Sectional Properties Act 2020 in Kenya

Understanding the Sectional Properties Act 2020 in Kenya:

A Comprehensive Guide

The real estate landscape in Kenya has seen significant changes with the introduction of the Sectional Properties Act 2020. This new law is a game-changer, especially if you’re looking to own or invest in properties like apartments within Nairobi or in the leafy suburbs.

In this blog post, we’ll dive deep into what the Sectional Properties Act 2020 is all about, guide you step-by-step on how to acquire a sectional property title deed, explore the benefits and limitations of owning such a deed, and see how this Act interacts with other real estate laws in Kenya, such as the Land Act 2012.

What is the Sectional Properties Act 2020?

The Sectional Properties Act 2020 provides a clear legal framework for dividing buildings into individual units that you can own.

This Act replaced the older Sectional Properties Act of 1987, bringing in more modern practices to ensure clarity and ease in property ownership and management.

Unlike before where the mother title deed was owned by the property development company, the Sectional Properties Act 2020 allows individuals to own a title deed to a unit they own.

Consequently, a single plot of land that has been developed to have several units can now have several title deeds corresponding to the number of units within the plot.

Key Features of the Act:

1. Registration of Sectional Units: You can subdivide buildings into individual units, each with its own title.
2. Sectional Plans: Detailed plans are required for the division of buildings.
3. Management Corporation: A management corporation is needed to maintain the common property.
4. Ownership and Title: Clear ownership rights with separate titles for each unit owner.
5. Dispute Resolution: Mechanisms for resolving disputes involving unit owners and management corporations.

Step-by-Step Process to Acquire a Sectional Property Title Deed

Ready to acquire a sectional property title deed? Here’s how you can do it:

1. Preparation of Sectional Plan

First, you’ll need to prepare a sectional plan. This plan will outline the division of the building into units and common areas, detailing boundaries, dimensions, and the spatial relationship between units.

• Hire a Licensed Surveyor: The process begins by hiring a licensed surveyor who understands the specifics of the Sectional Properties Act. The surveyor will conduct a thorough assessment of the property to ensure accurate division.

A licensed surveyor is a crucial person in the process as they are the only individuals who can conduct all the necessary activities in the initial steps of getting the deeds for the specific unit.

• Detailed Plans: The sectional plan must include detailed floor plans for each unit, common areas, and any other shared facilities. This involves precise measurements and a clear definition of boundaries.
• Approval from Residents: If you’re converting an existing building into sectional units, you’ll need approval from the majority of the current residents or owners.

In most cases, it is expected that the property developer takes care of all this. However, in case all the units have been sold and the property developer has not initiated the process, unit owners can initiate the process of acquiring their title deed for the unit.

2. Approval of Sectional Plan

Submit the sectional plan to the Director of Surveys for approval. The Director will ensure that your plan complies with the Act’s requirements.

• Submission Process: Submit the plan along with an application form and any required documents to the Director of Surveys.
• Compliance Check: The Director of Surveys will review the plan to ensure it meets all legal requirements, including proper delineation of units and common areas.
• Corrections and Resubmission: If there are any issues, you’ll need to make the necessary corrections and resubmit the plan for approval.

3. Registration of Sectional Plan

Once approved, the sectional plan must be registered with the Registrar of Titles. This involves paying the necessary fees and presenting the required documents.

• Documentation: Gather all required documentation, including the approved sectional plan, title deed of the property, and any other relevant documents.
• Fees: Pay the required registration fees. These fees can vary depending on the size and value of the property.
• Official Registration: Submit the documents to the Registrar of Titles for official registration. This process ensures that your sectional plan is legally recognized.

4. Application for Sectional Title Deed

Now, you can apply for a sectional title deed. You’ll need to provide the approved sectional plan, the original title deed, and other relevant documents.

• Application Form: Complete the application form for the sectional title deed, ensuring all details are accurate.
• Supporting Documents: Include the approved sectional plan, original property title deed, identification documents, and any other required paperwork.
• Submission: Apply to the Registrar of Titles along with the necessary fees.

5. Issuance of Sectional Title Deed

After verification, the Registrar will issue a sectional title deed to you. This deed includes details of your unit, the common property, and your share of the common property.

• Verification Process: The Registrar will verify all submitted documents to ensure they meet the legal requirements.
• Issuance of Deed: Once verified, you’ll receive your sectional title deed, officially recognizing your ownership of the unit.
• Record Keeping: Keep the sectional title deed in a safe place, as it is an important document proving your ownership.

Key Parties in the Process

As already seen the property developers and licensed surveyors are key in the process, however, there are more departments and individuals involved in the process.

Among them include:

• The Department of Surveys. This is the department that authenticates the sectional plan that the licensed surveyor has prepared.
• County Executive Committee Member that deals with building approvals in the county. This member confirms that the sectional plans prepared and authenticated by the Department of Survey align with the approved building and architectural plans
• Land administration officer. The officer is responsible for confirming that all rents of the land have been apportioned to each unit on the property. This applies to the development property of leased land.
• Advocates (Lawyers). Advocates are the individuals who understand laws around property ownership better than anyone else. For a development company, it is essential to have an advocate who draws by-laws, management, and recreational agreements.
• They are also essential in ensuring that the development company complies with the Act and Regulations.
• Ministry of Lands. This is the department that registers the sectional plans and issues titles to individual owners of the units. The ministry also notes any changes to the register of owners in case the sectional unit changes ownership.

Benefits of the Sectional Property Title Deed

Owning a sectional property title deed comes with several perks:

1. Clear Ownership Rights

You get a clear and distinct title, ensuring the security of your ownership. With a sectional title deed, there is no ambiguity about your ownership rights. You have a legal document that clearly defines your property boundaries and ownership details.

2. Ease of Transfer and Mortgage

It’s easier to sell, transfer, or mortgage your unit with an individual title. When you have a sectional title deed, you can easily transfer ownership to another party or use the property as collateral for a mortgage. This flexibility makes sectional properties attractive to buyers and investors.

3. Participation in Management

You can actively participate in the management corporation, influencing decisions on the maintenance and management of common areas. As a sectional property owner, you become a member of the management corporation, giving you a voice in decisions that affect the property. This can include maintenance, repairs, and improvements to common areas.

4. Increased Property Value

Properties with clear titles usually have higher market value and attract more investors. A sectional title deed enhances the marketability of your property, making it more appealing to potential buyers and investors. Clear ownership rights and well-maintained common areas contribute to higher property values.

5. Collateral for Loans

You can use your sectional property title deed as collateral when applying for loans from financial institutions like banks. This makes it easier to secure financing for various needs, leveraging the value of your property. Having the ability to use your property as collateral can be a significant financial advantage, providing you with access to capital for personal or business use.

Limitations of the Sectional Property Title Deed

However, there are some limitations you should be aware of:

1. Management Fees

You’ll need to pay management fees for the upkeep of common property, which can be an additional financial burden. These fees cover the costs of maintaining shared facilities, landscaping, security, and other common expenses.

This is unlike owning a property that stands on its land without having to share the land with others. With own land, one may decide not to let everything go without having to maintain the property.

This does not diminish the value of the property. With a sectional unit, however, the property has to be maintained considering that most of the property is residential in urban settings or commercial areas that need to maintain its appeal. It’s therefore, important to budget for these fees to avoid financial strain.

2. Dispute Resolution

Disputes may arise regarding the use of common property or management decisions, requiring mediation or arbitration. Living in a sectional property means sharing common spaces with other owners, which can sometimes lead to conflicts. Having mechanisms in place for dispute resolution is crucial for maintaining a harmonious living environment.

3. Compliance with By-laws

You must comply with the by-laws set by the management corporation, which may limit certain activities within your unit. These by-laws are designed to ensure the smooth operation and maintenance of the property. However, they can also restrict certain activities. For instance, there could be a limitation on pet policy, partying, or even making significant modifications to your unit or using common areas for personal events.

 

Interaction with Other Real Estate Laws

The Sectional Properties Act 2020 works alongside other key real estate laws in Kenya, creating a cohesive legal framework for property ownership and management.

1. The Land Act, 2012

This Act governs the use and management of land in Kenya, including leasing, transfer, and subdivision. The Sectional Properties Act complements it by providing specific guidelines for sectional property ownership, ensuring clarity and security of tenure for you as a unit owner.

• Leasing and Transfer: The Land Act 2012 sets out the procedures for leasing and transferring land. When you own a sectional property, these procedures apply to the transfer or lease of your unit.
• Subdivision: The Land Act 2012 outlines the requirements for subdividing land. The Sectional Properties Act builds on this by providing specific provisions for the subdivision of buildings into sectional units.

 

Conclusion

The Sectional Properties Act 2020 is a significant step forward in modernizing property ownership in Kenya. By providing clear guidelines for the subdivision of buildings into individually owned units, enhances the security of tenure and the value of real estate investments. However, it’s essential to be aware of the responsibilities and limitations of owning a sectional property title deed.

For more detailed information on the Sectional Properties Act 2020 and other related laws, refer to the Kenya Law Reports, the Ministry of Lands and Physical Planning, and the Institute of Surveyors of Kenya. You can also contact a real estate advocate to help you understand the nitty gritty of the Act and how it affects you.

By understanding and navigating the Sectional Properties Act 2020 provisions, you can make informed decisions, contributing to the growth and development of Kenya’s real estate sector.