Documents Involved in Land Transfer and Their Importance

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Username Investment Ltd. client filling in an acknowlegment letter during a Title Giving Ceremony

It is the desire of every Kenyan to own land or any long-term asset, however, there is always the inner fear of beginning the process. The real estate sector has been characterized by fraudulent sellers who purport to sell land and they never issue title deeds as proof of ownership, worse still they do not present legally binding documents to investors to seal any transaction made. Therefore, when a buyer notices they were conned they have no legal document to claim for damages caused. The buyers to an extent lack information of the legal documents involved in the land transfer and this has caused many investors to suffer loss.

There are various documents involved in land transfer and each has its unique role in the purchase process especially land.

1. Letter of Offer
A letter of offer is a single paged document that expresses intention by the buyer who wants to purchase a property and spells out the binding terms and conditions for both the seller and the buyer.

Details contained include the name of the seller, buyer, lawyer overseeing the transaction, property identification number, the payment terms either cash or installment and a slot to fill in next of kin details. The buyer is required to sign this document in duplicate. One copy is retained by the seller and the other one belongs to the buyer. This is the first document a buyer signs after selecting a plot and paying the booking fee.

Importance: A letter of offer eliminates the possibility of two parties buying the same piece of land.

2. Sale agreement
A sale agreement is a legal contract that obligates a buyer to buy and a seller to sell a product and in this case land.
Contents of a sale agreement

i. Identity of the parties- The name as it appears on the identity card, ID/ Passport number and email address

ii. Identity and description of the property under sale- this includes the legal description of the land, the plot number, physical location and the condition of the property either vacant or occupied

iii. The purchase price of the property and payment of the purchase price

iv. General and special conditions- these are the conditions that surround the property on sale including who is supposed to pay stamp duty, legal fees and the completion period.
Importance of a sale agreement: The sales agreement fully protects the rights and interests of the buyer and the seller because if one party fails to adhere to the contract the other party can take legal action to recover the damages caused. The sales agreement is filled in triplicate one for the vendor, one for the purchaser, one for the lawyer/ legal advisor overseeing the transaction.

3. Title transfer document
This is a document that is involved in transfer of a title deed from the name of the seller to the buyer’s name. This document is filled in when payment of a property is completed. A title transfer is attached with the below details before submission to the Lands Registry for the actual transfer.

i. Approved consent for sale from the Lands Control Board.

ii. Stamp duty slip as a proof of paying government levies.

iii. Copies of ID number of the buyer and of two directors of the investment company

iv. KRA Pin Certificate of the buyer and of the investment company

v. Passport photos of the buyer and of two directors of the investment company

vi. Certificate of Incorporation of the investment company
The title transfer document is filled in 3 copies; one copy is filed at the Land Registry, the second at the investment company and the third belongs to the buyer.

Importance of a title transfer form- this document is the legal proof of transfer of the title and can be used when tracing the history of a property in the Lands Registry.

In conclusion, every investor should have these three documents at the back of their minds to ensure the property they have purchased belongs to them legally. Ensure you request for these documents in your next land purchase, they will be availed to you by a Relationship Manager. If you are in diaspora an offer letter is sent to you via email address while a sales agreement and a title transfer form will be sent to you via your preferred courier service.

Compiled by Reuben Kimani, CEO, Username Investment Limited.