Sectional property in Kenya-What you should know before you buy that apartment
SECTIONAL PROPERTIES IN KENYA-WHAT YOU SHOULD KNOW BEFORE YOU BUY THAT APARTMENT
What is Sectional Property?
Sectional property refers to a type of property ownership where a building or land is divided into multiple units (usually apartments, townhouses, or offices) that are owned individually by different owners. Sectional Property means an individual has ownership of a unit within a development.
The Sectional Property Act 2020 allows for the creation of
Sectional Properties on both freehold and leasehold land and has been crucial
in simplifying the process of registering titles for apartments, townhouses,
office units among others.
The Act provides for the division of buildings into units with separate titles
to be owned by separate persons. This is done by closing the mother title in
order to create new titles for each unit. It also provides for common property
such as water pipes, drainage, electricity, and shared areas such as gyms,
lobbies and playgrounds which are owned by proprietors of the units as tenants
in common.
Each owner holds title to their specific unit while also jointly owning a share of the common areas and facilities within the property, such as hallways, parking lots, elevators, and other shared amenities.
The ownership of each unit is distinct from the ownership of common areas, which are managed collectively by all the property owners.
Legal Framework of Sectional Property in Kenya
The concept of sectional property in Kenya is governed by the Sectional Properties Act, 2020 and the Sectional properties regulations 2021 which came into force to regulate how these types of properties are managed and owned. The Act provides for the creation, registration, management, and transfer of sectional properties in Kenya, aiming to simplify property ownership and resolve some of the complexities associated with joint property ownership.
Under this Act, the following legal provisions apply:
- Individual Ownership of Units: Each unit in a sectional property is owned separately, and the title for each unit is registered in the name of the individual owner. The unit’s title deed can be bought, sold, or transferred like any other property.
- Joint Ownership of Common Areas: Common areas, such as roads, gardens, and amenities (e.g., swimming pools, gyms), are jointly owned by all the unit owners. The ownership share is proportional to the size or value of the units owned.
- Management by a Body Corporate: The property owners form a Body Corporate, which is responsible for the maintenance and management of the common areas. The Body Corporate is typically governed by an elected committee, and its responsibilities include setting up rules, collecting contributions for maintenance, and ensuring the property is properly maintained.
- Sectional Plans: A sectional plan is a legal document that divides a property into distinct sections (units) and common areas. This plan is registered with the land registry and provides the physical boundaries of each unit, as well as the common property.
Benefits of Sectional Property in Kenya
- Affordability and Accessibility: Sectional property allows for more affordable ownership opportunities, especially in urban areas where land is scarce and expensive. By sharing ownership of common areas and facilities, individual owners can invest in a property that would otherwise be too costly to own outright.
- Secure Ownership Structure: Since each unit is registered individually, owners enjoy the security of title and clear ownership rights. This structure reduces conflicts regarding ownership, and owners can buy, sell, or lease their individual units with ease.
- Efficient Use of Space: Sectional properties allow developers to maximize the use of limited land, especially in densely populated urban areas like Nairobi, Mombasa, and Kisumu. High-rise apartment complexes and gated communities benefit from this efficient land use.
- Shared Costs: Maintenance of common areas and facilities is shared among the property owners, which reduces the financial burden on individual owners. Contributions to the maintenance fund are typically proportionate to the size or value of each unit, ensuring fairness.
- Potential for Investment: Sectional properties can offer a good return on investment, particularly in areas where demand for housing is high. Investors can buy units for rental purposes, benefiting from regular rental income while also holding a stake in the property’s appreciation.
How to Buy a Sectional Property in Kenya
Purchasing a sectional property in Kenya follows a similar process to buying any other property, but with some additional considerations:
- Conduct Due Diligence: As with any real estate purchase, it’s crucial to carry out due diligence before buying a sectional property. This includes confirming the legitimacy of the title deed, checking that the property is registered under the Sectional Properties Act, and verifying that there are no outstanding legal issues or disputes.
- Consult a Lawyer: It is advisable to work with a lawyer who understands the complexities of sectional property ownership to ensure that all legal requirements are met, especially when it comes to drafting sale agreements and understanding the rights and obligations of ownership.
- Understand the Body Corporate Rules: Before purchasing a unit, make sure you understand the rules and regulations set by the Body Corporate. This will ensure that you are comfortable with the management structure, maintenance fees, and other shared responsibilities.
- Financing: Investigate the financing options available, such as bank loans or mortgage products, to ensure you can afford the property. Some banks may require a higher deposit for sectional property loans compared to single-unit homes.
Sectional properties are created through the registration of a sectional plan that is prepared by a surveyor, from a building plan that has already been approved by a county government.
On registration of the Sectional plan at the relevant land registry, the owners of the units in the parcel of land must establish a corporation. It is tasked with the management of the entire property by doing things such as maintaining the property in good condition, enforcing the bylaws, paying the premiums for any insurance policies and all other tasks that ensure that the property is properly managed.
Sectional titles on leasehold land
Section 2 of the SPA provides two criteria that must be met when creating sectional properties on leasehold land: that there is not less than 21 years still left on the lease and that there exists an intention to confer ownership to the new title holder.
A holder for every sectional property is now considered an
individual lease holder from the government and will be required to apply for
the renewal individually. The title holder/ lessee has the preemptive right to
apply for extension of that lease.
The law requires that the National Land Commission notifies the lease holder 5
years before the expiry of the leasehold that it is about to expire. It should
also point out the date of expiry and to inform them about their preemptive
right of renewal. If the lessee does not respond to the notice within 1 year,
the NLC shall publish the notice in 2 newspapers of nationwide circulation. If
the lessee still does not apply for renewal, then the consequences include
forfeiture of the preemptive right over the title and the automatic reversion
to the National or County Government as with any other type of lease.
Conclusion
Sectional property is a dynamic and evolving concept in Kenya’s real estate market, providing an attractive solution to the country’s growing demand for housing. With clear ownership rights, shared costs, and efficient land use, it offers both affordable and secure property ownership options for urban dwellers.
However, prospective buyers should take care to understand the legal framework, responsibilities, and challenges associated with sectional properties before making an investment. By doing so, they can enjoy the benefits of this innovative property ownership model while minimizing potential risks.
For more insights pertaining to this matter, you can reach the writer ; purie73@gmail.com. You can also contact us on +254 718 627 917.
