Legal Review: Laws Governing Land Ownership by Foreigners

 

1.0 Introduction/General Overview

This is a question that many foreigners who have or had intentions and interest in investing in Kenya have to ask themselves before committing to any investment in the county.

Prior to the promulgation of the new Constitution, there existed a misconception in Kenya that a foreigner cannot own land in Kenya and the law was not clear on ownership of land by foreigners and the rights they enjoy as landowners in Kenya. This led to many foreigners who were interested in owning land in Kenya to make arrangements like acquiring land through proxies or third-party nominees which led to many of them losing their land or being duped.

This was the case in Hartmann v Mbogo (Civil Case 222/2007) where the Plaintiff jointly registered the Property with the Defendant on the Defendant false representation that a foreigner alone cannot own land in Kenya.

2.0 Are there any Laws in Kenya Governing Land Ownership by Foreigners?

2.1 Legal Analysis

Article 40 of the Constitution of Kenya 2010 grants the right of ownership of land to any person in any part of Kenya meaning that any one in Kenya whether a Kenyan citizen or a non-citizen can own land in Kenya. The said Article 40 is however subject to and is to be read with Article 65 (1) of the Constitution which sets out restrictions to the limitations as to the land tenure which a non-citizen can own. The distinction of land acquisition in Kenya for a foreigner or non-citizen and a Kenyan citizen lies in the tenure which the property can be held and some restrictions on ownership of agricultural land by foreigners.

The Parliament has passed several laws relating to ownership of land in Kenya. Land Registration Act No. 3 of 2012, Land Act no.6 of 2012 and the National Commission Act.

Therefore, the position of Land ownership by foreigners in Kenya is clear in that they can own Land and the only limitation is the tenure which they can hold land limiting them to a Leasehold of not more than Ninety-nine (99) years.

2.2 Legal Provisions

There are various that govern land acquisition and ownership of land by foreigners in Kenya and they are as follows: –

2.2.1 The Constitution

The Constitution under Article 65 limits the tenure which the foreigners can hold land to only Leasehold of less than 99 years. It is imperative to note that contrary to earlier views based on wrongful interpretation of the Article 65 of the Constitution, there is no prohibition of foreigners acquiring or owning freehold land. The constitution only restricts ownership to a leasehold of 99 years.

This position was upheld by the High Court in the case of Kunde Road Residents’ Welfare Association Versus Deshun Properties Company Limited & Four Others (ELC PETITION NO. 1433 OF 2013).  Justice Gacheru observed that:

“…The Constitution at Article 40 guarantees ownership of land in Kenya by any person. Granted, this provision is not absolute as it is subject to Article 65 thereof which restricts land to be held by noncitizens only as leasehold of a term of 99 years and no more. Article 65(2) of the Constitution, in my view, envisages a situation where non-citizens can enter into transactions for acquisition of interest in land that is freehold. Indeed there is no law that prohibits non-citizens from acquiring and owning freehold land, the Constitution however restricts that ownership to leasehold of a period of 99 years. It is therefore my finding that the transfer of the property in question, though the interest therein being freehold to the 1st Respondent being a non-citizen is not illegal as alleged. The bottom line is that the 1st Respondent has acquired 99 year leasehold interest…”

In the event that a Kenyan citizen sells the freehold interest to a foreigner and the freehold tenure is converted to Leasehold the property cannot be converted again to freehold tenure after the expiry of the leasehold term.

The Constitution also restricts a non-citizen from owning freehold property under a trust and provides that any property held in trust shall be regarded as being held by a citizen only if all the beneficial interest of the trust is held by people who are citizens.

After the expiry of the Leasehold term the foreigner can apply for a renewal of the Lease term or an extension of Lease. Unlike citizens, foreigners do not enjoy an automatic right of renewal or extension of a lease on expiry. Section 12(7) of the Act provides that upon expiry, termination or extinction of a lease granted to a foreigner, the land shall vest in the government.

2.2.2 The Land Act

Section 12 (5) of the Land Act allows the National Land Commission to allocate land to foreign governments on a reciprocal basis in accordance with the Vienna Convention on Diplomatic Relations. This is however subject to the Constitution and any other relevant law and consultation with the National and county governments.

The Act was amended in 2016 to introduce a new section – 12A – which requires foreigners to obtain consent to purchase 1st and 2nd row properties. This was however challenged in court leading to suspending the application of these sections until the matter is fully heard.  More details are under Section F below.

2.2.3 Land Registration Act

The Land Registration Act in section 107 (3) reiterates the provisions of Article 65 of the Constitution that the maximum leasehold period that may be granted to a  foreigner is 99 years.

2.2.4 Land Control Act

The Land Control Act (the Act) restricts the ownership by non-citizens of agricultural land or land within land control areas The Act in section 9 as read with section 6 provides that any dealing in agricultural land or controlled land the purported effect of which is to sell, transfer, lease, charge, partition or exchange land with a non-citizen is void for all intents and purposes.

There are two ways in which a foreigner can own agricultural land;

·        Through an application for exemption to acquire agricultural land by the President under section 24; and

·        Through owning shares in a public company that owns agricultural land.

Legal Explainer: Arbitration as an alternative means of dispute resolution

 

 

INTRODUCTION

Arbitration is a form of alternative dispute resolution where two parties make their arguments to an arbitrator who is a neutral third party. It is a private dispute resolution process that parties choose and it is consensual. Arbitration happens if the parties agree that it will be their form of dispute resolution, for instance, if there is a breach of contract, through an arbitration clause contained in the contract.

TYPES OF ARBITRATION

1. Ad hoc arbitration

This type of arbitration is not usually administered by a specialized institution and the parties and arbitrators independently determine the procedure. Parties make arrangements for the selection of arbitrators, for designation of rules, applicable law and procedures.

Ad hoc proceedings are more flexible, cheaper and faster than the administered proceeding and it is also a popular type of arbitration because there need not be any administrative fees.

2. Institutional arbitration

This is where parties designate an institution to administer the arbitral process in accordance with its arbitration rules. However, it is not the institution that arbitrate the dispute; it is only the rules of that institution that are used.

ARBITRAL AWARDS

An arbitration award is the award granted by the arbitrator in their decision and the award can be money, that one party has to pay to the other or even an injunctive relief.

It is not easy to appeal an arbitration award because the court has to be satisfied that there was some prejudicial conduct before the court ‘interferes.’The court must be satisfied that an arbitrator’s decision is seriously wrong before it intervenes. Like in the case of Mi Copen SR v the Shipowners’ Mutual Protection and Indemnity Association, the judge held that for an appeal to be successful, there must be an error of law and not just an error of fact.

A foreign arbitral award is when an arbitration award given in one state and it is to be enforced in another state.

LEGISLATIVE FRAMEWORKS

1. Arbitration Act CAP 49 of 1995

Section 2 states that the act shall apply to domestic and international arbitration.

The Act also states that an arbitration is international if: 

(a) the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different states; 

(b) one of the following places is situated outside the state in which the parties have their places of business— 

(i) the juridical seat of arbitration is determined by or pursuant to the arbitration agreement; or (ii) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or 

(c) the parties have expressly agreed that the subject-matter of the arbitration agreement relates to more than one state.

Section 36 provides that an international arbitration award shall be recognized as binding and enforced in accordance to the provisions of the New York Convention or any other convention to which Kenya is signatory and relating to arbitral awards. Sub-section 3 further states that unless the High Court otherwise orders, the party relying on an arbitral award or applying for its enforcement must furnish: 

(a) the original arbitral award or a duly certified copy of it; and 

(b) the original arbitration agreement or a duly certified copy of it. 

If the arbitral award or arbitration agreement is not made in the English language, the party shall furnish a duly certified translation of it into the English language.

The court can also refuse to enforce an arbitral award at the request of the party against whom it is invoked if they proof to the court that a party to the arbitration agreement had some form of incapacity, the arbitration agreement was invalid, there was failure to adhere to the due process, for instance, the party against whom the arbitral award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; also if there was infringement on the scope of the arbitration agreement, the arbitral tribunal did not have jurisdiction or the making of the arbitral award was induced or affected by fraud, bribery, corruption or undue influence.

Moreover, if the High Court finds that: 

1. the subject-matter of the dispute is not capable of settlement by arbitration under the law of Kenya; or 

2. (ii) the recognition or enforcement of the arbitral award would be contrary to the public policy of Kenya.

Like in the case of Royal Exchange PLC vs. Patrick Nyaemba Tumbo [2019] Eklr, the Court denied recognition and enforcement of the International Arbitral Award on the ground that the Respondent was not served with the requisite arbitration process notices and pleadings and was therefore denied an opportunity to participate in the arbitration. The said actions were held to be in contravention of the Respondent’s right to fair hearing and fair administrative action.

So, the Kenyan courts are fairly strict in scrutinizing the International Arbitral Awards against the provisions of section 37 of the Act to ensure the award is in consonance with Kenya’s minimum thresholds of justice.

2. Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (Washington Convention)

It establishes the International Centre for Settlement of Investment Disputes and article 1 provides that the purpose of the Centre shall be to provide facilities for conciliation and arbitration of investment disputes between Contracting States and nationals of other Contracting States.

Kenya is party to this Convention, in addition, article 36 provides that:

1. Any Contracting State or any national of a Contracting State wishing to institute arbitration proceedings shall address a request to that effect in writing to the Secretary-General who shall send a copy of the request to the other party.
   
   

2. The request shall contain information concerning the issues in dispute, the identity of the parties and their consent to arbitration in accordance with the rules of procedure for the institution of conciliation and arbitration proceedings.

3. The Secretary-General shall register the request unless he finds, on the basis of the information contained in the request, that the dispute is manifestly outside the jurisdiction of the Centre. He shall forthwith notify the parties of registration or refusal to register.

3. The United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Abitration

This Model Law is designed to assist States in reforming and modernizing their laws on arbitral procedure so as to take into account the particular features and needs of international commercial arbitration. It covers all stages of the arbitral process from the arbitration agreement, the composition and jurisdiction of the arbitral tribunal and the extent of court intervention through to the recognition and enforcement of the arbitral award. It reflects worldwide consensus on key aspects of international arbitration practice having been accepted by States of all regions and the different legal or economic systems of the world.

It has also warranted greater predictability and certainty in carrying out arbitration and the Model Law provides essential elements as a legal framework during arbitration proceedings, as well as provides special procedural regime for international commercial arbitration.

The Arbitration Act 1995 (as amended in 2010) is based entirely on the UNCITRAL Model Law. Initially, it was a mirror copy of the Model Law, but with the 2010 amendments, the Act now encompasses recent developments in arbitration practice and procedure, like in:

• Section 16(A) and (B) on withdrawal and immunity of an arbitrator.

• Section 19(A) on equal treatment of parties.

• Section 32(A), (B) and (C) on the effect of awards, costs and expenses, and interest.

4. New York Convention: United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (of 10 June 1958)

The convention’s field of application

Article 1 of the New York convention provides for the field of application of the convention. The title of the convention refers to recognition of ‘foreign arbitral awards’. there is hence need for the arbitral awards to be foreign. Article 1 of the convention defines this to mean an arbitral award issued in the territory of another state other than the state where recognition and enforcement are sought. It hence applies to awards made in any other state. Article 1(3) of the convention however allows a state when making an application to ratify the convention, to make a reservation that it will only apply the convention with regards to other contracting states only. This means that arbitral awards made by non-contracting states will not be guided by the New York convention.

The arbitration agreement

Article 2(1) provides that Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.

 2. The term “agreement in writing” shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams.

 3. The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.

Procedure (for recognition and enforcement of foreign arbitral awards.)

Article 3 provides that Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.

The Article hence provides that the procedure of recognition and enforcement of foreign arbitral awards will follow the same procedure as domestic awards in the country where recognition and enforcement is sought.

Article 4 provides that to obtain the recognition and enforcement mentioned in the preceding article, the party applying for recognition and enforcement shall, at the time of the application, supply:

 (a) The duly authenticated original award or a duly certified copy thereof;

 (b) The original agreement referred to in article II or a duly certified copy thereof. 

If the said award or agreement is not made in an official language of the country in which the award is relied upon, the party applying for recognition and enforcement of the award shall produce a translation of these documents into such language. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent.

Grounds for rejection of recognition or enforcement

Article 5 provides that Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that: 

(a) The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or 

(b) The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; 

A court in Bremen, Germany, refused to enforce an award made in London because the German party against which enforcement was sought had not been informed of the other party’s arguments. The facts of the case, as reported, indicate that the German party submitted documents to the arbitral tribunal and thereafter received no other communication from the arbitrators until the award.

A court in Naples, Italy, refused enforcement of an award made by the Arbitration Board of the Commodity Exchange in Vienna, finding that one month’s notice given to the Italian respondent to attend the hearing in Vienna was insufficient as during that very period the area where the respondent was located was hit by a major earthquake.

(c) The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or

 (d) The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; 

Case:-The arbitration clause in question provided for arbitration by two party-appointed arbitrators who ‘in the event of disagreement’ would select a third arbitrator. The clause provided also that the third arbitrator would be appointed by the Commercial Court in Luxembourg if the two arbitrators were unable to agree on the third arbitrator. When a dispute arose, each party appointed an arbitrator (a French accountant and a New York lawyer). After discussions between the two arbitrators relating to procedure but not the merits, the French accountant requested the Luxembourg court to appoint a third arbitrator, which it did. The New York lawyer objected that this appointment was premature and refused to participate in the arbitration. The enforcement of the award made by two arbitrators, (i.e. a party appointed arbitrator and the third arbitrator) was refused in the United States on the ground of violation of the parties’ agreement on the composition of the arbitral tribunal.

 (e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

Article 5(2) continues to say that recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:

 (a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or 

(b) The recognition or enforcement of the award would be contrary to the public policy of that country.

5. Enforcement of foreign arbitral awards at Common Law.

The basic elements for the successful enforcement of a foreign arbitration award in England are that the parties submitted to the arbitration, that the arbitration was conducted in accordance with the submission and that the award is valid by the law of the country in which it was made.

There must be a valid submission to arbitration, either in the form of an arbitration clause contained in a substantive contract or a free-standing agreement to arbitrate. The material validity, scope, interpretation and effect of an arbitration agreement are determined by its proper law. the proper law of the arbitration agreement is the law chosen by the parties expressly or impliedly; in the absence of choice, it is the system of law with which the arbitration agreement has the closest and most real connection.

The recognition and enforcement of a foreign arbitral award seems to be subject to the obvious defenses that the arbitrator lacked jurisdiction, that the award was obtained by fraud, that its recognition and enforcement would be contrary to English public policy and that it was obtained in proceedings which contravene the rules of Natural justice.

THE INSTITUTIONAL FRAMEWORK FOR THE ENFORCEMENT OF FOREIGN ARBITRATION AWARDS IN KENYA

In Kenya, a party seeking the recognition and enforcement of an International Arbitral Award, applies to the High Court of Kenya under sections 2 and 36 of the Arbitration Act No. 4 of 1995 (as amended in 2009) (the “AA”). This means that the High Courts of Kenya are the only courts mandated to enforce the foreign arbitral awards in our jurisdiction. It need be noted that the provisions of the Arbitration Act replicate those of the New York Convention in as far as recognition and enforcement of an International Arbitral Award is concerned.

The New York Convention together with Kenyan case law on the subject have established that a party applying for the recognition and enforcement of an International Arbitral Award bears the burden of proving the recognition of the arbitration agreement from which the Award arises. The Applicant therefore must prove to the satisfaction of the court that there exists an agreement in writing under which the parties undertook to submit all or any differences between them to arbitration in respect of a defined legal relationship, whether contractual or not concerning a subject matter capable of settlement by arbitration. Where this burden is discharged and the Applicant furnishes the court with the original or duly certified copy of the arbitral award together with the original or duly certified copy of the arbitration agreement and any translations thereto (where a language other than English is used), the award is deemed to be enforceable unless opposed by the party against whom the award is invoked i.e. the objector 

While Kenya signed the New York Convention with a reciprocity reservation to the effect that it may choose to only recognize and enforce International Arbitral Awards from corresponding signatory states and citizens, section 37 of the Arbitration Act allows for the non-enforcement of any and all arbitral awards irrespective of the state in which the award was made, on the aforementioned grounds.

THE ISSUE OF APPEALS

Until 2019, the legal framework in Kenya was well settled. Where an objection succeeds and a determination made that an International Arbitral Award is unenforceable, the Applicant has no further recourse, even by way of an appeal. This means that international arbitral awards have no appeals. The High Court’s ruling is final.

Section 39(3) states that;

Notwithstanding sections 10 and 35 an appeal shall lie to the Court of Appeal against a decision of the High Court under subsection (2):

(a) if the parties have so agreed that an appeal shall lie prior to the delivery of the arbitral award; or

(b) the Court of Appeal, being of the opinion that a point of law of general importance is involved the determination of which will substantially affect the rights of one or more of the parties, grants leave to appeal, and on such appeal the Court of Appeal may exercise any of the powers which the High Court could have exercised under subsection (2).

(4) An application or appeal under this section shall be made within the time limit and in the manner prescribed by the Rules of Court applicable, as the case may be, in the High Court or the Court of Appeal.

(5) When an arbitral award has been varied on appeal under this section, the award so varied shall have effect as if it were the award of the arbitral tribunal concerned.

When an arbitral award has been varied on appeal under this section, the award so varied shall have effect as if it were the award of the arbitral tribunal. However, on 6 December 2019, the Supreme Court of Kenya in Nqutu Agrovet Limited vs. Airtel Networks Limited determined that an appeal may lie from the High Court to the Court of Appeal under section 35 of the Arbitration Act where the High Court in setting aside a domestic arbitral award has stepped outside the grounds in the said section and thereby made a decision so grave, so manifestly wrong and which has closed the door of justice to either of the parties.

This decision has opened up controversy as to whether the right of appeal recognized by the Supreme Court should extend to a decision of the High Court not to recognize and enforce and International Arbitral Award based on the grounds envisaged under section 37 of the Act which so happens to be the exact same grounds envisaged under section 35 and especially where the International Arbitral Award can only ever be enforced in the said jurisdiction. 

Finally, the High court will also refuse recognition or enforcement of the arbitral award if it finds the subject matter of the dispute not capable of arbitral settlement under Kenyan law or finds the recognition or enforcement to be contrary to public policy. In Tanzania Roads Agency vs Kurdan Singh through an application dated 15th January, 2013, the appellant, Tanzania National Roads Agency, sought the following orders from the High Court at Mombasa:

That the international Arbitral Award from Stockholm Chamber of Commerce No. V:09/2009 between Kundan Singh Construction Limited (as claimant) and Tanzania National Roads Agency (Respondent) dated 25th January, 2012 together with interpretation and clarification of the same dated 8th March, 2012 be recognized and enforced as a decree of this court.   

The genesis of the dispute giving rise to this appeal can be traced back to a contract entered into between the appellant and the respondent on 1st August 2007, through which the respondent agreed to undertake upgrading works on the Mbeya- chunya- Makongolosi Road Section 1: Lwanjilo in Tanzania at a consideration of Tshs. 27,463,878,000/. The contract provided for resolution of any dispute initially through a reference to the Disputes Resolution Board, and thereafter a further reference for arbitration to the Stockholm Chamber of Commerce by any party still dissatisfied.

[4] As anticipated, a dispute arose between the parties and the dispute having been addressed by the Dispute Resolution Board, and the respondent being dissatisfied, referred the matter to the Arbitration Institute of the Stockholm Chamber of Commerce for arbitration. The arbitration proceedings were carried out by a panel of three arbitrators who determined the dispute through a majority award dated 25th January, 2012 signed by two arbitrators, one arbitrator dissenting. This is the award that the appellant moved to the High Court at Mombasa to enforce. Meanwhile, the respondent, being dissatisfied with the award, challenged the award through an appeal before the Stockholm Court of Appeal.

[5] The respondent had also filed an application dated 24th April, 2012 before the High Court in Nairobi seeking orders that part of the majority award which allowed the counterclaim of the appellant in the arbitration proceedings be set aside or alternatively, that part of the majority award be remitted to the majority arbitrators to decide the same, applying Tanzanian law which the parties to the arbitration specifically agreed would govern the arbitral proceedings.  A preliminary objection was taken in regard to that application on the grounds that the Kenyan Courts had no jurisdiction to set aside an international arbitral award.  That objection was upheld by Havelock, J. when he ruled on 18th December, 2012, that Sweden is the country of the primary jurisdiction in relation to the arbitration and that Kenya only had a secondary jurisdiction in terms of recognition and enforcement of the arbitral award.

 The learned Judge Muya, J. delivered a ruling dated 15th August, 2013, in which in  his ruling, Muya, J. held inter alia that under sections 36 and 37 of the Arbitration Act, Chapter 49 of the Laws of Kenya hereinafter referred to as the Arbitration Act, the Court in Kenyan had jurisdiction to recognize and enforce any arbitral award irrespective of the country in which it was made, save that the recognition or enforcement of the award could be refused where the court finds that the recognition or enforcement of the award would be contrary to the public policy of Kenya; that  the arbitration award was arrived at in breach of the express terms of the agreement between the parties which provided  that the arbitration shall be governed by the law of Tanzania; and that enforcing such a contract would be contrary to the public policy of Kenya.

As determined in Loucks vs. Standard Oil Company, the court will refuse to enforce or recognize a foreign right unless it would violate some fundamental principles of justice; some prevalent conception of good morals; some deep root tradition of common weal. It has become acceptable that this is the definition of public policy.

The International Chamber for Commerce

Under this institution there exists an international court of arbitration. Members of the court are appointed by the council of the international chamber of commerce. The functions of the court are to provide for the settlement by arbitration of business disputes of an international character in accordance with the Arbitration rules of 2021.

Legal Review: The Steps Involved whiled Conducting Due Diligence in Land Purchase Transaction

 

The following are the processes involved when conducting due diligence on a property you intend to purchase or any other land-related transaction:

1. Title Search: Begin by verifying the land's title deed at the Ministry of Lands. This confirms the current owner, land size, and any restrictions or encumbrances.

2. Physical Inspection: Visit the property to confirm its existence and the accuracy of its details, such as boundaries, land size, and topography.

3. Land History: Investigate the land's history, including any past transactions, disputes, or subdivisions. This can be done by examining land records and speaking to neighbouring landowners.

4. Land Ownership: Ensure that the person selling the land is the legal owner, and there are no disputes or third-party claims.

5. Liabilities and Debts: Check if the land has any unpaid rates, taxes, or mortgages. These can affect your ownership rights and incur additional costs.

6. Survey and Beacon Information: Review the land survey and beacon information to confirm that the property's boundaries are accurate.

7. Environmental Compliance: Investigate whether the land is compliant with environmental regulations and zoning requirements. This is crucial for future land use.

8. Community and Neighbors: Interact with the local community and neighboring landowners to gain insights into the land's history and any potential issues.

9. Legal Documents: Consult a legal expert to review all documents, contracts, and agreements related to the land purchase.

10. Expert Assistance: Seek the assistance of professionals, such as land surveyors, real estate agents, and lawyers, to ensure that all aspects of due diligence are properly conducted.

Conducting due diligence in land purchase is a comprehensive process that demands thorough research, attention to detail, and professional guidance. By following the steps outlined in this guide, you can safeguard your investment and avoid potential legal disputes or financial losses in Kenya's intricate land market. Remember that due diligence is not an option but a necessity when purchasing land, as it ensures that you acquire property with clear legal status and market value.

Legal Review: Transfer or Acquisition of Title to Land through Succession Process

 

 1.0 Introduction

People make investments, acquire property, and most times fail to address the question on what happens when they cease to exist. Very few utilize the power to dictate how their property is to be done.

The focus of this article will basically be to analyze/guide in the context as to how property is transferred to those who survive the deceased owner, and thus Intestate Succession will be the focus herein.

2.0 Analysis/Discussion

Succession is the process is action of inheriting title/property undertaken by the beneficiaries of a deceased person. It is a process that is compulsorily undertaken to ensure that the property of any nature is passed on to the beneficiaries.

Majority of the people who survive the deceased know little guidance as how to undertake succession process when their loved one dies and are left fighting for the deceased property in most circumstances.

Administration of the estate of the deceased is very crucial and has to be done within a reasonable timeline to avoid disputes that arise out of inordinate delays.

The Law of succession is governed by the Laws of Succession Act (CAP 160) which outlines the manner in which one can distribute the wealth of deceased person.

When a person dies, two situations arise, he either dies with a will (Testate) or without a will (Intestate).

3.0 Starting the process of Administration of the estate of the Deceased.

To begin with, one goes to the area chief of the place the Deceased resided for issuance of a letter of recognition which identifies the person and notes that at the point of his death he resided in his location and left the listed persons as his beneficiaries.

The process is then followed by filing of a Petition in Court. The Petition is filed by either of the surviving dependants of the deceased either the deceased’s spouse or the children so as to obtain Letters of Administration over the deceased’s property. If the deceased dependants cannot agree on a suitable representative to petition, the authority decides on who to file the petition among the dependants. There is an allowance of up to 4(Four) administrators allowed to file the petition for purposes of fair representation.

The Petition filed in court is to be accompanied by other documentation which include:

a.     A letter from the local area administration (County Commissioner/Chief or equal rank) addressed to the Court and providing the particulars of the dependants to the deceased person.

b.    An Affidavit that provides sufficient details identifying the assets and liabilities of the deceased together with particulars of the dependants, their relation of the deceased, and their ages.

c.     An Affidavit of justification of proposed administrator (s) stating the network of the proposed administrators.

d.    An Affidavit of justification of proposed sureties sworn by two people acting as sureties of the proposed administrator(s) with sureties executing a guarantee that they will make good any loss which the deceased’s estate may suffer if the administrator breaches the duties assigned in the course of administration of the estate to an ascertained limit.

e.     A Consent by all persons legally entitles to obtain grant of letters of administration approving agreeability to the petition.

Once filed, the petition is filed in the Kenya Gazette as notice to the public notifying the application for Grant of letters of administration. After 30 days if no objection is raised the grant of letters of administration is granted to the Petitioner.

The Grant of letters provides the administrator power to manage the assets of the deceased but not powers to distribute the deceased’s estate.

After Six months from the date of issue of letters of administration, the same is confirmed and a certificate of Confirmation of Grant is issued which gives the administrator powers to distribute the estate of the deceased.  Within the 6(six) months, the beneficiaries agree on the distribution mode.

Notably, intermeddling is an offense in the succession process.

Additionally, a child as a beneficiary may be of two ways, biological of adopted child of the deceased.

4.0 Land Transfer Process

The administrator at this point files the Confirmation of Grant alongside the Form LR39 to change the title over the property through Transmission to the named of the Administrator. Thereafter, the administrator files form LR42 to have the property transferred to the rightful assigned owner of the property as per the Grant and in which the completion documents are handed to the Commissioner of Lands for review, approval and issuance of new title in the names of the beneficiaries. The documents include; Form LR42, New Land number arising from the mutation, Confirmation of Grant, and the Kenya Gazette Notice.

5.0 Conclusion

As noted hereinabove, the process of transferring land is not a complicated process as such. If one identifies an Advocate, the process is initiated as appropriate, and he/she will walk you through the process till completion.