Extension of Leasehold titles under Kenyan Law

In Kenya, land/immovable property can be registered under three registration regimes viz:-
(a) The Government Lands Act, Chapter 280 of the Laws of Kenya;
(b) The Registration of Titles Act, Chapter 281 of the Laws of Kenya; and
(c) The Registered Lands Act, Chapter 300 of the Laws of Kenya.
Unlike freehold titles, leaseholds titles are issued or granted a limited period of time, usually referred to a the term and this may be 33 years, 50 years or 99 years. When the term for which a leasehold title is issued expires, the land therein comprised in supposed to revert to the state/Government of Kenya or the relevant local authority, after which is available for appropriation to another use or person.
It is usually the case that when one has be granted a leasehold interest; he or she would want to renew the leasehold title after expiry of the initial term, and especially when he/she has developed the land, so that he can recoup his/her investment. To avoid one being caught unaware, the registered proprietor of land or his agent should acquaint himself of the terms and conditions under which the land is held and should keep a record of the expected expiry date of his leasehold interest. Where one intends to renew his leasehold title, he should commence the renewal process interest at least 3-5 years before expiry of the initial term.
Below in the Process of for the renewal of a Leasehold Interest Granted by the Government of Kenya
1. Application to Commissioner of Lands
To initiate the process, the client should engage a qualified advocate or land consultant to assist him in the process. The latter should begin the process by making a formal application to the Commissioner of Lands on behalf the client in which he should request for an extension of the leasehold tile for a further term. Generally, the client will be required to have complied with the terms and conditions of his leasehold title to qualify for an extension of his leasehold title.
Once the Commissioner of Lands has received the application letter, the same is assigned to a specific land officer at the Lands Office, who is supposed to deal with the application.
2. Approval from the relevant Government Departments
The attending land officer attend to the application by first circulate the application to various Government Departments to notify them of the same and to seek their views on the same.
These departments includes:-
(a) relevant local authority;
(b) Director of City Planning; and
(c) Director of Surveys.
Once the requisite approvals have been granted by the above mentioned Departments to the Lands Office, the Commissioner of Lands through the relevant land officer will then issue the applicant with formal letter of acceptance of the renewal application, and his is usually subject to the following conditions being fulfilled:-
(i) Submission of a new Deed Plan of the Property;
(ii) Payment of approval and conveyance fees;
(iii) Surrender of the existing title in exchange of a new grant/title with the extended term;
(iv) Submission of copies of the approved development plans in respect of the existing buildings on the Property; and
(v) New revised land rent and rates etc.
The new Deed Plan for the Property must be prepared by a duly licensed survey and thereafter approved by the Director of Survey, who is based at Survey Department, at Ruaraka. We normally arrange and facilitate this process on behalf of our clients.

3. Issue of new Grant
Upon receipt of the new deed plan of the Property, the following documents are supposed to forwarded to the Commissioner of Lands to enable the issuance of the new Grant/title:-
(a) A duly executed surrender of the original title to the Government;
(b) The original title for the leasehold title;
(c) A banker's cheque for the necessary payments stated in number 2 above;
(d) The new approved Deed Plan for the Property.
The Commissioner of Lands will then cause the Grant to be prepared and this together with the new deed plan for the property (usually annexed thereto) are forwarded to the Director of Surveys for verification and recording. After this process, these documents are returned to the Lands office for registration and thereafter collection by the applicant.
4. Registration of the Replacement Charge
If the property is mortgaged or charged to a financier institution ton secure some banking facilities, the property should be discharge before it is surrender to the Government in substitution of a new grant/title. Most banks will be agreeable to such discharges and renewal provided that the registered owner of the property agrees to creation and registration a replacement mortgage or charge in their favour upon the issuance of a new grant/title.
5. Time Frame
In my experience, the process for an extension of leasehold titles takes about 3-7 months.
Kindly do not hesitate to contact me via mainacy@gmail.com in the event that you require further information or clarification.

Sale of Land in Kenya )- Checklist

Sale of Land

Checklist

1. Check if title RLA/RTA/GLA; (Registered Land Act, Registration of Titles Act or Government Lands Act, Chapters 300, 281 and 280 of the Laws of Kenya, respectively. These statutes have now been repealed and replaced by the Land Act, 2012 and the Land Registration Act, 2012, although the titles and registry under the former laws are still in place.  
2. Conduct search at lands office (for all transactions) and company registry (if necessary);
3. Check user of the property – if user agricultural ( as freehold titles tend to be) land board control consent will be required. The sale transaction will be void is the land board control consent is obtained at all or within the requisite time frame.  After the sale has been concluded, the change of user should be applied for and obtained if the property if intended to be used for another user other than that stated in the title document; 
4. If property is a leasehold, check the conditions endorsed on the original title or lease especially if there are development conditions. It is also important to check the terms of the leasehold title. If only a few years are remaining for the leasehold title to expire, the vendor may be required to apply and obtain an extension of lease.
5. It is common to check if the property is listed in the Ndung’u Lands Report on Illegal and Irregular Land Allocation report but currently the status/effect of that report is unclear;
6. If property is being transferred by administrators of estates of deceased ensure that the requisite procedure are adhered to.  For instance, under RLA, the property has to be transferred to administrator  using Form RL 7 who will then transfer it to the persons entitled under the will (RL 19) who will  then transfer the property to the purchaser.
For RTA titles, the death certificicate and the confirmaton of grant of administration will be endorsed on the title and the administrator will be able to sell the property.
7. When preparing the sale agreement, check if the purchaser is getting a charge over the property in which case the entire amount/balance of purchase price will be secured by an undertaking from the bank or its advocates.  Please also note that escrow agent or account  as well as bank guarantees are becoming common methods of payment of balance of the purchase price and/or deposit, especially where the vendor's lawyer reputation is in doubt or uncertain;
9. If there is an introducing agent’s fee to be paid who will pay and at what stage?  Usually this is paid at the end of the transaction.

Completion Documents

1. Original title to property – in case of change of user new grant issued (RLA/RTA Freehold to leasehold) and original grant surrendered- check that this has been done or that the change of user has been endorsed on the original title or grant – RTA uncommon;
2. the Land Rent Clearance and Rates Clearance Certificate, if applicable;
3. consent to transfer the property from the Commissioner of lands, if applicable;
4. Consent to transfer the property from the relevant land control board, if applicable;
5. Cheque for stamp duty in the name of the commissioner of domestic taxes (a/c of purchaser);
6. stamp duty valuation form duly completed by vendor or his advocate;
7. if change of user obtained PP2 (permission from city council);
8. 3 coloured passport sized photographs/copy of PIN Certificate & ID/Passport Number of transferor and transferee (director and director/secretary in case of company)

It is important for one to use a reputable lawyer or firm of advocates to act for him/her in the sale transaction. Such lawyer will also assist in obtaining the requisite completion documents.

For more information, please do not hesitate to contact me via mainacy@gmail.com

 
 

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