ROLE OF ADVOCATES IN HOME OWNERSHIP IN KENYA
Ones you have made up your mind to own a home, your Advocate will conduct due diligence and get all the information relating to the property you are buying. The advocate will help you get a copy of the title and Identity Card of the seller. He should then conduct the requisite searches both for the property and of the person named in the title as the registered owner of the property. A search at the company registry will be undertaken if the person selling the property, is a company. Additionally, where the seller is a member of a corporation established under the sectional property act 2020, a search will be conducted in accordance with the sectional property act to establish whether the person is truly registered as a member of the corporation and whether the corporation is fully registered.
A. DUE DILIGENCE
This due diligence process is very important as it will confirm whether the purported seller of the property is either the real owner or an impostor and whether there are any encumbrances, restrictions or prohibitions on the property.
In addition to the above role, the advocate will also perform the following duties in order to help you complete the entire process of buying the property.
i. Confirming the proposed use of the property/apartment (relevant to planning, zoning, survey, valuation and development, policy legislation and any restrictions that may affect the proposed user);
ii. Confirming the seller’s documentation in full: addresses, telephone contacts and the advocates representing them.
iii. If there is more than one buyer, he will advise on co-ownership and joint ownership.
iv. Finding out how your purchase will be financed and the likely completion date of the transaction.
v. Confirming the property occupant (relevant third-party rights and vacant possession)
vi. Ensuring all outgoing costs (rates, service charge, rent, electricity and water) owed by the Seller to the relevant authorities are settled.
vii. Making sure there is no conflict of interest in the purchase.
B. MANAGER & NEGOTIATOR
Aa a manager your advocate will do all the directing and management activities that will be involved when buying the property/Home. He will work together with all the people involved like the surveyor, developers, the valuer of the property, property manager, seller’s agent advocate and the physical planner. Your advocate will negotiate on your behalf on the favorable terms of sale with the other stake holders. This will not only smoothen the transaction but also makes this easier where things seem to be a bit difficult. For example, in a situation where your home ownership wish is being financed by a financial institution, your advocate will help you to ease the process by giving an undertaking to the bank and on your behalf that the bank’s money is secured and you will comply in making payment or accepting charge of the property ones the transaction is completed. Though an individual buyer can act in person is it always good to work cautiously to avoid being conned hence the need for an advocate.
Another role that your advocate will play is to advice you. Your advocate is the person who will advise you on due diligence results and the necessary steps to be taken. He should be well informed about the dates of the agreement and also negotiate for additional time if it is impossible to meet the deadline to meet all the essential requirements. In case of issues with the property your advocate will negotiate with the seller and terminate the contract if there will be any need to end it. Where the property needs repair, the advocate will detain the funds, or negotiate for the reduction of the price due to the repairs. He/she should also explain to you how the process of borrowing from the bank work and the requirements thereon.
Your Advocate will advise you on the consequential results of the due diligence and the way forward. He/she must make you aware of the important dates during the course of your agreement. If it is not possible to meet a deadline, he will negotiate for more time so that you can meet any necessary requirements.
If the ownership of a property moves to a company, family trust or a partnership, he should advise on the ownership structure. Sometimes, he will give advice on a couple that wants to own property jointly. Your Advocate should be able to explain to you what you need to do in terms of meeting the bank’s requirements and how the process of lending works.
D. THE CUSTODIAN AND TRANSACTOR
The other role your advocate will play is to act as your transactor. Your advocate will amend, prepare, review, and provide the transfer documents and the agreement for sale. He/she will also oversee execution by both parties. The advocate should supervise the property transfer process to a safe and satisfactory purchase. He should assemble on time the purchase price and all the expenses in the Advocate’s trust account. The Advocate should liaise with your financier and ensure that you meet the necessary requirements needed in case you want a mortgage. He will organize the transfer of ownership details into your names, the deposit of the purchase price, give advice on the stamp duty payable, and any expenses incurred. He should handover the mortgage and an updated copy of the title certificate to you and the financier after transferring to the seller the purchase price balance. Finally, and in cooperation with the seller, he/she should organize for a handover.
Please note that these tips are meant to help you see the importance of getting an advocate to help you in your property transaction. At MMS Advocates LLP, you will find experienced property Advocates who will handle all your property investment concerns. For any inquiry reach us on firstname.lastname@example.org
By Andrew Wanga
With the enactment of The Sectional Properties Act No. 21 of 2020 that was assented to on 11th December 2020 and came into force on 28th December 2020, questions have arisen as to the role of Advocates in home ownership given the new development introduced by this new act. Additionally, the fact that new homes are currently being considered expensive, beyond what a majority of the urban population can afford and rigidity in home financing options; these barriers have immensely acted as a hinderance to home ownership in Kenya. Furthermore, any person who wishes to own a home now would wish to get into a scam free transaction hence the need to involve an advocate.
Reports have shown that home ownership scam have been on the rise with victims being conned either by getting involved in a transition for a property that does not exist due to forged documentations or by getting deceived by fake personnel who pretends to be genuine representatives of reputable real estate companies yet they are not. Just imagine being a victim of a home ownership scam in which you had no personal savings to finance the deal and so you opted to a bank financed home ownership scheme? It is an underlying fact that financed home ownership scheme is not only expensive but also the fact the people are keen to owning their homes over a short period of time and do not want to be tied in long term relationships with financiers.
These facts notwithstanding, many people still see both personal saving and financed home ownership schemes as ways of acquiring property being complicated and that they require a lot of keenness to avoid being con or get involved in a fraudulent transaction. For this reason, individuals then need to understand the basic roles advocates play in the entire process of home ownership whether it’s through own personal saving scheme or bank financed option scheme. To this end, below are some of the role advocates play in an effort to actualize your dream to own a home.