This article discusses how sectional titles are created, the concrete steps to be taken obtain the same in Kenya and conversion of existing sub-leases.
This is the second of a two part series seeking to demystify sectional title ownership in Kenya. In today’s blog, we discuss how sectional titles are created and the concrete steps to be taken obtain the same. We shall also discuss the conversion of existing sub-leases into sectional titles.
1. How are sectional titles created in Kenya
This process is initiated by the registration of a sectional plan. A sectional plan is drawn up by a licensed surveyor. The plan must be lodged together with an application for registration of the corporation which will manage the common areas for the estate or development and a list of all unit owners in the estate development. This sectional plan must be based on the building plans which were approved by the County Government when the estate development was being erected.
There are official fees that must be paid for the registration of the sectional plan of each unit in the estate development. Once these are paid, a certificate of title is issued in respect of each unit. This certificate of title indicates each unit’s share in the estate land or common property. The register for the estate land or the Mother Title is first closed and any interests which were noted thereon are transferred to the registers for each unit.
For the purpose of assessment of rates and ground rent by a rating authority, each unit constitutes a separate parcel of land. Each unit owner therefore individually bears his proportionate share in the rates and rent.
2. What is a Sectional Plan
A sectional plan is a drawing representing the entire parcel of land on which the sectional housing units or an estate are erected. It can include:
- a block plan showing the general layout of the estate development
- location of registered exclusive use areas (if any)
- beacons and certain measured distances as well as a floor plan showing each unit in the estate development and (if a building is multi storied)
- the units and parts of the units on each floor and
- any part of the building that is common property, walkways, stairwells, service rooms etc.
A sectional plan should have:
- a heading
- details of the parcel of land
- The number of units and user of the units and such other prescribed details,
A sectional plan must be accompanied by a statement by the surveyor that the buildings or units depicted in the plan are in the referenced parcel of land. The County Government must certify that the buildings in the sectional plan are as approved by it and the sectional plan must be signed and sealed by the office or authority responsible for survey (the Director of Surveys).
Upon registration of the sectional plan, a corporation will be formed by operation of the law and the Registrar shall issue a certificate of registration for the corporation to manage the estate development.
3. What are The penalties of not complying with the Sectional Properties Act?
There is a general fine of KES 250,000.00 for contravention of the Act by any person. The same penalty applies to board members of the corporation where the corporation is in default.
Developers and homeowners also need to take note that creating developments without registering sectional plans and selling or renting premises without sectional plans attracts a fine of KES 20,000,000/= or imprisonment of one year.
What are the current developments in Practice
On 9th May, 2021, the Cabinet Secretary for the Ministry of Lands and Physical Planning issued a notice indicating its intention to discontinue registration of long term leases and calling for the implementation of the Act.
The deadline for conversion of long-term sub-leases is December, 2022. Although the process has had challenges, the Ministry is now issuing sectional titles under the Sectional Properties Act, 2020.
4. What happens to existing sub-leases?
Section 13(2) of the Sectional Properties Act requires that all existing long term sub-leases of apartments, flat, maisonette, town house or an office to be reviewed to conform with the Act within two (2) years from December, 2020. This means the long-term sub-leases must be converted to sectional titles. After conversion, the sub-leases will fall away and the sectional titles will come into place.
A developer, a management company or an owner of a unit can initiate the conversion of long term sub-leases into sectional titles. The law allows the Registrar to dispense with the production of the original title if the developer is not willing or is unavailable to surrender the title to the parcel for the purposes of conversion.
We hope this article has been useful to you. If you a developer or homeowner looking to understand the sectional titles regime in Kenya or undertake conversion of your sub-leases to sectional titles, please reach out to Divinah Ongaki (email@example.com) or Elizabeth Omol (firstname.lastname@example.org).
The author is Divinah Ongaki, Managing Partner at Agema Analysts-Mombasa Office. Divinah is an Advocate of the High Court of Kenya, has been practicing law for over seven years in Kenya. She has worked for the best firms and as in-house counsel for some of the best companies in Kenya. Her expertise span various practice groups under Kenyan law such as real estate and finance, corporate law & M&A, IP law and Labour Law.