RealEstateGuru254

We recently hosted Mr George M Okari to speak on the subject of an upcoming event titled the Build B4 Build Symposium, scheduled to take place on Saturday, April 15' 2023 at the Wangari Maathai Hall, August 7th Memorial Grounds, Nairobi CBD. The event seeks to equip prospective home builders with the information to plug their knowledge gap in understanding the home construction process from inception to occupancy, providing attendees with the opportunity to learn how, when or where to start engaging in the home construction process.

The theme of the symposium will be “Understanding Healthy Habitable Housing”

For this feature, George helps us to understand some of the nuances around home construction and why it is critical to engage with professionals in executing home construction projects. Build B4 Build also seeks to bridge stakeholder engagement and interactive understanding of the available alternative building technologies and the home construction process from pre-construction formalities to design, cost and project implementation while improving outcomes within the built environment in Kenya.

Listen in on our conversation. Even better, attend the event!

So, sometime in January 2019, I got a random call from a lady called Esther which went a little like this:

Hi, my name is Esther. I am looking to purchase land for agricultural purposes and ideally, I am looking for ….. (insert description here). She wanted a property in the range of 20 acres if I recall well, preferably within what is technically called a high-potential or medium-potential agroecological zone and within a very specific radius of the city (Nairobi). In addition, she also required the property to be within proximity to a natural water source, preferably with red soil.

I took on the challenge of finding the property, initially placing some calls to a couple of property agent friends of mine. I was initially very tentative about seeking out a property for this client for a couple of reasons – one being that we had made initial contact via email and when she first contacted me, the tone of her message was initially very friendly (as you would expect of anyone making a request), but, subsequently, after I responded, it was demanding – almost as if I owed her feedback. At this juncture in the process of agency, all she is/ was was a prospect. And, in addition, she had not commissioned a search. She had requested one – but she hadn’t commissioned one – and as a prospect, I had no obligation towards her.

Sectional Properties Act, 2020 is the law that was enacted for the administration of sectional properties in Kenya. If you intend to buy or own sectional property in Kenya such as an apartment, flat, maisonette or townhouse in a gated development, commercial office or any other property that subsists as a unit within another building or that represents a share or section of a larger property, then it would be ideal to have some basic knowledge before making the purchase.

In December 2020, the current law passed replacing the Sectional Properties Act 1987. The law was enacted in principle to align the legal administration of sectional properties with the Land Act and Land Registration Act, 2012 and with the Constitution of Kenya, 2010 following the repeal of several land administration laws.

For instance, following the process of devolution, the approvals for sectional properties fell under the purview of the municipalities and local authorities, whereas today, that mandate falls to the country governments. Their registration previously fell under the Registered Land Act which was repealed and replaced by the Land Registration Act of 2012

The Act applies to leasehold properties with unexpired residue terms of not less than 21 years and requires conversion of all long-term sub-leases intended to confer ownership of apartments, flats, maisonettes, townhouses, villas, go-downs or offices to conform to the Sectional Properties Act, 2020 and the Land Registration Act, 2012.

In this episode, Monica Mwangi, an advocate of the High Court of Kenya, and I begin by discussing what sectional properties are, and thereafter understanding the fundamental differences between the two laws (Sectional Properties Act (No. 21 of 2020) and Sectional Properties Act 1987).

We also discuss the changes that the new regime of law makes to the administration of sectional properties and how that affects property investors. One of those changes is that unlike in the past when long-term leases were issued, now, a certificate of title (if the property is freehold) or a certificate of lease (if the property is leasehold) is issued.

We also delve into the motivations behind enacting the new law, underscoring the major changes it makes to address the glaring gaps that were not addressed under the Sectional Properties Act 1987.

It is well worth noting that at the time of its enactment, the Act was widely embraced as a welcome change to the administration of sectional properties because of the protections it offered property investors with units in such buildings.

We’d love to receive your feedback.

Music: Springtime In The Tropics # 51138859713

Off-plan home purchasing schemes are often the subject of mixed sentiment in the property market in Kenya.

On the one hand, off-plan home purchasing schemes are considered an ideal pathway for home buyers to secure homeownership due to the perceived property discounts, flexible payment plans and other benefits often attached to these schemes. I say “perceived” because that’s the impression that is created. Is this the reality though, or is this just the marketer’s spin?

On the other hand, given the number of these off-plan home purchasing schemes that have failed to deliver on homebuyers’ expectations, those that were ostensibly set up to take advantage of unsuspecting homebuyers and those that may have collapsed without actually delivering homes to investors, it is easy to see that they carry an inordinately high level of risk which one must consider carefully before engaging with the property developers pushing them in the market.

In his book, Don’t Buy That House, Nashon Okowa makes a case for investors to exercise prudence, caution and tenacity in arriving at the decision to purchase property in off-plan home purchasing schemes. He elaborates in great detail on a methodology that home buyers can use to make a clear-headed, rational assessment of their decision. In this episode, I provide a review of this book, including some of my personal sentiments on the subject of investing in property in off-plan home purchasing schemes with a view to helping investors understand some of the pertinent questions they ought to pose whenever they are considering the decision. Don't Buy That House. 

At least not until you have read this book.

We’d love to receive your feedback.

Music: Springtime In The Tropics # 51138859713

At what point do we willingly define the madness of real estate firms going under with investor billions as a multi-dimensional problem that needs to be debated outside the myopic lens of greedy, unscrupulous property sellers and developers? For whom is it convenient that this one-sided narrative is told repeatedly? Certainly not the investors losing their money. And somebody needs to boldly let them know that they are culpable in their own fate!

On every occasion, the attendant slew of bad press only serves to erode the credibility of genuine operators in the real estate industry, casting aspersions on the nature of the industry as inherently corrupt. And while this may be true, nobody is willing to address the problem with broader strokes - and that is that this endemic problem also requires a fiscally inept "investor in the mix. We can ask for intervention from the government, but will this be enough to address the issue? Not even likely!

Off the bat, today’s episode is a deep castigation of anyone who is Still Being Scammed Through Property Scams in Kenya in 2023.

They are out here telling the world how developer X or land-selling entity Y didn’t keep their promises to “investors”. And, they want you to believe them.

In 2023?

If that’s you, tell it to the birds. I don’t wish to hear any of it. It’s your fault.

Yes, sorry for the pain you’re experiencing. I refuse to hold your hand and cry with you. You are to blame. You went to do something you had no idea how to do and then somehow, the rest of us are supposed to mourn with you?

No. Don’t call us for that pity party. Cry in your corner because you have refused to learn how to wade through the murk of the Kenyan property market. It’s OK, hold it against me for telling you the truth. In any case, now that you have gone through the loss, I am clearly not your enemy. Unsympathetic, yes. But I don’t know who would be because if it has happened and you did nothing except cry foul, knowing full well that it has happened many times in the past, then all I can say is that you courted that disaster. Now that it has been visited upon you, stop your complaints. You made that bed. Now lie in it!

In this episode, we continue the conversation around selling property in a depressed market by offering advice to a client who presented her specific scenario of the challenges she was facing attempting to dispose of her property.

We further demystify the misconception that selling property in a depressed market is solely about price by considering several scenarios to demonstrate the need for sellers to become acutely aware of the market.

Selling a property in a depressed market requires a robust and dynamic approach to positioning property offers as well as understanding the market sufficiently in order to change tack or strategy as the need arises.

Depressed markets require a keener understanding of the market. We take a close look at a scenario that challenged a client who had been attempting to sell her property for more than two years in a depressed market.

Here are some basic issues that require a deeper understanding when attempting to sell property in a depressed market:

Building clear narratives of the market, understanding the USPs of your property and ensuring you have an adaptable strategy to selling not may help unlock your selling goals faster.

It's a lot harder to make a sale when supply dramatically outstrips demand. However, it is possible if you are willing to put some "elbow grease" into the endeavour.

We’d love to receive your feedback.

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Selling property in a depressed market is fraught with more challenges than one ordinarily encounters when market conditions are favourable.

One of the most commonly held misconceptions about selling property in a depressed market is that price is the sole determinant of how successful you will be in actually disposing of your property. But there is so much more. Price definitely is a factor, but not the only one. And sometimes not even the most important one. This isn’t just true in a depressed market.

In a depressed market, a keener understanding of the market is essential in helping you sell faster.

In today’s episode, we take a close look at a scenario that challenged a client who had been attempting to sell her property for more than two years in a depressed market. Here are some basic issues that require a deeper understanding when attempting to sell property in a depressed market:

Building clear narratives of the market, understanding the USPs of your property and ensuring you have an adaptable strategy to selling not may help unlock your selling goals faster.

It’s a lot harder to make a sale when supply greatly outstrips demand. However, it is possible if you are willing to put some “elbow grease” into the endeavour.

We’d love to receive your feedback.

The Transfer of Property Under Succession is a subject of wide interest in Kenya. In many of our communities, when the breadwinners in families pass away, there is usually quite a bit of contention over a deceased person's property. Especially when that deceased person’s intentions were unknown. Even worse, in instances where the deceased had more than one family, the contention can be extreme.

In today’s episode of the podcast, we delve into the transfer of property that is the subject of the process of succession (the property of a deceased person), and how these processes interact with the transfer and registration of ownership.

This episode seeks to demystify the processes by which The Transfer of Property Under Succession is undertaken. These processes invariably take lengthy periods of time because of the legal thresholds established in the law that governs succession.

It is imperative for investors to understand some of the precepts in this podcast and how those play into the due diligence processes they undertake before they attempt to acquire the property of a person who is deceased.

Legally, there are no restrictions that stop The Transfer of Property Under Succession. However, it is imperative to understand who has the legal right to do so, so that you can protect your interests. It is also important to note that by interfering with the property of a deceased person before his or her beneficiaries have been legally settled, you may also open yourself up to legal jeopardy of a criminal nature.

This podcast episode is not a substitute for legal advice. We strongly recommend that anyone seeking the Transfer of Property Under Succession contract a legal practitioner to assist them with undertaking due diligence, and ensure that they have complied with the law!

We’d love to receive your feedback.

Welcome to today’s episode of the RealEstateGuru254 Podcast, where we demystify the world of real estate in Kenya. In today's episode, we'll be discussing property encumbrances and how they can affect the transfer of ownership.

And, what needs to happen before the ownership of property that has been placed under an encumbrance can be transferred?

So, what exactly is a property encumbrance? Why is it critical that any property investor make it a priority in Understanding Property Encumbrances and how they affect the property transfers and registration?

Simply put, an encumbrance is a claim or a burden on a piece of real estate that affects the owner's ability to use or sell the property. There are many different types of encumbrances, including cautions, caveats, charges, liens, easements and more.

Did you know that a registered lease whose term is unexpired serves the same purpose as any other type of encumbrance? Well, neither did we!

Did you know that the Government can place a restriction on a property that may be the subject of disputed ownership, property that may be the subject of compulsory acquisition, or that may be the subject of fraud or that may have been acquired using illegal proceeds?

Go figure!

So, what does all of this mean for someone who is looking to transfer ownership of a property, for example, you who may be looking to purchase a property that is under an encumbrance?

Understanding Property Encumbrances and how they affect the property transfers and registration is a key to the due diligence process. Thoroughly check for any encumbrances before attempting to transact on any property.

If you're buying a property with a registered charge on it, for example, you'll want to make sure that the charge has been discharged before you make any payments because the transfer cannot happen before the charge has been discharged.

And if you're selling a property, it's important to make sure that any easements or other encumbrances are disclosed to the buyer so that there are no surprises down the line. What surprises may occur down the line you ask? Well, I have seen a seller attempt to sell a vacant plot that was adjacent to a power line which would have rendered nearly 40% of the property unusable for any permanent structures. To an unsuspecting buyer, this would have been a “deal-breaker” say if they intended to use the land for home construction or development of a commercial property.

In conclusion, property encumbrances can have a significant impact on the transfer of ownership. It's crucial to be aware of any encumbrances that may be affecting a property and to handle them properly before completing a transfer. Thanks for tuning in to the "Real Estate 101" podcast. Join us for our next episode, where we'll be discussing the different types of property ownership and how to choose the right one for you.

We’d love to receive your feedback.

This episode is a follow-up to last week’s episode where we sought to understand the preliminary measures one takes before purchasing property in Kenya. In today’s episode, we want to understand, in broad strokes, how the transfer and registration process works.

Today, Monica Mwangi and I look more in-depth at the actual transfer and registration of property in Kenya.

Specifically, we attempt to address these questions:

Having a basic understanding of the registration of transfers of property is essential to any property investor. Hopefully, this information will help you to proactively engage with the process whenever you are in the market.

We’d love to receive your feedback.

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