Why Registering Your Commercial Lease is Non-Negotiable

Introduction

Signing a commercial lease for more than two years? Don’t stop there—get it registered.

Many businesses assume that a signed lease is all they need for security. However, failing to register your lease exposes you to serious risks such as :

•  If the property is sold, the new owner isn’t obligated to honour an the terms of an unregistered lease.
•  If the landlord takes a loan, the financier’s rights may override yours.
•  If the landlord becomes insolvent, an unregistered lease may not be recognized.
•  If land use changs, tenants may be displaced without consultation.
•  Government directives affecting the property could sideline unregistered tenants.

The legal provisions:

The Land Act and Land Registration Act provide clear guidance:

• Short-term leases do not require registration. (Section 58 of the Land Act)
•  A valid and enforceable lease is created only upon registration. (Section 43(2) of the Land Registration Act)Registration confers and protects the Tenants' Interests. (Section 24 of the Land Registration Act)
•  An unregistered lease may just be treated as a private contract between the tenant and landlord. (Section 36(2) of the Land Registration Act)

Conclusion:
Ensure your lease is registered—whether manually or via Ardhisasa (for Nairobi properties)—to secure your tenancy rights.