When it comes to buying land, due diligence is crucial to ensure a smooth and secure transaction. Whether you are purchasing land from an individual or a company, there are certain steps you need to take to protect your interests. In this article, we will discuss the due diligence process, including verifying the legitimacy of documents, understanding land titles, and protecting yourself as a buyer.
1. Due Diligence on Land Sellers:
When buying land from a company, such as Grand Acres, the due diligence process is similar to buying from an individual. However, instead of an ID, you will receive a certificate of registration for the business. Other important documents to request include the PIN certificate, CR 12, which disclose the shareholding of the company. Additionally, you can ask for copies of the directors’ IDs and PIN certificates, as these are required during the transfer process.
2. Verifying Land Titles:
For many buyers, understanding land titles can be challenging. To ensure the legitimacy of land titles, it is recommended to work with a licensed advocate of the high court of Kenya. They can help you verify the ownership of the land by conducting a search at the registry. Additionally, you can request a certified copy of the green card, which provides further evidence of ownership. By obtaining these documents, you can demonstrate that you have done your due diligence in checking the legitimacy of the land titles.
3. Certifying Land Size:
When buying land, it is essential to verify the size of the property. To certify the acreage, you have the option to hire an independent surveyor before finalising the transaction. This step ensures that the land size matches the seller’s claims. By paying a deposit, ideally to an escrow account, you can secure the land while conducting the necessary surveys.
4. Using Escrow for Secure Transactions:
Escrow accounts provide an added layer of security for both buyers and sellers. When purchasing land from Goshen Acquisitions, for example, escrow is used for pre-selling transactions or when the titling process is not yet complete. By paying funds into escrow, you can ensure that your money is protected until all conditions are met. This prevents any potential issues, such as delays in producing title deeds, from affecting your transaction.
5. Signing Sale Agreements:
To initiate the land transaction, it is customary to sign a sale agreement. This agreement should be professionally prepared by a licensed advocate specialising in conveyancing. The sale agreement should include clauses that protect both the buyer and the seller. Key clauses to consider include vacant possession, ensuring there are no occupants on the property, and allowing sufficient time to complete the transaction.
Buying land requires thorough due diligence to protect your investment. By following the steps outlined in this article, such as verifying documents, understanding land titles, and using escrow, you can ensure a secure and successful land transaction. Remember to work with licensed advocates who specialise in conveyancing to guide you through the process and protect your interests.
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