In every transaction, there are certain things both a buyer and the seller expects to gain at the end of their negotiation. Land buying need not be complicated and needs to be demystified. This article generally looks at the land buying process in Kenya, the expectations, the norms and the pitfalls thereof.
Land buying follows the basic principles of law of contract. For instance, like any other sale of good transaction, the seller is not obliged to inform the buyer of any defects on the land e.g the land being prone to flooding. This is known as buyer be aware principle (caveat emptor). However, he/she is supposed to disclose any defects in the title e.g the title of the land being used as a security against a bank loan.
Generally, land in Kenya is identified by Plot Number or Land Rate number (LR). After the appropriate land is identified and the LR number obtained from the seller and the process proceeds as follows:
Step one: Search at Ministry of Lands
Do search with Ministry of Lands at district or county HQ; this will reveal;
- the true landowners and establish the presence of brokers if any,
- If the title has been charged or has a caveat e.g when title used to secure a loan, or there is a court order barring any transaction on that land, etc.
A search will cost approximately 520/= and should be ready normally within two hours. A valid search should be no more than six months old.
Step Two: Search at Local County Offices
Do the search with the Local Council (municipal or county). This will confirm any unpaid Land rates which you will need to factor in when deciding the purchase price. The cost would vary from county to county e.g in Nairobi you will be required to have a certificate of clearance from the Nairobi County which costs 7,500 and should be ready normally within two hours.
If there are prevailing unpaid land rates you would need to agree with the owner who will settle them as the land cannot be sold (transferred) with outstanding land rates. Hence it will affect the purchase price to that extent.
Step Three: Land Map
Visit the local surveyor and purchase a map of the place, they are normally two maps one drawn to scale (informally known as tracing or mutation) and another showing the neighboring farms. Cost: 350 per map you may buy these at lands ministry but surveyor is better and faster.
Step Four: Ground Verification
Armed with the map, the surveyor and the seller visit the land on the ground. Have a tape measure to confirm the dimension from the map drawn to scale. Make sure you see the beacons or replace the lost ones Surveyors charge about 1000 per beacon.
I believe this should be paid by a seller as the land is still his/hers, however, it may be paid by either party or even do a cost-sharing depending on who is more desperate. In extreme cases, especially in the villages, the neighbors would be invited so that they can raise any disputes they may have on the land boundaries.
Step Five: Agreement
The law requires any land transaction to be in writing. While it is not a must a lawyer be involved it is very advisable to have a lawyer. According to the tariff provided by Law Society of Kenya the lawyer should charge 3000Ksh if the land is 1,000,000ksh and below 800ksh if land value is above 1,000,000. Lawyers cost is normally shared 50:50 between buyer and seller.
If the seller is married, ensure that the spouse to the seller is present at this stage or at least the spouse is aware and agrees with the transaction to avoid later complication as you will see in step 7. Consent from children is not required though it may be important since you need good neighbors after you have bought the land.
Step Six: Post Agreement Transaction
After this everything now depends on the agreement. According to the agreement, you may be paying cash or by installment. Either way the seller will demand some money. Ensure by the time you make the initial payment the title deed and other legal documents are in the custody of the lawyers.
Consider a scenario where the seller takes a bank loan a day after you did the search and used the title deed as a security (see step 1). The search would be clean but the title isn’t available by the time you are at step 6.
I repeat: remember he can take a loan in the middle of your transaction if he continues to keep the title.
Paying at this stage this is the norm since the seller will demand a commitment from you in cash form, however in my view step No. 7 should come before step no.6.
Step Seven: Land Control Board
Book the Land Control Board (LCB) meeting. The LCB Is a forum made of the Assistant County Commissioners( Previously called D.O ) and the local village elders and meets once a month. They are the ones who give the final consent for the land to be sold. Their role is to protect the seller from self-destruction e.g. where a man is selling land without wife knowledge and they don’t have anywhere else to go or the land being sold is clan/community land.
Why I believe you should attend LCB before paying any money: assume you pay Fist installment of 500,000 then you go to Land Control Board(LCB) and they refuse to give consent. You would ask for the refund of the initial installment (commitment) money you paid at step 6 and the seller would say he had already spent the money and therefore you should wait.
What do you do… that’s a court case, 3 years later the case not yet decided. Sometimes, sorry to say, it’s a conspiracy between husband and wife ( The husband tells the wife …when we go to LCB refuse the land to be sold) Here is where most land cases are.
As stated in step 5. that’s why it is important to have the spouse present when doing the agreement.
LCB cost around 1000/=, however, there is a special Land Contol Bond (SCLB) which involves only the D.O and the two transacting parties instead of waiting for the main LCB which meets once per month. Cost: 5,000/= time 2 hours depending on availability of D.O.
Step Eight: Land Transfer
After all payments, seller signs Land Transfer Forms which together with Consent from LCB, land search – not more than 6 months old(see step 1) clearance from county/ municipal council (that you have paid all land rates), passport photos, KRA pin, agreement and old title deed you go to Ministry of Lands to change ownership. Cost 5,000/= to process new title. Time 2 weeks, but if you can make the ministry of lands official to smile you will have the title later that afternoon. Cost: undisclosed token of appreciation given to land officials. This is Kenya, remember?
Note: it’s possible and advisable that the land transfer documents be signed in advance and be deposited with the lawyer i.e when you pay the first installment (see step 6). This ensures that the seller cannot backtrack.
Step Nine: Stamp Duty and Transfer Fees [Capital Gains Tax]
After you have all the transfer documents as stated in Step 8 you need the seller no more. However, you will also need to pay stamp duty based on the value of land i.e 4% for Municipalities 2% for reserve. i.e if your land is in the municipality and you bought at 1,000,000 you pay stamp duty of 40,000.
Notice: the value of land could be different from the purchase price and in such cases, though extremely rare, the Ministry of Land official might demand a valuation. In most cases, they just use the purchase price.
Step Ten: Post Purchase Activity
After one week the buyer should do another search with Ministry of Lands to confirm that the land now reads your details (after which you call your family and friends to slaughter a goat to give thanks to God.) Remember to call me so that we can celebrate your new achievement together haha.
Disclaimer: This article is for information purposes and due diligence should be carried out when purchasing land from time to time. The rates indicated may change from time to time depending on relevant offices.
Source: Construction Kenya
