A legal review of Sectional Title in Kenya: Is a Share Certificate Required for Ownership or Transfer of an Apartment?

Assuming you are referring to Kenya’s Sectional Properties Act, 2020 (Cap. 286), the strongest legal basis is section 5, read together with section 17 of the Act and Regulation 18 of the Sectional Properties Regulations, 2021.

1. The key provision: Section 5(1)(b) and (c)

Section 5(1) provides that upon registration of a sectional plan:

• the Registrar opens a separate register for each unit; and
• the Registrar issues, for each unit, a certificate of title (for freehold property) or certificate of lease (for leasehold property), including the owner's proportionate share in the common property.

Further, section 5(5) provides that once the sectional plan is registered, the title to the unit is deemed to be issued under the Land Registration Act, while section 5(6) provides that subsequent dealings with the unit are undertaken in accordance with the Land Registration Act.

Accordingly, where the apartment has already been converted and registered as a sectional unit, the legally recognised evidence of ownership is the registered certificate of title/certificate of lease for the unit—not a share certificate.

2. The share in the common property is already attached to the unit

Section 6(1) is also important. It provides that the owner's share in the common property is included in the unit's register and on the title issued for the unit. Section 6(2) provides that the common property is held by the unit owners as tenants in common in shares proportional to their respective unit factors.

Therefore, the purchaser does not need a separate share certificate to evidence ownership of the common property. The relevant share is statutorily appurtenant to and reflected on the title to the sectional unit.

3. The Corporation is different from a conventional management company

There is an important distinction here. Under section 17, registration of a sectional plan automatically constitutes a Corporation comprising the owners of the units. The Corporation is therefore fundamentally an owners' body rather than a separate entity in which ownership of the apartment itself is represented by a share certificate.

The Regulations reinforce this position. Regulation 18 deals with the conversion of existing long-term leases into sectional units and expressly contemplates that, upon conversion, the respective owners will receive certificates of lease or title under the Sectional Properties Act. It also recognises the situation where shares in an existing management company have not yet been issued to owners.

The prescribed Forms SP 11–SP 14 similarly demonstrate that the statutory registration system is based on a unit register and certificate of title/certificate of lease, rather than a share certificate as evidence of title to the apartment.

Important qualification

I would not frame the legal position as an absolute proposition that "a purchaser of an apartment never requires a share certificate." That could be challenged depending on the age and structure of the development.

For older developments held under long-term leases through a management company, the sale agreement or the original structure of the development may have provided for the purchaser to receive shares in the management company. Indeed, Regulation 18(3) specifically refers to circumstances where shares in the management company have not been issued to the owners as per the agreement.

There is also recent Kenyan case law dealing with this distinction. In Kanyi & 3 Others v Nextgen Office Suites Ltd & 4 Others [2023], the Environment and Land Court observed that under the sectional property regime, unit owners become members/shareholders of the Corporation upon registration of their leases, and that the developer has a duty to undertake conversion where applicable.

If you are making this argument I would put it approximately as follows:

The requirement for production of a share certificate as evidence of ownership of the apartment is not supported where the property has been duly converted and registered under the Sectional Properties Act, 2020. Pursuant to section 5(1)(b) and (c) of the Act, a separate register is opened in respect of each sectional unit and the Registrar issues a certificate of title or certificate of lease in respect thereof. Further, section 6 provides that the proprietor's proportionate share in the common property is incorporated in and forms part of the title to the sectional unit. Accordingly, the certificate of title/certificate of lease issued in respect of the unit constitutes the relevant documentary evidence of ownership, and a separate share certificate is not required to establish title to the unit.