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Sectional Properties Law will Escalate Real Estate Ownership

The Sectional Properties Act

The Sectional Properties Act was signed by the president of the Republic of Kenya, Hon. Uhuru Muigai Kenyatta on Friday 11th 2020. This law repeals the Sectional Properties Act of 1987, and has some few changes made to it. Its main objective is to provide for the division of buildings into units to be owned by individual proprietors and common property to be owned by proprietors of the units as tenants. The independent and complete ownership shall give the banks a greater incentive to lend to apartment owners because charges can be placed on individual titles directly.

The Sectional Properties Act

Though the laws may be similar, the 2020 law amends 21 statutes which include: Penal Code, Public Holidays, Firearms Act, Records Disposal Act, and General Provisions Act. References to local authorities as approving entities and the repealed Registered Land Act pegged registration have changed. The approvals are to be done by county governments, while the registration will be effected under the Land Registration Act, 2012.

This bill was presented to the president for signing by Solicitor General Ken Ogeto in the presence of the Speaker of the National Assembly Justin Muturi and State House Deputy Chief of Staff, Njee Muturi.

Other Laws Amended

Other laws amended by the new law are Judicial Service Act, National Police Service Act, Witness Protection Act, Kenya Coast Guard Act, Employment Act, Records Disposal Act, Ethics and Anti-Corruption Commission Act, and the Investment and Financial Analysts Act.

The strata titles, which are the sectional titles, help nations to confer the distinct rights to owners of units, or flats in multi-level developments. These developments facilitate real estate ownership by more people and optimize on available land. This supports affordable housing schemes, which in return lead to a high population density and the value of land goes high. The owner of a unit shall not sell it until he/she has given a written notice to a Corporation on their intention to rent the unit, giving out an address where the Corporation can also issue a notice. The owner shall give an undertaking to the corporation to be liable for any damages caused by the tenant. He/she shall also issue the Corporation with a written notice of the name of the tenant residing in the unit within twenty one days of commencement of tenancy.

The old law stated that the unexpired leasehold term of the title to be forty five years, or more for sectional plans to be registrable, but the new law changes the years to twenty one years, opening more room for many more parcels to qualify under this concept, and more people get to enjoy its benefits. Previously, we had numerous registration laws, where titles had to be converted to the Registered Land Act for a property to relish the benefits of sectional titles. Registration of all titles is now done under the Land Registration Act. This has reduced the transaction time and the costs incurred when converting the titles.

The Sectional Properties Act 2020 also requires that all sectional plans submitted for registration by the Land Registrar to be geo-referenced, and signed by the responsible authority, the Director of Survey, for the survey.

The implementation process shall require approval of building plans by the County Governments, sectional plans by survey of Kenya, and registration of titles in land registries.

Undermining of the 1987 law was done through inadequate technical capacity to expedite submissions and ensure quality in these institutions. Some long-term leases, which were registered for purposes of consulting ownership to the apartments, mansions, offices, flats, or townhouses before the initiation of the act. The new law states that these will be reviewed within two years from its initiation to conform to the geo-referenced provisions of the Land Registration Act. After two years the registrar slaps restrictions to prevent further dealings on non-complaint parcels.

When the sectional status of a building is being terminated, the Corporation may by a unanimous resolution be directed to transfer the parcel or a part of it and when the board gets satisfied that the unanimous resolution was properly passed, the transfer is executed according to the Land Registration Act. Some factors may make a registrar not to register the transfer, and they include: when an amended cadastral map and plan of the parcel is not submitted, when the transfer is not accompanied by a certificate under the seal of the Corporation that the unanimous resolution was properly passed and that all the necessary consents were given, or until a notification required by section forty eight has been made on the Sectional Plan.

Anyone who fails to comply with the provision of conversion is guilty of committing an offence and shall be liable on conviction to a fine not exceeding two hundred and fifty thousand Kenya Shillings.

We should therefore learn some lessons from this new Act and be able to engage in it as it also provides opportunities for property owners to give more value to the lessees.

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