July 11, 2023
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LONG TERM LEASES UNDER THE LAND REGISTRATION ACT (No. 3 of 2012) AND THE SECTIONAL PROPERTY ACT, 2020 LAWS OF KENYA
Kibatia & Company Advocates aims to provide compliance support and legal advice to Clients on an ongoing basis which is direct, practical & innovative.
To this end, we hereby give the legal alert on the following:
LONG TERM LEASES UNDER THE LAND REGISTRATION ACT (No. 3 of 2012) AND THE SECTIONAL PROPERTY ACT, 2020 LAWS OF KENYA
Introduction:
The promulgation of the Constitution of Kenya in 2010 ushered in a new dispensation in terms of land policy in Kenya. In particular, Article 68 of the Constitution provided for the revision, consolidation, and rationalisation of existing land laws through legislation by parliament. The new Sectional Properties Act was therefore enacted according to this constitutional provision.
The Cabinet Secretary for Lands & Physical Planning, issued a Public Notice on Long Term Leases accessible through: https://lands.go.ke/wp-content/uploads/2021/05/Public-Notice-Sectional-Properties-7th-May-2021.pdf that was published in the Dailies on 9th May 2021.
The enactment of the Sectional Properties Act, 2020 has brought about the following new changes:
- Sub-division of buildings into units:
A sectional unit is defined under the Act as a space situated within a building and described by reference to floors, walls and ceilings within buildings. The concept of sectional properties entails a sectional unit together with a distinct share of the common area.
The Act provides that an existing structure may be designated a building containing a unit or part of a unit or divided into two or more units by registering a sectional plan. The sectional plan must be prepared by a surveyor and meet all the requirements; which sectional plan must be registered.
- Certificates of Title/Lease:
Unit owners will now be issued with a certificate of title (freehold property) or certificate of lease (leasehold property), and the title must include the unit’s proportionate share in the common property.
- Long Term Sub-Leases
According to Article 68 of the Constitution, all long-term sub-leases that are intended to confer ownership of an apartment, flat, maisonette, townhouse or office that were registered before the commencement of the Sectional Properties Act shall be reviewed to conform to section 54 (5) of the Land Registration Act, 2012 (No. 3 of 2012) within two years of the commencement of the Act.
The conversion may be initiated by a developer, a management company or an owner and, if not done within the prescribed period, the registrar shall register a restriction against the title of the parcel to prevent any further dealings on it. Owners will not incur additional stamp duty upon conversion if they pay the requisite stamp duty fees when registering long-term leases.
- Residue Term for Application of Leasehold Properties
The New Act now applies to leasehold properties with unexpired residue terms of not less than 21 years which is a departure from the 45 years prescribed under the Repealed Act.
- Management of Sectional Properties by Corporations.
Sectional Properties are to be managed by Corporations registered under the Sectional Properties Act. The Corporation will consist of the owners of units in the parcel to which the sectional plan relates or persons entitled to the parcel when the sectional arrangement is terminated under the Act. Its powers and duties are set out in detail in the Act.
- Dispute resolution mechanism and appeals
The New Act provides for an internal dispute resolution mechanism through a Dispute Resolution Committee to determine disputes relating to the enforcement of by-laws. A party aggrieved by the decision of the Dispute Resolution Committee concerning the enforcement of by-laws can appeal to the Environment and Land Court.
TAKE NOTE: The Ministry shall no longer register long-term leases supported by architectural drawings with effect from 10th May 2021.
We trust that you shall find this information useful and should you require further information or discussion on this matter, kindly get in touch with us at info@kibatiaadvocates.com Please note that this information is for public consumption and not intended to offer professional legal advice.
