Looking to buy and own an apartment in Kenya? Then this article is meant for you to catch up with the latest changes effective upon the regulations of sectional property ownership.

The new Sectional Properties Act, 2020 laws of Kenya came effectively to repeal the Sectional Properties Act of 1987, laws of Kenya (the "repealed law") that was used before in matters to sectional property guidance.

The sectional properties law still aims to permit the sub-dividing buildings into successive units to be owned by individual proprietors and common property to be owned jointly by the proprietors as tenants in common.

The new law efficiently simplifies the process of registration of sectional properties and create an enabling environment for investors and property owners. Reversionary interests and absolute individual rights on property to proprietor’s and owners are guaranteed through the act. This come with in depth liberty and powers scope on dealing with individual units as now owners can easily enjoy, dispose or transfer units with easy. It has also created a seamless avenue for access to financing through credit facilities to the respective owners by financial institutions with the units serving as collaterals. The initial powers of the developer and or the manager has been capped as a consent from it as an entity is no longer a requirement.

Below are the salient features of the Sectional Properties Act, 2020:

1. Registration Of Corporation

The individual owners are constituted in a Corporation upon registration, the corporation is responsible for management of the common property. Subsequently a Certificate of Registration in respect of the Corporation is issued by the registrar.

The Corporation is mandated ensure the care and diligent utilization of common property. It provides for the Corporation to establish an internal dispute resolution mechanism through the Committee established under the Act to hear and determine any disputes. It also empowers the Corporation to execute any of its duties by the use of technology.

The new law has repealed section 29 of the old law which provided for the compulsory appointment of an institutional manager and extensively set out the qualifications and duties of the said institutional manager who would be responsible for management of the units, any property of the Corporation as well as the common property. Section 20(1) of the new law provides that the Corporation may, if it deems it necessary appoint a property manager to manage the common property.

2. Renting of Residential Units

Creates a wide leeway of the unit owner with relation to how he or she rents out his or her unit without the necessary intervention of the corporation as it was before by obligating disclosure and requirement of payment of certain additional amount as a result of renting.

3. Titles conversion

It stipulates that all long-term sub-leases intended to confer ownership on a mansionette, apartment, flat, town house or office that were registered before the new law shall be reviewed to conform with section 54(5) of the LRA and the proprietors thereto shall be issued with certificates of lease.

This said review and transition of sub-leases shall be done within a period of two years from the date of commencement of the new law. This will not entail a transaction from scratch and an owner who has already paid stamp duty in respect of the said sub-leases shall not be required to pay stamp duty during the revision. The process of conversion may be commenced by the developers, the management company or the individual unit owner. If the developer is unwilling to surrender the mother title for purposes of the conversion, the registrar may register a restriction against the title to prevent any further dealings.

The surrendered sub-leases would be subject to the new land registration units established under Gazette Notice 11348 of 31st December 2020 depending on where the property is situated. Noting the timelines set out for conversion of the land titles commencing from the month of April, 2021.

4. Caution placement and removal for Due Amounts

Its within its purview for a Corporation to register a caution against the title to an owner’s unit for due monetary obligations not paid by the owner, the Corporation is obligated within thirty days withdraw the caution in the event of payment.

5. Dispute Resolution mechanism

Under the repealed law, any disputes relating to the contravention of the by-laws of the Corporation were referred to a tribunal established under the Landlords and Tenants Act which was mandated to recover from an errant owner or tenant a penalty not exceeding Kenya shillings twenty-five thousand. The new act provides disputes to be referred to the Committee which as an internal dispute resolution mechanism and not a tribunal under the landlords and tenants act like before. The levies imposed on errant tenants is unlimited against the prior limit cap of KSH 25,000/-

Under the new law, in the event of non-compliance with an order of the Committee or if a party is disgruntled with the decision of the Committee, both may apply to the Environment and Land Court for enforcement of the order or in the case of an appeal from the decision of the Committee as the case may be.

6. Sectional Property Co-Relation With The Land Registration Act 2012

In the effort and spirit of harmonizing all land regimes under the Land Registration Act, 2012. The new law pronounces its operation that the title to a sectional property shall be deemed to be issued under the LRA and all dealings and dispositions regarding the sectional property shall be in accordance with the LRA.

7. Leasehold Tenure

The sectional properties law applies to land held on both a freehold tenure and lease hold tenure system. The new law has reduced the leasehold period to twenty-one years from the forty-five years initially stipulated.

8. Termination of The Sectional Status of a Building

Its stipulated that, the sectional status of a building may be terminated by, the substantial all total destruction of the building, unanimous resolution by unit owners’ compulsory acquisition and the Corporation shall stand dissolved upon the termination of the said sectional property status. The Corporation was also required to apply to court for an order winding up the affairs of the Corporation.

Kindly Note: The content of this blog post is intended to be of general use only and should not be relied upon without seeking specific legal advice on any matter.