Buying land is one of the
biggest financial decisions you will make in life. You need to make this
decision with all the details necessary to safeguard your money. There are so
many stories of people who lost their money and I do not want you to be one of them.

I have listed
below the key steps to follow when you are
finally ready to buy land.  Whether you are buying land from an individual or a
company, follow the steps below.

1.       Land
Identification.

2.       Conducting
Due Diligence.

3.       Offer
Letter and Signature.

4.       Obtaining
County Clearance.

5.       Transfer
of Ownership.

 

Step 1. Land Identification

The first step is you need
to determine the size, location, budget, and purpose of the land that you need
to buy.  If you need
to buy land for building your home, then this is residential land. Commercial
land is where you can put up a rental property. Agricultural property is used
for farming. In Kenya, we also have areas that have been zoned for industrial
use. The article below gives you more details.

 

Important: Categories of Real Estate in Kenya

 

The budget
determines the location and size of land you can afford. Generally, bigger land
sizes attract a higher price. Locations close to towns or social amenities
attract a higher price.

Nowadays, most people start their search online. Here is a list of 7 real estate listing websites in Kenya. Other
people rely on real estate agents. The agents browse these listing platforms
and narrow the list down for them. If you have friends who have purchased property,
you may reach out to them for advice and guidance.

Once you have identified land that meets your criteria, plan to conduct a
physical visit. This visit will help you check the surrounding area
and the layout of the land. I have seen cases of people buying land in swampy
areas because they never made a visit. Visiting the land will help you also see
the layout so that you do not buy land that is too steep and will be hard to
build on.

When you visit the land,
ask neighbors questions about the seller or the history of the land. This will
help you identify if there are disputes over the land. Neighbors are well
placed to inform you of any boundary issues or any family squabbles.

 

If you are dealing with a
real estate agent, please verify that the agent has the authority to sell the
property. There are
instances of agents selling land yet the owner did not ask them to.  Agents usually have the authority to sell letters from the owner. For
some properties, this letter is not issued particularly for the lower end of
the market.

Related: Letters of Authorization to sell in Real Estate with an example.

Step 2: Conduct a search in the land’s registry

Once you decide on the property you intend to buy, ask for the title deed and
details of the owner. The copy of the title deed helps to conduct a search of the land at the land
office. A copy of the national identity card is used to verify the identity of the
seller. You can verify the details at the Registration of Persons Bureau.

 

At the land office, you
will use the title to confirm ownership of the land. Additionally, you will
learn if the property has any claims or has accrued land rates. The cost of these
checks will vary from county to county. This search process usually takes three
days. Fr properties in
Nairobi, searches are being done online through Ardisasa.

  How to Conduct Property Search through Ardhisasa

You do not
need to visit every county to get a search done. Your real estate agent
 or lawyer can do that for you. Searches cost around Ksh 500 and under if
you are doing it yourself. Agents and lawyers may charge Ksh 2,000 to help in
the process.

 

While at the land registry,
you can buy 2 types of maps. One map is an overview of the land and adjacent
plots while the other is a map drawn to scale. With the two maps, you then
engage a surveyor to verify the dimensions of the land. The surveyor will
confirm if beacons are there and replace any missing beacons. They will also
ensure that all beacons are in the correct location. The standard cost of
placing beacons is less than Ksh 5,000 per beacon. For a plot with 4 beacons, the price will be
about Ksh 20,000.

Step 3: Preparation of offers and price negotiation

 

If you have verified all
details, you then make an offer. If you are not a real estate expert, we recommend
that you engage a lawyer to prepare an offer. The lawyer will then prepare an
offer letter detailing the terms of sale.

 

You will need to meet costs
for your lawyer. These costs are based on a percentage of the sale price.
The Advocates Remuneration Amendment Order, 2014
provides the scale.

 

Please ensure that all key
details discussed are included in the contract. The agreement may include the
need to pay a deposit. Deposit if any
should be made to the seller’s advocate’s account. It is advisable to
wait for clearance from the Land Control Board (
explained in the next step) before paying any deposit. This ensures that if LCB does not approve the
sale, you can get your money back.

Step 4: Clearance for the Land Control Board

 

For the sale of any land to
occur, there must be approved by the local land control board. The board exists
to ensure that land transfers in are transparent. This includes ensuring that
the land being sold is not communal land or subject to a land tussle.

 

Membership to The Land
Control Board is comprised of county staff and area elders. The boards usually
hold monthly meetings. Special board meetings can be held but for an extra
cost.

 

Once you have been cleared
by the LCB, you will need to pay for land rates. Once you make any rates that
are due you will be issued with a Clearance Certificate. At this point, you can
make the payment for the land and get signed transfer forms from your seller.

You now have several
documents needed for the title transfer process. These are:

·      
Title deed

·      
Land search

·      
Land transfer forms

·      
Sale agreement

·      
Board clearance

·      
Rates Clearance Certificate

Step 5: Transfer of Ownership

When you apply for a transfer of ownership, a valuer will visit the land and
place a value on the property. This value may be different from the amount you
paid. The value determines the stamp duty payable to the Kenya Revenue
Authority.

 

Depending on the value of
the property, a Capital Gains Tax may apply. It is your responsibility to pay
the stamp duty. This is paid by the seller. Stamp Duty is charged on the
property value or the sale price agreed upon; whichever is higher and is:

• 4% for land/property within a municipality




• 2% for agricultural land or property outside a municipality

This article
explains Real Estate Taxes in Kenya. Refer to this detailed
guide on Stamp duty payment for real estate transactions in Kenya.

You will be responsible for the cost of
registration of titles in your name. The county governments will review the
submitted documents. if the documents are complete, a new title is issued.

Post-purchase activity

The law also provides that
agents must be paid the agreed service fee/commission. The fee is on a scale
capped at 3% of the property’s value. The agent is paid by the party who
instructs them. The seller will pay the agent they instructed to market their
property. the buyer will pay the agent who linked the buyer to the seller.

Related: Real Estate Agents Remuneration in Kenya: Understanding
what Commissions to Charge

 

It is important to follow
up after one week and conduct a search the same way you did when buying the
land. This will help you confirm that the property details at the ministry of
lands are now showing you as the new owner.

 

You may consider fencing
the land and notifying neighbors of the change in ownership. Fencing will
restrict encroachment on the land. The neighbors will also help ensure no one
tries to sell the land without your consent.

I hope the above step-by-step instructions help you in purchasing your next
property. In case you have any questions, do not hesitate to reach out to your
real estate agent, advocate or let us know. You may also comment below, and
other community members will be on hand to offer you their thoughts.

What are the Requirements for a Foreign National to buy a piece of land in
Kenya?

Are you a foreigner
wondering how to own land in Kenya? The legal process of buying land in Kenya
remains the same whether you are a Kenyan citizen or a foreigner. There are a
few restrictions. Please read this blog that covers the procedure of buying land as a foreigner.