Buying or selling property in Nairobi is a thrilling milestone, but navigating the legal process known as “conveyancing” can be complex without expert guidance. Below is a step-by-step guide to help you navigate the process smoothly: 

Conveyancing

Conveyancing is the legal process of transferring property ownership from one person to another. It involves several stages, which can be grouped into three broad themes: pre-contract, contract, and completion. 

  1. Pre-Contract Stage

This is the initial phase of the conveyancing cycle where the groundwork is laid before parties enter into a legally binding contract. The purpose of this stage is to gather all the necessary information about the transaction to ensure that both parties can proceed confidently. Key activities include: 

  • Instructing a Qualified Advocate: The seller (Vendor) and the buyer (Purchaser) must appoint a legal representative to handle the Conveyancing process. According to the Advocates Act, only advocates with current practising certificates can prepare conveyancing documents.
  • Conducting Due Diligence and Searches: Due diligence is the process of verifying key factors that may affect the integrity or legality of a transaction. In conveyancing, purchasers are strongly encouraged to conduct through investigations because the doctrine of caveat emptor (“let the buyer beware”). The level of due diligence required varies with the nature of the transaction, but it generally includes:
    • Official search – This confirms the Vendor’s ownership of the property and reveals any existing encumbrances registered against the property’s title, such as mortgages, caveats or restrictions. 
    • Historical search – This traces past transactions involving the property to identify any ownership disputes.
    • Local authority searches – This determines whether the property complies with zoning and land regulations.  
    • Physical inspections – This assesses the condition of the property, its boundaries, and any existing structures. 
    • Company search (if applicable) – This verifies the legitimacy of a company and its capacity to buy or sell property. 
  • Pre-Contractual Negotiations: The Vendor and the Purchaser must agree on specific terms before proceeding with the transaction, such as the deposit and purchase price, the payment terms, he completion timeline, and special conditions (if any). 
  1. Contract Stage

This is where the Vendor and the Purchaser formalize their agreement into a formal commitment through signing a legally binding sale agreement. It involves the following key activities: 

  • Preparation and Review of the Sale Agreement: The Vendor’s Advocate prepares a draft sale agreement that sets out the agreed terms. This document is shared with the Purchaser’s Advocate for review and negotiation. 
  • Execution of the Sale Agreement: Upon mutual agreement of the terms and conditions, the Vendor and the Purchaser are required to sign the sale agreement to signify their consent to be legally bound. 
  • Payment of Deposit: After execution of the sale agreement, the purchaser is required to pay a deposit, which is often 10% of the purchase price. The Vendor’s Advocate holds the deposit in escrow until completion or default. 
  • Preparation of the Transfer Instrument: Once the contract terms have been agreed, the next step is to prepare the transfer instrument, which formally transfers ownership from the Vendor to the Purchaser. Both parties must execute the transfer instrument. 
  • Obtainment of Consents and Clearances: Depending on the nature of the transaction, the following consents and clearance certificates may be required for compliance purposes:
    • Land rates and rent clearance certificates 
    • Spousal consent (for matrimonial property)
    • Consent from landlord and head lessors (for subletting property)
    • Consent from chargees (for charged property)
    • Consent from the Land Control Board (for agricultural land)
    • Consent from the Kenya Airports Authority (for land adjacent to airports) 
    • Consent from the Kenya Railways Corporation (for land adjacent to railway lines)
    • Consent from Kenya Ports Authority (for land adjacent to Kenyan ports and harbours)
    • Consent from the National Land Commission (for leases granted by the government)
  1. Completion 

This is the final phase of the transaction where ownership is transferred and possession of the property is handed over to the Purchaser. Key components include: 

  • Release of Completion Documents: Completion documents are the documents given to the Purchaser’s Advocates to legally effect the transfer of ownership (e.g. the original title deed, the duly executed transfer form, the consents and clearances, and identification documents of both parties). 
  • Payment of the Balance of the Purchase Price: The Purchaser must pay the remaining purchase price after receiving the completion documents. 
  • Payment of Stamp Duty: Stamp duty is the tax paid on property transfers. It is typically 4% for properties in urban areas and 2% for properties outside urban areas. 
  • Booking and Registration: The Purchaser’s advocate books the transfer at the land registry, pays a booking fee, and submits all the transfer documents for registration.  

How Kioi & Co. Advocates Can Assist: Here at Kioi & Co. Advocates, our competent Real estate & Conveyancing lawyers are ready to handle every stage of the Conveyancing cycle for you so that you can focus on what matters most. Please feel free to contact us at info@kioi.co.ke or book a consultation with any of our Associates for this or any other related legal matters.