5 Ways to Go About Owning Land in Kenya While Living Abroad
Moving to a foreign country can be an intimidating quest, coupled with anxiety, excitement and uncertainty. For me, taking that leap of faith offered limitless possibilities, eye-opening experiences and multicultural encounters.
Life in the US, most specifically the midwestern state of Minnesota nicknamed ‘The Land of 10,000 Lakes’, was the beginning of an endless journey of not just discovery but self-betterment. You see, while working in the US for five years, my focus was on making enough money to start sending some back home to the folks who had sacrificed for me.
Over time I managed to save some little coins after sorting out my basic essentials. Driven by ambition I started to browse for opportunities back home. I felt a strong urge to have a physical sense of belonging and pride in my home country, Kenya - and investing was a good place to start.
Like a moth to a flame, I was quickly attracted to the idea of buying land propelled by the fact that it never depreciates. Though determined, I had my reservations having heard stories from my pals how some had fallen prey to fake real estate agents and dubious deals. I did my research and embarked on purchasing land in Kenya.
I found out a couple of things that can be helpful if you plan to own land while living in the diaspora.
1) Source for a Trusted Real Estate Agent
Finding a good real estate agent is as easy as doing a little research on the internet. Visit their Facebook pages, look for contacts that you can use to clarify information, websites and most importantly get customer testimonials. Look for referrals from people who have bought land from certain agents to gauge their trustworthiness.
Once identified, a real estate agent will carry out conclusive research on the Kenyan market and get to know what suits you. A real estate agent can be your contact on the ground and will give you real-time information that will guide your decision in purchasing land. 2) Purpose of the land This all depends on what features you would want.
You could be buying land for commercial or residential purposes. Once you define the purpose, you will know the location of the land and what size would be ideal for you. For my case, I wanted to develop some modern rental apartments for the burgeoning middle-class looking to settle in satellite towns around the capital city, Nairobi.
Your intentions could be different, for example, you might be looking to build yourself a retirement home and thus the presence of infrastructure and other social amenities should be on top of your priority list. The information will guide you and the real estate adviser to know which kind of property you can afford.
An appraisal will help you get organized by accessing the amount that you already have and what needs to be saved to match the value of the property.
3) Financing your project
After knowing how much money you will need, you can now set out to find different types of financing for the property you intend to acquire. Upon settling, it’s time to create a budget and a plan to raise the money. Discipline is a problem to many as pending issues make saving a difficult task.
You can send money at intervals to your mother or close relative back home which is relatively safe or alternatively you can open a Goal Account at Kenya Commercial Bank (KCB) that will enable you to set a target for a specific period of time and achieve it - this is what I did.
There are many benefits in opening such an account as you can borrow up to 100 percent of your savings at discounted rates and once the period lapses, no deposit fee is required. As such, you can enjoy Kenya’s highest-earning interest rate. The account is designed in a way that you cannot withdraw until the period set has been accomplished, therefore preventing any disruptions from the set goal.
4) Get a Valuer
It’s good to double-check the pricing of the property. Take a valuer to the area and let him or her confirm the value of the property before purchasing it. In case you are taking a mortgage from the bank, the bank will do the valuation. However, it is good to counter check with your valuer and get a trusted lawyer which brings us to the next point.
5) Get a lawyer Land
buying in Kenya much like any other transaction requires legal standing to be valid. As such you should get a lawyer who will advise you on the property purchase. They will follow up with the legal documents required and ensure everything is up to par and advise you accordingly in the transaction process.
Some of the ways in which a lawyer can be of assistance are;
Land Search: An advocate will help with searching the property at the Ministry of Lands with a copy of the title deed. Afterwards, the advocate will prepare the offer letter. The letter contains details of the buyer and seller, description of the property, the proposed purchase price and modes of payment.
Sale agreement: The vendor’s advocate then drafts a sale agreement that is then submitted to your lawyer for approval. After both parties have executed the sale agreement, the agreed deposit is then paid by the purchaser through their advocate to the seller's representative.
Land Control Board: Book the Land Control Board (LCB) meeting. The LCB is a forum made of the Assistant County Commissioners (Previously called DOs) and the local village elders which meets once a month. They are the ones who give the final consent for the land to be sold. Their role is to protect the seller from self-destruction e.g. where a man is selling land without wife’s knowledge and they don’t have anywhere else to go or the land being sold is clan/community land. These meetings cost Ksh1000 to attend.
However, there is a Special Land Control Board (SLCB), which involves only the Assistant County Commissioner and the two transacting parties instead of waiting for the main LCB that meets once per month. SLCB meetings cost Ksh5,000 and may take two hours depending on the availability of the Assistant County Commissioner.
Payment of rates: The seller should clear any pending rates on the land before selling it as it is a legal obligation.
Transfer of documents: The seller’s advocate then prepares transfer documents that will be executed by both parties after getting consent from the commissioner of lands. Payment of stamp duty: It is the responsibility of every buyer to pay the stamp duty. It is a tax that is levied to all lands. Upon completion of the registration process, legal ownership changes and you are expected to pay the entire balance.
6) Due diligence to Identify con schemes
Over the years, the real estate industry has been filled by con men who are ready to take money from your ignorance by selling ghost properties. Make sure that you do not become a victim of the schemes by doing your due diligence. Ensure that before you purchase any property you have done a search of the land title at the Ministry of lands or have a lawyer do it.
This will help you know who owns the land. If you are in a position to, you can visit the site or have a representative go in your place before you make any payment. You can also engage certified land buying companies and SACCOs to help you get the property.
However, having a lawyer would be the best way to go about the situation. With that, you should make your land buying experience as smooth as possible.
In case you are wondering, I did get my piece of land and already in the process of building the apartments.
Developing the property, though, is a whole different ball game with its own technicalities and bottlenecks to overcome, but that’s a story for another day.