A sizeable percentage of Kenyans (at least 62%) prefer investing in land as their priority, among the many available investment forms. This trend is due to its appreciation in value, even amidst a pandemic.
Land and real estate are rapidly increasing in value due to high demand. Owning a piece of land, whether it’s an eighth or several acres is considered a wise financial move.
Some investors acquire land for various reasons such as construction of properties, renting, leasing, or residential purposes. Others buy and hold the land, on speculation, hoping to sell it as soon as its value increases.
Whatever the reason for buying land, you should exercise due diligence. Fraudsters are reaping big on land sales specifically because the buyer doesn’t understand the land buying process in Kenya.
Land in Kenya is zoned or categorized, playing a vital role in determining its use. For example, you cannot buy or build on land zoned as riparian reserves.
The other zones are residential, recreational, industrial, forest land, commercial, to name but a few. The zoning information is available from the Ministry of Lands and Physical Planning in both the National and County government.
Factors to Consider Before Buying Land in Kenya
To avoid being duped into buying land that will get you into legal challenges, you need to understand the categories of land in Kenya.
- Freehold land- It can be individually owned or group-owned for indefinite tenure.
- Leasehold land- The owners have limited but renewable tenure on this land. Foreigners can lease land for a maximum tenure of 99 years.
- Customary land- It is owned by an ethnic community and can’t be sold.
- Public or state land- It’s owned by the national or county government together with its entities.
Once you’ve identified a piece of land and you plan on purchasing, don’t be in a rush. After all, your hard-earned cash is at the stake of falling into the hands of fraudsters.
Below is the process to follow:
Step by Step Process to Follow when Buying Land in Kenya
- Check its value
Land brokers are everywhere and intend to make a quick kill before moving to someone else. With that in mind, ask around about how much land costs in that area. Engage the services of a legally registered land-valuer.
- Track down the seller
Most sellers nowadays engage the services of brokers who take a cut both from you and the seller. If possible, find the authentic seller. Ask them for copies of their identification card, a title deed, and a kra pin certificate.
- Do a title deed search
Use the documents you got from the seller to search the lands ministry. You may go to Ardhi House or do the search at the local level of the land’s location.
A search of the title will tell you:
- Who owns the land.
- The size of the land.
- Whether there is an encumbrance such as; a mortgage, easements, property tax, and caveats or not.
- Accrued Rents and Rates
Other ways to confirm whether the title deed is genuine or not are listed below.
√Check with the spouse- Have they given their consent for the land to be sold?
√Use the services of the Registration of Persons Bureau to run a check of the seller’s ID.
√Visit the DCI and ask whether the land involved has an issue and whether the seller is a known criminal.
√Contact road authorities to determine whether the piece of land you plan to buy has encroached on road reserves.
- Visit the land
If you are satisfied with the information you received from your land search, visit the physical location of the land. Enquire the following from the neighbors:
- Whether the seller is the authentic owner.
- In case there are any issues with the land. It could be family or boundaries,
- confirm whether natural calamities such as flooding affect the area, and
- Check the availability of public amenities such as schools, hospitals, and good roads.
- Contact a surveyor
Although you will pay a surveyor, your efforts will pay off in the end. It’s better to lose a few shillings than lose thousands or even millions to con artists after you have paid for the land.
The surveyor uses the site maps to confirm the presence of the land and the authenticity of the beacons. He also ascertains the authenticity of the title deed.
- Sign the sale agreement
When all the above are in order, you can ask the seller to contact their lawyer to draw up a sale agreement. As soon as it’s ready, you can send it to your lawyer for perusal and approval.
Once your lawyer is satisfied, you can go ahead and make a deposit, the usual 10% of the price of land, paid to the seller’s advocate account.
During the signing of the sale agreement, you must carry your national identity cards for this process. You also need one or two witnesses, and so should the seller.
- Get clearance from the Land Control Board.
The government formed the Land Control Board (LCB), which comprises the County Commissioner and village elders, to protect both the buyer and seller in land transactions.
LCB meets once every month, and you are required to pay an amount of Ksh.1000.
However, if you can’t wait for this bureaucratic process, then you will pay Ksh.5000 for you to sit before a Special Land Control Board (SLCB) together with the seller. It takes a few hours for SLCB to reach a decision.
Once the land control board certifies that the land deal is authentic, you can then go ahead to make a payment as agreed with your buyer.
- Ask for a Land Rate Clearance Certificate
Every landowner in Kenya is supposed to pay land rates to the County government. Before you make any payment for the land, make sure your seller has a land rate clearance certificate.
It’s common knowledge that most land owners in Kenya either deliberately avoid or forget to pay land rates, which means that if you don’t ask for a clearance certificate, you’ll end up paying the accrued rates yourself.
- Acquire Land Transfer Forms from the seller
Once you have purchased the land, you will take the signed documents from the seller, together with the sale agreement, LCB clearance, your ID, and KRA pin, to the ministry of lands. You should also take with you three passport photos.
You will wait until after a fortnight for the change of ownership to take effect. You may, however, need to visit Ardhi House to confirm that the transfer of your details is correct on the new title deed.
- Stamp Duty Payment
It is the last process in buying land in Kenya. Stamp duty is a tax payable during land transfer.
It is calculated based on the location of the land. In Urban centers, you pay 4% of the total value of the land at current rates, while in the village or rural areas, you only pay 2%. If you follow the above steps, you will acquire land that will not land you in legal issues in the future. Granted, where can you get prime land in Kenya if you were thinking of prospecting?
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