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Legal procedure for buying land in Kenya

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Land buying requires that all legal and contractual procedures are followed to avoid future conflicts, which may lead to double loss.

Land buying follows the basic principles of law of contract. The seller is supposed to disclose any defects on the title, e.g. if it’s being used as a security against a bank loan. Land buying requires that all legal and contractual procedures are followed to avoid future conflicts, which may lead to double loss. Before investing your money on any piece of land, follow the following steps:

Search at Ministry of Lands

Search with Ministry of Lands at district or county headquarters to ascertain the true land owners and establish the presence of brokers and if the title has been charged or has a caveat, for instance, when it has been used to secure a loan, or there is a court order barring any transaction on the land.

A search costs Ksh520 and should be ready within two hours. A valid search should be no more than six months old.

Land rates

Visit the Local Council (municipal or county) to confirm any unpaid land rates which you will need to factor in when deciding the purchase price. Cost varies from county to county. In Nairobi, you will be required to have a certificate of clearance from the Nairobi City County, which costs Ksh7,500 and should be ready normally within two hours.

If there are prevailing unpaid land rates you would need to agree with the seller on who will settle them as the land cannot be sold (transferred) with outstanding land rates.

Land Map

Visit the local surveyor and purchase maps of the place, normally two, one drawn to scale (informally known as tracing or mutation) and another showing the neighbouring farms, costing Ksh300 per map. You can buy these at the Lands Ministry but a surveyor is better and faster.

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 Ksh1,000 per beacon. Make sure the bordering neighbours are in agreement with the boundaries.

Agreement

The law requires any land transaction to be in writing. It is very advisable to have a lawyer (though not a must). According to the tariff provided by Law Society of Kenya the lawyer should charge Ksh3000 if land cost is Ksh1,000,000 and below and Ksh8,000 if land value is above Ksh1,000,000. Lawyer’s cost is normally shared equally between buyer and seller.

See Also: Real estate remains best investment in Kenya

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 complications.

Post Agreement Transaction

According to the agreement, you may be pay in cash or installment. Ensure by the time you make the initial payment the title deed and other legal documents are in the custody of the lawyers. This is because the seller still owns the piece of land and may involve other transactions using the title deed, which may harm you financially.

Land Control Board

Book the Land Control Board (LCB) meeting. The LCB is a forum made of the Assistant County Commissioners (Previously called DOs) and the local village elders which 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’s knowledge and they don’t have anywhere else to go or the land being sold is clan/community land. LCB costs Ksh1000.

However, there is a special Land Control Bond (SCLB), which involves only the Assistant County Commissioner and the two transacting parties instead of waiting for the main LCB that meets once per month. SCLB costs Ksh5,000 and may take two hours depending with availability of the Assistant County Commissioner.

NEXT: Five lethal mistakes to avoid when investing in real estate

Land Transfer

After all payments, the seller signs Land Transfer Forms which together with Consent from LCB, land search, clearance from county/ municipal council, passport photos, KRA PIN, agreement and old title deed are taken to the Ministry of Lands to change ownership. It costs Ksh5,000 to process new title which should be ready within two weeks.

Stamp Duty and Transfer Fees

You will need to pay stamp duty based on the value of land, i.e four per cent for municipalities and two per cent for reserve.

Post Purchase Activity

After one week, the buyer should do another search with the Ministry of Lands to confirm that the land now reads his/her details.

Editor and writer at BUSINESS TODAY, Muli has a passion for human interest stories that have a big impact on economic development. He holds a BSc in Communication and Journalism from Moi University and has worked for various organisations including Kenya Television Service. Email: [email protected] or [email protected]

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Real Estate

Vision 2030 Delivery Board to support Tatu City

The first major privately-funded Vision 2030-driven urban development will create over 100,000 permanent jobs and 220,000 temporary jobs during its lifetime

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An artistic impression of Tatu City. It is the largest private development in Kenya and has to date invested Kshs  2.2 billion in infrastructure.

Vision 2030 Delivery Board and Tatu City developers have formed seven working committees to put in place right policies, offer statutory and infrastructure  support to accelerate implementation of the 5,000 acre development.

The membership of the committees will be drawn from the Vision 2030 Delivery Board comprising of Principal Secretaries in the Education, Water, Energy, Transport, ICT and Tourism ministries as well as private sector representatives and Tatu City developers.

Vision 2030 Delivery Secretariat Director General Dr Julius Muia said plans have begun to come up with ways of engagement to reposition Kenya’s property, housing landscape and urbanization.

“What we have seen is a model for sustainable urban development. The framework and intentions of the projects are good. We want to see orderly urbanization within and around such cities in the country,” said Dr Muia.

He spoke to journalists during a board site visit on the project to map out key areas of collaboration.

The committees will partner to improve road expansion, water resources management, policy improvement and governance, affordable housing development, accreditation for a center of excellence in technical and vocational education and promotion of Tatu city in local and International markets.

Vision 2030 Delivery Board, Social and Political pillar Committee Chair Dr Dinah Mwinzi said the committees will create the right environment to support growth of the country’s largest private development in line with Sustainable Development goals and aligned with Vision 2030 goals.

“Tatu City will contribute to acceleration of the country’s socio-economic transformation to improve the quality of life for Kenyans,” said Dr Mwinzi.

Vision 2030’s main aim is to accelerate the transformation of the country into a newly industrialised globally competitive nation by 2030.

ALSO SEE: S. African firm to set up school in Tatu City

Tatu City is the largest private development in Kenya and has to date invested Kshs  2.2 billion in infrastructure. The City is designed as a controlled mixed development that will provide privately managed utilities to guarantee reliability and a high quality of life to the residents and visitors. The project represents a new way of living and thinking for all Kenyans, creating a unique life, work and play environment that is free from traffic congestion, long-distance commuting and slums.

“We are delighted to host the Kenya Vision 2030 Board delegation at Tatu City. It reinforces the fact that our project is an integral component of the Vision 2030 blueprint; and gives an opportunity to showcase the incredible progress we have made,” said Chris Ochieng, Tatu City Senior Development Manager.

Related: Real estate firm to develop 1,200 residential houses at Tatu City

The first major privately-funded Vision 2030-driven urban development will create over 100,000 permanent jobs and 220,000 temporary jobs during its lifetime.

Already, more than 2,000 jobs have been created for the communities living within  Tatu City environs on contractual and permanent basis.

“The feedback we have received from the Kenya Vision 2030 Board delegation has been positive, confirming that we are on track to help the country achieve an upper  middle-income status by the year 2030. We remain committed to a deepened relationship with Vision 2030 ensuring a brighter Kenya for all,” Ochieng added.

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Real Estate

Iconic Sh1.3b building opens in Nairobi

FCB Mihrab will change the city’s skyline and set precedence for the Architecture of the country through creating a corporate haven for its clients

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FCB Mihrab at the junction of Lenana Road and Woodlands Road in Kilimani. The building portrays Islamic values. Copyright: MDL 2014

Kenya’s first building with Architecture that portrays Islamic values has opened today at the junction of Lenana Road and Woodlands Road in Kilimani and is ready for occupation.

FCB Mihrab has been constructed at a cost of Ksh 1.3 billion and is designed like a mihrab which symbolizes an archway or an entry towards purity and goodness.

Mihrab Development Project Administrator Farhiya Ibrahim says the 25 storey building located in Kilimani, off Lenana Road is already 50% sold with First Community Bank being the anchor tenants.

“A marvel and a first in the country, FCB Mihrab will change the skyline of Nairobi and set precedence for the Architecture of the country through creating a corporate haven for its clients,” Ibrahim told Capital FM Business.

FCB Mihrab floor layout takes on an intricate floral pattern anchored at a common centre representing the various business sectors that would occupy the building.

Some of the amenities include an open to sky terrace on the ground floor dedicated to the use of the buildings’ occupants, a borehole, Main Generator and backup generator, four high speed lifts all connected to the BMS systems for monitoring and a surveillance of common areas all linked to the BMS system.

The building will also have an outside cafeteria, a gym, and a prayer hall, green garden and artificial moat.

Related: Hilton to open a new hotel in Nairobi

“Other environmental features include water treatment system, greywater recycling system and rainwater harvesting,” she explained.

The space for sale includes 17 middle and upper-level office suites and four ground and mezzanine level of smaller sized office suites suitable for service based and delivery channel outlet.

“This is the first project of the Mihrab Development Limited which was formed to build a headquarters for First Community Bank, it then translated to a firm, we are hoping to do other projects once we finish selling the project,” she said.

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Business News

Radisson Blu to add its third hotel to Ethiopia

The chain is operating a Radisson Blu Hotel in Addis Ababa, since 2011 and plans to open its second Blu in the city within the next 18 months

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Radisson Blu Bishoftu. The newly constructed hotel will open in 2020. Credit: Courtesy

The Carlson Rezidor Hotel Group, one of the fastest growing hotel companies in the world, adds another iconic Radisson Blu hotel in Ethiopia, in the city of Bishoftu. The newly constructed Radisson Blu will open in 2020. Carlson Rezidor is operating a Radisson Blu Hotel in Addis Ababa, since 2011 and plans to open its second Blu in the city within the next 18 months.

“Ethiopia is one of Africa’s fastest growing economies with a population of more than 100 million people. We are further cementing our position as one of the leading hotel groups in Africa and look forward to continuing our expansion on the continent, and delighted to add our third Radisson Blu hotel in Ethiopia,” said Andrew McLachlan, Senior Vice President of Business Development, Africa & Indian Ocean for the Carlson Rezidor Hotel Group.

“We are thankful to our partners for their trust in our brand and people – and look forward to our long-standing relationship,” added McLachlan.

Bishoftu is a popular MICE and leisure destination within Ethiopia. It is located 35km southeast of the country’s capital city, Addis Ababa. It is also within easy access of the country’s first international five-lane highway, leading from Addis Ababa to Djibouti. The hotel will be located on Lake Babogaya, which forms part of the region’s renowned five crater lakes.

“Radisson Blu Hotel, Bishoftu is a great addition to our Ethiopian portfolio as we expand outside of the capital city. Once open, the hotel will be the first internationally branded hotel with the largest meeting and events center in Ethiopia, outside of Addis Ababa,” added McLachlan.

Related: Radisson taps Lusaka manager to head new Westlands hotel

“I believe and share the aspiration of the regional government of Oromia and other stakeholders that the hotel will contribute into making Bishoftu a tourist destination city,” commented Mr. Sami Getachew, General Manager of Adulita Conference and Spa Resort Hotel PLC, the owners of the property. “The hotel will also play a pivotal role in making Bishoftu another alternative to Addis Ababa for MICE related conferences and events in combination to the existing hotels and resorts in the city. I also believe that together with Rezidor’s extensive experience in the hospitality sector and their full support, we will successfully open the hotel by 2020.”

The 152-room Radisson Blu hotel will have a restaurant and terrace, a specialty restaurant and a pool bar on the terrace, offering picturesque lake views. The 1,045 sqm meeting and events spaces will include a state-of-the-art ballroom and six contemporary meeting rooms. Radisson Blu Hotel, Bishoftu will also offer a luxurious spa and well-equipped gym.

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Real Estate

Shopping malls deliver middle class dream

Cytonn Senior Manager, Regional Markets Johnston Denge says the sector offers relatively high returns compared to other sectors such as residential houses

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Two Rivers in Nairobi. Destination malls are the best performing typology with an average rental yield of 10.3%, compared to a market average rental yield for the retail sector of 8.3%

Kenya’s growing middle class has been the driving force behind growth of retail sector.  According to Cytonn Real Estate Company, the rising middle-class has increased purchasing power as well as varying tastes and preferences for different goods and services.

Speaking during the release of Kenya Retail Sector Real Estate Report 2017 in Nairobi, Cytonn Senior Manager, Regional Markets Johnston Denge said Nairobi is the best performing region with average rental yields of 9.6% a 0.4 percent points decline from 10% yield in 2015/2016.

He added that destination malls are the best performing typology with an average rental yield of 10.3%, compared to a market average rental yield for the retail sector of 8.3%.

“This  increase comes as a result of the opening of malls such as Next Gen Mall, Two Rivers, Ciata City Mall, Rosslyn Riviera among others which added the cumulative retail space,” Denge said.

He confirmed that the outlook for the real estate sector is positive, as it still offers higher returns compared to other asset classes with average returns of 25%.

He explained that the retail sector offers relatively high returns compared to other sectors like residential houses which offer 5 to 7% yields.

“Nairobi is sufficiently supplied with retail space factoring in the incoming supply in the next 2 to 3 years,” Denge said.

ALSO SEE: Nairobi’s poor hard hit by rising rent

On Retail Sector Performance Summary, Wacu  Mbugua, Research Assistant at Cytonn Investments,  said  that this year rental yields declined by 0.4%  points to 8.3% from 8.7% in 2016, as a result of a 9.0 percent decline in asking rents and a 2.7% points decline in occupancy rates.

The growth in vacancy rates is attributed to the increase in mall space supply by 41.6% year on year against a stagnated demand.

Elizabeth Nkukuu, Senior Partner & Chief Investment Officer, said that the increase in mall space has been largely driven by intensive investment by mall developers seeking to tap into the widening middle class whose purchasing power has been on a rise and have an appetite for sophisticated lifestyles, as well as infrastructural development.

“We project that by 2020, the retail space supply will have grown to over 6.9 m square feet, which is a 10-yr Compound Annual Growth Rate (CAGR) of 13.7 percent, with the addition retail space such as the Kileleshwa Mall, Cytonn Towers, The Karen Water Front, the new Sarit Centre expansion, among others.

Related: No tenants in sight for Nairobi’s shiny offices

According to the report, the retail space opportunity saw Mombasa and Kiambu regions offer the best investment opportunity to mall investors, due to their low supplies in mall space, both existing and upcoming.

Nairobi was in turn the worst market to invest in country wide owing to its current large supply which accounts for 59.4% of the country’s total supply while also accounting for 49.7% of the upcoming supply in Kenya, indicating that the capital has sufficient supply of retail space.

READ: Ten things you must know before you hit 30 years

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