Article 4.0, Part (i)... every person has the right, either individually or in association with others, to acquire and own property (a) of any description; and (b) in any part of Kenya. - Constitution of Kenya.
Due diligence as relates to real estate transactions, is the process of gathering relevant and authentic information about the prospective property and primarily involves one’s confirmation of the current and historic ownership, size, dimensions and encumbrance status of the property. People often fear investing in property because of the many horror stories they have seen, heard or read about. Doing your due diligence exhaustively, will save you from those bad experiences and losses.
Consider these steps and legal structures when doing your due diligence:-
Step 1: Land scouting
- Being crystal clear about your goals and the specific purpose for your investment, take time to scout for the land with someone you trust and that has the competence to advise you on its merits and/or demerits.
- Once the suitable land has been identified, meet with the registered owner(s) and no one else. Along with the original and certified copies of the property’s title deed, be sure to request them for their primary personal identification documents like their National I.D card, company registration certificate (if the registered owner is a company) and Kenya Revenue Authority P.I.N. Certificate. If you are provided only copies, ensure that they are certified copies.
- Interview the neighbours to confirm the ownership of the land, especially in the rural parts of Kenya where absentee land ownership is common. This could allow you to learn details about the ancestry and history of the of land’s owners, which a formal land search report from the Ministry of Lands registry cannot give you. It is not advisable to invest in land that is encumbered by unresolved disputes between its owners and/or between its owners and their neighbours.
- Be wary or cautious of offers from land sellers who ask for less than what the land is worth. Engage a professional, licensed valuer or a real estate agent who understands the area to advise you.
Step 2: Do a land search
A land search will reveal the following;
- The current registered owner(s) of a property and the duration of their ownership.
- The current encumbrance(s) against the title deed, like bank loans, court judgements or “cautions” by any interested parties.
Fill in the Search Application form and submit it to the relevant registrar of lands office, together with
- A copy of the title deed (preferably a certified copy) to the prospective property.
- A copy of your ID.
- A copy of your KRA PIN certificate.
Once processed, the registry will issue you the search report, detailing the status of the title in question.
If unable to conduct the land search yourself, hire a licensed advocate of the High Court of Kenya. Be sure to confirm the validity of their current practise license with the Law Society of Kenya, as each advocate must make annual renewals of their license to practice law within the Republic of Kenya.
Step 3: Obtain a certified copy of the green-card
After you have obtained an official search report, make a formal request for a certified copy of the “Green-card” to the prospective property. We have found that it is much easier to have your licensed advocate make this formal request by letter, to the relevant Ministry of Lands registrar along with paying the prescribed fee (typically Kshs.2,500/-) to the Ministry of Lands’ cash office at the registry. The green-card is a literal green leaf of manilla-card (in most cases) that sits in the property’s file at the Ministry of Lands’ registry. It is the main document of reference by the Ministry’s officers when producing the search report that you initially applied for.
About the green card
One of the common ways fake owners con people in the marketplace is by colluding with the officers in the lands registry. For example, when you want to buy a piece of land, the fake owner shows you the land. He then tells the registry clerk that when such a person comes to do a search, let the search report show that I am the real owner.
Even though the search report and the certified copy of the green-card can be requisitioned simultaneously, we recommend that one obtains the search report first. In this way, one can investigate further or pull out of the process, should the search report provided initially, have any discrepancies when compared to the details contained on the certified copy of the green-card obtained afterwards. Because the search report details the record on the green-card, requisitioning the search report first simply ensures independently accurate representations by the Ministry’s officials on both documents, which would be a strong endorsement of the true status of the prospective property.
Thank you for reading. That is all for today, come back next week for the rest of the steps to complete your due diligence process. Until then, have a blessed week and Merry Christmas!
Our Value Proposition:
As a Kenyan real estate investment and trading company serving investors since 2012, we endeavour to make savvy and strategic investments in pre-developed raw land in specific regions of Kenya. Unlike property agents or brokers, we only sell land that we wholly own, thereby ensuring the safe and accountable passage of real property and wealth to our valued customers.
We provide our customers with consistently robust, short and medium-term capital and equity gains, created by the upsurge in property values which are driven by an increase in demand due to the developments.
We at Goshen Acquisitions are guided by an unwavering belief that the legal integrity of our transactions must be founded on irreproachable moral integrity. We have no tolerance for corruption and take no shortcuts in the due processes necessary for your secure land ownership.
–Goshen Acquisitions Ltd.
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