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Introduction to Land buying process in Kenya
Land buying in Kenya is as simple as reciting 1, 2 and 3 when you go the right way. It can also be difficult as nailing a jelly to a tree when you choose to go the wrong way. So what is the best way to go about owning a land in Kenya?
Over the last few decades Kenya has been known for its booming real estate market with numerous opportunities with land investment. Are you a local investor? Or are you an international investor? You need a deep understanding of land buying process in Kenya and so this piece is really crucial for you.
So what is the process?
The first step is to identify a place you would want to own a land in .In Kenya you have a freedom to own a land anywhere and there are land on sale in various part of the country. In Nyota Njema we have different listings across the country from Nanyuki to Narumoru to malindi to Diani and name it.
We always have a place for everyone all you need is tell us what kind of land, where you need it and leave the rest for us.
Yes it is always possible to buy land directly but seeking help from reputable real estate agent can smoothen the process. A process that would have taken you one or more years to complete will only 5ake you a few months or less after sourcing help from an experienced agent with in depth knowledge of have local market , access to property listings, and a network of professionals, including lawyers and surveyors.
This is the most important process where you want to ensure that the seller actually own the land they are selling and that the tittle they are presenting to you is also genuine. All you need to do is to present the tittle deed number or the land search certificate to the Land registry office of the county the land is located for any information attach to the land and to verify the authenticity of ownership
You need to conduct this survey to know the exact size and location of the land. You will also be able to determine the nearby amenities, the accessibility of the land. You will be able to mark your boundary and the survey is also important because at the end of it you will be provided with a survey report which is vital for land registration process.
Once you have verified the land and completed the survey, you can now proceed to signing of the sales agreement. This legal document outlines the terms of the transaction, including the purchase price, payment terms, and transfer of ownership. It’s advisable to have a lawyer review or draft the agreement to ensure it meets legal requirements and protects your interests.
Typically, a deposit is paid to secure the land. This is a payment to show that you in deed in need the land and the amount is to mark it as booked so no one else can express interest on it. This amount is usually a percentage of the total purchase price and is agreed upon in the sale agreement. In a case where the deposit is not required you are to pay a commitment fee of any amount or the first instalment of the total price as stipulated on the sales agreement. The amount should be payed within the agreed time frame and the acceptable mode of payment .Ensure that the payment is documented and receipted.
You can then proceed to make full payment or you can make your first instalment if you were to pay through installment. Complete the payment as per the terms agreed upon in the sale agreement. Ensure that all transactions are conducted through secure channels and that receipts or proof of payment are documented
After payment, the process of transferring ownership begins. The seller should provide you with the original title deed, and you will need to pay stamp duty, which is a tax based on the property’s value. The transfer process involves submitting the required documents to the Lands Registry. These documents includes tittle deed, completed transfer form, proof of stamp duty payment and Identification document for both the parties.
Once the transfer documents are submitted, the Lands Registry will process the application and issue a new title deed in your name. This the process where you becomes the new owner and the changes are reflected on the land registry as well.
The registration has been completed at this stage and the tittle is processed in your name and you will be required to pay for the processing fee. You will then be issued with your tittle with your name on it.With the new title deed in hand, the transaction is complete. Ensure that all documents are safely stored, and consider registering your ownership with the local authorities if required.
By following these steps and conducting thorough due diligence, you can successfully navigate the land buying process in Kenya Whether you are a local investor or an international buyer understanding land buying process in Kenya is crucial and it is also important to always seek the help from a real estate advisor because they act as burden lifters relieving you from doing a lot of work. The agent are equipped with knowledge on real estate and all you need to say why you want and they will help you in the shortest time.
Overview of Kenyan real estate market
The Kenyan real estate market is diverse and evolving, reflecting the country’s rapid urbanization and economic growth.
Urbanization: Kenyan real estate main reason for thriving is because cities and towns are constantly growing hence demanding room for expansion. Investors are therefore investing in land to put up structures for the high demand of people looking for residential to stay in. Kenya now has a newly established city, Eldoret city. This just means there are more real estate investment opportunities in the city. Nairobi, Mombasa kisumu and Nakuru are also expanding to their surroundings as more investors expand their businesses to meet the demand. Nairobi city is specifically experiencing significant growth in real estate because to it is a capital city.
Development in the Commercial sector: Demand for residential structures: There is an increased demand of industrial properties, retail spaces and rental office spaces as the urban center and towns grow. Urban centers especially Nairobi is witnessing demand of office spaces and industrial sectors are also expanding due to increased manufacturing and logistic activities.
Increased residential structures demand: As much a number of people are looking for peaceful and serene places away from the city to build their houses, more people are still moving into the urban centers to stay .There’s strong demand for affordable housing, driven by a growing middle class and rapid urban migration.
Favorable government policies: Kenya’s real estate market offers opportunities in both high-end and affordable housing, commercial properties, and land development. The government’s focus on infrastructure development and housing projects, as stipulated in the Big Four Agenda. This therefore boost investors’ confidence in investing in the real estate sector
Regulatory Environment: The market is influenced by various regulatory frameworks, including zoning laws, land tenure systems, and property ownership regulations. Recent efforts aim to streamline property registration and improve transparency in the industry like formulation of RESA which is the
Challenges: The market faces challenges such as land disputes, slow bureaucratic processes, and economic fluctuations. Additionally, property prices can be volatile, influenced by both local and global economic conditions.
In records, the Kenyan real estate market presents a range of opportunities, driven by urban growth and economic development, though it also requires navigating various regulatory and economic challenges.
Importance of conducting due diligence in land purchase
Due diligence in land purchase is important because it ensures that the buyer fully understands the property and its associated risks before finalizing the transaction so that you don’t fall into pit falls or Key reasons for its importance include:
Ownership Authentication: Currying out due diligence aid in confirming the seller’s legal right to sell the property, ensuring there are no disputes or claims from the third parties like other relatives. The process will also help in knowing the past disputes and if they were resolved.
Access Encumbrances: This process ensures that the land is free from any encumbrances that could transfer to the new owner. Encumbrance is a claim or a burden on a piece of real estate that affects the owner’s ability to use or sell the property. There are many different types of encumbrances, including cautions, caveats, charges, liens, easements and more.
Land use restrictions and Zoning: Buyers must verify that the land is zoned for the intended use (residential, commercial agriculture and name it. It should also complies with local planning laws and it should also not be burdened by future legal complications or fines.
Environmental and Topography: currying out due diligence helps identify potential environmental risks, such as soil contamination, soil erosion or if the location is prone to flooding. This can also help you determine any other factor that would affect the property’s value or usability.
Property Boundaries and Surveys: A thorough survey confirms the exact boundaries of the land, preventing future disputes with neighbors over land ownership or encroachment
Access and Easements: It ensures that the land has proper access routes and is not burdened by easements that could restrict its use, such as rights of way for utilities or neighboring properties.
Market Valuation: Conducting due diligence in a proper manner also means you will be receiving an approximate price in the market and to also ensure that you as the buyer is not overcharged based on the current market prices and future returns.
Regulatory Compliance: It ensures the land complies with all applicable laws, such as land registration, building codes, or environmental regulations, preventing legal issues that may arise after the purchase.
Not doing due diligence can result in unexpected financial losses, legal disputes, or an inability to use the land as intended. Therefore, it is essential to protect your investment as the buyer. Conducting due diligence in other words will prevent you from falling into pitfalls.
Whether you’re investing in property or purchasing land for personal use, understanding the legal and procedural aspects will help you make informed decisions and secure your investment especially when you seek advice from certified lawyer.
So you ether choose to acquire the land the right way or go left and fall into the pitfalls.
There are several possible risks that can occur with buying land, each of which must be given due consideration by the buyer. There is always the possibility of unclear or disputed land titles, which invite legal disputes or loss of ownership. In addition zoning restrictions and land-use regulations could impede full development of what can be built on the property. This could also include environmental hazards that might cause contamination or put the property in a flood zone, which would result in expensive requirements for remediation or insurance. Secondly, it could be that the land lacks infrastructural institutions like roads, water, and electricity, which may increase the cost of development. Further, market fluctuations or alteration of government policies based on imposition of taxes or eminent domain may affect its long-term value.
Potential risks and how to avoid them when and after buying land in Kenya.
When purchasing land, you might encounter elevated levels of gases or discover that the soil is unstable and unsuitable for construction. Building on unstable soil could lead to cracks in the foundation of your property. Additionally, the land could be in a flood zone. While this isn’t necessarily a deal-breaker if you can raise the property or re-grade the land to prevent flooding, flood insurance is costly and may deter potential buyers.
Every town has a land-use plan. When constructing or enhancing a commercial or residential property, there are likely to be zoning regulations that dictate the land-to-building ratio or the maximum allowable size of the structure.
3.INFRASTRUCTURE DEVELOPMENT
4 NO IMMEDIATE CASH FLOW
Although the value of land may appreciate over time, there is no guarantee of it doing so. If the market value remains static or worse still, declines, then the land might not produce the financial returns you had previously expected from it, hence a poor investment outcome.
To avoid this, consider adding improvements like planting trees, fencing the area or even developing the land to increase market valuability and land use.
Besides this, you can consider doing farming, camping or put up air bnbs if the land is located in tourist destination areas like Nanyuki,Naivasha, Diani.
There are several risks a client might face from fake land sellers.
In certain cases, fraudsters may sell the same piece of land to several buyers. Without proper verification, you risk purchasing land that has already been sold to another party.
How to Avoid Land Buying Scams
Generally speaking, the owner of land can never face a big risk while purchasing any land. It is to be noted that landowner disputes may have disastrous affects on the legal ownership of the property, its value, and the possible development of the property. Here are some of the common risks associated with landowner disputes
How to Mitigate Landowner Dispute Risks:
Minimizing these risks through proper due diligence and legal support is crucial for a smooth land Buying Process.