Comprehensive Guide to Transfers in Land: Freehold, Leasehold, and Apartment Transfers Explained
A transfer is a legal document that acknowledges the passing of land, lease or charge from one party to another. Transfers are governed under the Land Act, 2012, Land Registration Act, 2012, and Land Registration General Regulations, 2017. A transfer takes effect immediately and is completed by registration of the transferee as the proprietor of the land, or lease. For a transfer to be registered, certain documents must accompany the transfer documents. This article will highlight the requirements/documents required for a valid transfer of freehold land, leasehold land and an apartment.
- REQUIREMENTS FOR TRANSFER OF A FREEHOLD LAND
The Parties transacting to transfer a freehold interest are referred to as the vendor, who is the seller of the freehold and the purchaser, who is the buyer of the freehold. Each party has to present certain documents for the transfer to be registered.
| Documents presented by the Vendor | Documents presented by the purchaser |
| Title Deed to show proof of ownership | Transfer document executed and signed by both parties in triplicate |
| Land rates clearance certificate | Valuation report from a valuer |
| Consents if any are required (includes any consents from statutory bodies or spousal consent). | Receipt showing payment of stamp duty on the valuation price. |
Additionally, each party must provide copies of their National Identity Card, KRA PIN Certificate, coloured passport size photographs, and marriage certificate where applicable.
II. REQUIREMENTS FOR TRANSFER OF A LEASEHOLD LAND
The parties transacting to transfer a leasehold interest are referred to as the lessor, who is the person transferring the lease, and the lessee, who is the person to whom the lease is being transferred.
| Documents presented by the Lessor | Documents presented by the Lessee |
| Lease Certificate to show proof of ownership | Transfer document executed and signed by both parties in triplicate |
| Land rates clearance certificate and land rent clearance certificate | Valuation report from a valuer |
| Consents from commissioner of lands and any other consents that may be necessary such as spousal consent | Receipt showing payment of stamp duty on the valuation price. |
Additionally, each party must provide copies of their National Identity Card, KRA PIN Certificate, coloured passport size photographs, and marriage certificate where applicable.
III. REQUIREMENTS FOR TRANSFER OF AN APARTMENT
Apartments can be held under a long-term lease or as sectional units under the new regime governed by the Sectional Properties Act. The difference between the two is that under a long-term lease, the mother title remains and is encumbered by various sub-leases. However, in the new regime, the mother title is closed and new titles are opened for each apartment or unit.
TRANSFER OF A LONG-TERM LEASE
| Documents presented by the Vendor | Documents presented by the purchaser |
| Original lease and original floor plan | Transfer document executed and signed by both parties in triplicate |
| Land rates and land rent clearance certificates | Valuation report from a valuer |
| Consents if any are required (If it is a leasehold, consent from head lessor and the management company) | Receipt showing payment of stamp duty on the valuation price. |
Additionally, each party must provide copies of their National Identity Card, KRA PIN Certificate, and coloured passport size photographs.
TRANSFER OF A SECTIONAL UNIT
The Sectional Properties Act, 2020, has created a new regime of ownership of apartments. Under this regime, apartments are referred to as units. The Vendor sells the units to various purchasers, the mother title is closed and a title is opened for each unit. The owners of the unit then form a management company, each owner acquiring one share by reason of owning a unit.
| Documents presented by the Vendor | Documents presented by the purchaser |
| Original Title Document | Transfer document executed and signed by both parties in triplicate |
| Land rates clearance certificate and where applicable land rent clearance certificate | Valuation report from a valuer |
| Consents if any are required | Receipt showing payment of stamp duty on the valuation price. |
| Sectional plan | |
| Certificate of surveyor and county government |
Additionally, each party must provide copies of their National Identity Card, KRA PIN Certificate, and coloured passport size photographs.
IV. REGISTRATION
Once all these documents are gathered, an application is made for the registration of a transfer in the prescribed form. The Registrar may ask for any other documents needed to identify the land or the interest in the land. Once the registration fees is paid, the process of registration begins.
V. COSTS INCURRED IN THE TRANSFER OF LAND
- Registration fees- An application for registration of the transfer any any other documents is Ksh. 1500.
- Application for official search- the advocate for the purchaser must do a search to ensure that the vendor is the true owner of the property before beginning the transaction. The fee payable for a search is Ksh. 2,000.
- Costs for consents from statutory bodies – the fees varies from ksh. 1,000 to 20,000 depending on the type of consent required.
- Legal fees- this varies from firm to firm.
- Stamps duty- this is a tax paid by the purchaser on the value of the property ascertained by a valuer. For land that is within a municipality stamp duty Is 4% of the valuation price, and for land that is not within a municipality stamp duty is 2% of the valuation price.
- Capital gains tax- is a tax paid by the vendor upon a transfer. The rate of the tax is 15% of the net gain, which is the proceeds of the sale minus the acquisition and any incidental costs.
- Land rent- land rent is a levy imposed on leasehold parcels. It is a set amount of rent paid to the Ministry of Lands and Physical Planning. The amount of land rent differs for different areas.
- Land rates- land rate is a tax levy that is paid for services such as water, sewage system, streetlights, and improved roadways, received by the county. The rates are paid for the continued maintenance of these services. The rate is not fixed and varies from county to county.