What to know, How to do due diligence in land transactions
The following is a basic list of what to do for due diligence in land transaction:
- Official search at the land’s registry;
- Official search at Company’s registry;
- Survey records;
- Confirm whether the Land is subject to ongoing litigation;
- Check the possibility of it being public land and the Occupation of the property and site visit to ascertain the status of the property itself.
- Conduct a land search
This search reflects the transactions (change of ownership through deeds) and encumbrances (legal dues) with respect to the land proposed to be transacted upon.
Ideally, what this does is to reveal whether the property has any encumbrances or that it is attached to a third party if at all. The search will also help to determine whether there is a dispute with the land as to restrictions in dealing with the property.
Official search at Company’s registry
It is prudent you get the Registration Certificate as proof that it legally exists. Secondly, you need to seek to have a CR12 in order ascertain that the company has no encumbrance registered against it in the company’s registry.
Survey records
Once properly done, document the survey map that shows the measurements of the property.
In addition, it is important to check into the history of the property. Has it legally changed hands? This is particularly important for property that is prime. Then, ascertain the boundaries! Having a qualified surveyor should resolve this concern. Ensure the land has been properly demarcated by a land surveyor with beacons and make sure a plot number has been assigned
Confirm Whether the Land Is Subject to Ongoing litigation
Often, when property is subject to litigation, the court is likely to put interim measures in place to preserve the property pending the final determination of the suit. Transacting in property that is subject to litigation may present challenges in terms of delays in developing or occupying the property.
Where it is determined that the owner did not acquire proper title to the property, they could be stripped off the same. This could mean years of litigation in trying to recover the purchase price from the seller.
Visit the property physically
Occupation of the Property is important. It is possible to overlook the current occupation of the property. Note that the general assumption is that the property is vacant. Site visiting should be able to determine whether the property is occupied or empty. Given the property could be occupied by persons who have leased the property, trespassers, people who have right of easement or owners by adverse possession. This will ensure that once the transaction is complete, the beneficial owner can enjoy peaceful occupation and or interest as case may be.
By studying the Ndung’u report, you are able to determine the possibility of it being public land. Also, interviewthe neighbours to establish the history of the land. Mostly, the neighbours and local administration i.e. chiefs will know actual owners and the ancestry of the land can be confirmed.
Necessary Documentation
It is important that one verify the authenticity of the documents of the land owner. Generally the required documents are:
- Original land title
- Passport photo and a copy of the seller’s ID card;
- Owner’s KRA Pin number;
- If the land is a leasehold, a rate (if in municipality) and rent clearance certificate should be presented to demonstrate that there are no outgoings that is a liability on the title.
- Consents (From the sellers spouse/Government Authorities)
An advocate should certify the documents’ authentic before presentation to the relevant authorities. If an owner refuses to produce any of the above documents, cancel the transaction immediately as it could be subject to fraud.
The laws.
The principle legal instrument for the land transactions are spread out in various Acts. Even so, there are the major governing laws. Pursuant to the Constitution of Kenya, three Acts of Parliament have been enacted and came into force on 2nd May, 2012:
• Land Act, 2012
• Land Registration Act, 2012
• National Land Commission Act, 2012
Conclusion
The land ministry confirmed numerous cases of property frauds within Kenya in which land surveyors, brokers and lawyers’ team up to unwittingly con people. It is important that to employ judgment and professionalism in the land transactions and process. By following all the required steps, you can avoid being part of fraud. In the alternative, seek professional legal advise! It is important to be mindful of the interest that property possess before making commitments of any kind. In this Article, we took an advisory role.
This Article is intended to be for informational purposes merely. For any queries or need for clarifications, please contact us on info@atandiadvocates.com
