The government has revised home ownership regulations. 

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Itching to own a house? Take note of the new apartment law

What you need to know:

What you need to know:

  • While home-owners are likely to gain, developers are part of the losers in the new law
  • You will now have more control over the shared social amenities like playgrounds, which sneaky developers have been converting to more blocks

Over the past few months, the government has revised home ownership regulations. The revisions under the sectional properties law on homeownership in Kenya are part of the State's efforts to boost homeownership.

According to Achero Mufuayia, an Advocate of the High Court of Kenya and a lands governance expert, the new regulations enable the ownership of individual units in buildings and common areas within and around the building.

In December 2020, President Uhuru Kenyatta signed into law the Sectional Properties Act of 2019 which repealed the Sectional Properties Act of 1987. One of the biggest impacts of this law will be on property development. "The number of private homeowners is likely to spike and stir the development of high-rise apartments," says Mufuayia. So what changes have been made and what do they mean for you?


The gainers

Homebuyers: Homebuyers in apartments will now be able to own a title deed. This title will either be in the form of a certificate of title or a certificate of lease. "Under the old law, property rights were held by the developer's property management company," says Mufuayia.

This will enable you to have full access and use over the apartment. According to Mufuayia, you will have proof of ownership, which will give you greater transaction ability, and access to financing. "Proof of ownership is critical in financial and disposal of properties. This now means that home buyers will have an easier time in the market should they opt to sell their property," he says. In addition, once you purchase a housing unit and get your title deed, you will be empowered to utilise the unit as you wish without jeopardising the interests of other unit owners in the apartment.


Commercial banks: The new law will provide commercial banks an opportunity to expand their credit books. "The independent and total ownership of apartment properties will give lenders greater incentive to extend credit to homeowners, who will now have titles with which they can secure credit," says financial analyst Reuben Kioko. This means that commercial banks will now be able to place charges on an individual title deed.


Developers: The new law will allow developers to subdivide buildings into two or more units. This shall be through the registration of a sectional plan that will be prepared by a surveyor from an approved building plan.


Common areas: With the majority of apartments in gated communities, buyers will own individual house units or homes then jointly own and share common areas. These common areas include playgrounds, gardens, and access paths. The ownership of these common areas will be through a company that will be founded for their management.


Surveyors and lawyers: Conforming to the new requirements is bound to create new business for surveyors and lawyers. Surveyors will be critical in the preparation and registration of sectional plans showing the list of unit owners. Once an apartment has been registered as a section plan, titles will be issued, which the developer will be legally required to transfer to his home buyers.


The losers

Developers: The new law has barred property developers from constructing additional buildings after selling some units. In addition, developers will no longer sell apartment units without sectional plans. This is meant to facilitate individual ownership. However, landlords and owners of existing houses will be allowed to convert their properties into units if they wish to sell them as such. At the same time, the apartment's mother title or head lease shall be closed. Mr. Mufuayia says that this will be done to nip any developer mischief in the bud.


Mortgage lenders: Commercial banks and mortgage financiers will now be required to give up the full rights to individual apartment buyers the moment they finish paying up their mortgage. Before, if you took a mortgage, your lender would register an interest in your property. This interest would give them legal power or the right to take your property if you contravene the terms and conditions of your mortgage contract.


Design tussles: With individual ownership, Mufuayia says that rows over renovations and redesigns among homeowners could occur. "Most homebuyers may want to make changes to the property design. This could be for purposes of adding value for resale or to suit their taste," he says. Previously, lack of absolute ownership meant that homebuyers could not make changes to their units.


Quick stats

Mortgage in Kenya

According to the Central bank of Kenya:

  • As of December 31, 2019, mortgage accounts stood at 27,993 with a value of Sh. 237.7 billion.
  • The mortgage penetration rate stands at around 2.7 per cent of gross domestic product (GDP).


Apartments in Kenya

According to a report by HassConsult:

  • In 2019, apartments took up 61.1 per cent of the market. Semi-detached houses took up 25.7 per cent while detached houses took up 13.2 per cent.


Did you know?

If you have a mortgage, you are entitled to tax relief on the interest you pay. "For example, if you take a Sh4 million mortgage, the relief will be on the interest you pay, subject to a maximum of Sh25,000 per month and Sh300,000 per year," says Jeremiah Rugunya, a certified public accountant and the lead consultant with Prolific Business Consultants.