Charge KES600 (US$7) buyer
• Registration KES500 (US$6) buyer
• Real Estate Agents Fee 1.25% paid by seller
• Costs paid by buyer 3.51% – 5.51%
• Costs paid by seller 1.25%
• ROUNDTRIP TRANSACTION COSTS 4.76% – 6.76%

How to Purchase a Property in Kenya Validity

The document is valid for a long time

Processing Time

The process takes 3-4 months or more depending on the complexity of the matter.

Instructions

• To obtain an official property tax statement from the Property Tax Authority office.
• Buyers must know that there is an extra fee known as ‘buyers commission’.
• you will need to recruit a good Kenyan lawyer at every stage.
• Contracts with the Lawyer should always be in English and Any Local language.
• If you are a foreigner you must have an entry visa.
• As this is needed to complete the residence procedure in Ethiopia to give your lawyer power of attorney to go to court on your behalf and register your property.
• You must also apply for residency Entry Visa which are usually valid for one year in case you are a foreigner.
• You are entitled to resell your property any time.

How to Purchase a Property in Kenya Required Information

• Conditions relating to the payment of the purchase price.
• Official property tax statement from the Property Tax Authority office.
• Information from Real Estate Registry to confirm if the property was registered. .

How to Purchase a Property in Kenya Need for the Document

There are Freehold properties available in Kenya . Foreigners can buy commercial class land in Kenya. This type of land is for income or revenue-making purposes. Foreigners are allowed to acquire this and build on it.

There is also land for lease for 99 years in different parts of Kenya like in Nairobi,Kisumu,Naivasha,among others.

There are freehold and leasehold types of land. Mostly, land in Kenya is government-owned. This can be leased for 50 to 99 years.if you are considering to buy a property in Kenya you should consider two issues

• To Buy a new Property “Off plan” or property Under construction and this is usually expensive.
• To buy an Old property buying from a new development, often prices are set with a room for negotiation. However,
• if purchasing property in in different parts of Kenya a resale, there is often room for negotiating on price.

A lot of Kenyan property owners/ developers prefer ‘cash’ payments which is more beneficial to the buyer as it often means a discount on the sale of around 5% and/or can include longer term credit arrangements on repayments.