[BUYING AND SELLING REAL ESTATE IN KENYA]
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owner. Upon death of a tenant in common then his/her share shall be transmitted to his/her estate. The same applies to a sole owner of any title, then his/her title would be transmitted to their estate under Section 50 of the Land Act. 8. In the event of bankruptcy, the bankrupts’ trustee shall be registered as the proprietor under Section 52 Land Act. Under Section 53 the title to a liquidated/wound up company is passed on to the liquidator through a transmission 9. Leases: - Part VI recognizes various forms of leases of private land and include periodic leases, short term leases, leases terminating on occurrence of future event, future leases, sub-leases, and other forms. The terms of leases can be statutory under Part VI of the Land Act, express (as drafted by parties) and implied (by conduct). 10. Charges: - Recognized under Part VII of the Land Act. Must be made in prescribed form to charge the interest in the title on payment of existing or contingent debt or the fulfillment of a condition. Charge of matrimonial property cannot be effected unless spousal consent is given. Section 80 charged land operates only as security and does not create any land rights in favor of charge. Charges rank in the order in which they have been registered (Section 81) allowing for the creation of subsequent charges subject to the prior chargees’ consent. Charges can be transferred under Section 86. The charger has a
right to discharge his property under Section 85 once he completes the obligations. Chargee powers remedies and rights are set out under the Land Act.
V. THE “CHECK -THE- BOX” REGULATIONS a) Property transactions are subject to the Land Act, Land Registration Act, Sectional Properties Act, Distress for Rent Act and the Landlord and Tenants (Hotels, Shops and Catering Establishments Act). b) Stamp Duty Act and Finance Act which provide the rate of tax payable in property transactions. The Income Tax Act would apply if an entity were tax exempt. VII. FORM OF DEED A. The Land Registration Act No. 3 of 2012 Subsidiary Legislation contains the form of deed and instruments effecting dispositions in land. The instruments/deeds must be in approved statutory format VIII. CLOSING COSTS/ADJUSTMENTS A. The Vendor pays capital gains tax on net gain at a rate of 15% of the gain B. The purchaser pays stamp duty at a rate of 4% of purchase price in urban areas. In rural areas the percentage is 2% of the purchase price C. Where land is leasehold then consent to transfer/lease/charge is paid at a rate of approximately USD 10 if the land is non- agricultural. If the land is agricultural then land control board consent must be given and costs between USD 60-100 depending on the nature of consent. Special Land Control Board Consent is approximately USD 100.
ILN Real Estate Group – Buying and Selling Real Estate Series
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