CAVEAT! THE PREREQUISITES FOR A LAND DEAL!


By Michael O. Okello, MISK, R.V, REA, EIA/EA Expert

Land is a popular parlance in Land Economics and law. The definition of land itself goes beyond our literal recollections of soil. For instance, it includes the earth’s surface and fixtures thereupon, things in the subjacent (minerals and user rights) and any rights or things superjacent (air space) to reasonable extents. It also includes certain intangible concepts as tenure and property rights, restrictions, and overriding interests. The common writings on land matters may be tricky when we bring in jargons such as land tenures (community, public, private) and interests such as leasehold, freehold, or shorter terms of years.

 

Prerequisites in land dealings

Propensity to own, buy, sell, use or hold land revolves around its utility, transferability, scarcity, and inherent value. The predominant dealings in land are based on the inelastic demand for it and desire to gain access and enjoy ‘benefits’ such as. Upon land we are sure to establish green businesses, preserve public spaces and cultural park, conserve biodiversity or build institutional premises. Owing to the uses and its multifaceted bundle of rights, land and land use now poses an insatiable demand.

The continuum of tenure rights and entitlement to land is characterized by dealings that involve both smaller and large tracts of land parcels. The property market is segregated further and brings in players, from an urban high end, to rural and peri-urban settings. Some are secured and titled while others are unregistered communally owned with undivided shared interests. In any of these cases, there have been both successes and failures, triumphs and disillusionments emanating from the deals gone well or sour. It is on this backdrop that I will briefly engage with Kenyans in highlighting precautionary measures and key among other prerequisites in land dealings, viz:-

 

One: Rational decision making criteria. People should be cautious, meticulous and above all be willing to consult widely when dealing with any kind of property transaction. This is because as obvious as it may seem, land deals involve dollar funds at the macro level and parties with serious interests. The success in land transactions therefore calls for tradeoffs and intelligible engagements. Sobriety, patience and prior informed steps is paramount. Whoever takes you swiftly in the process like the world is ending tomorrow and promising heavens must make you wary. Seek professional guidance amongst land professionals and explain your needs and options for a good direction. Allow professionals to serve you and be ready to be guided.

 

Two: Due Diligence. There is always a need to establish various land based information through due diligence. Remember, in law, you are deemed to have constructive notice of the company and registerable property or interests in land. Therefore, you must appropriate the process of due diligence ab initio. Let this be your prerequisite for any consideration in any land Deal.

Due diligence is not an option, it is a must. It helps you understand the transactionary history of the property, any encumbrances attached to it and whether any has been discharged. The process also helps you establish whether the property in question has been a subject matter of claims or legal proceedings and what came out of it. They also enable you to understand any financial undertaking or obligations tying the owner with a financier or creditors and whether the subject is charged or whether third parties have right to lien on them.

Kenyans must take this precaution without any reservation whatsoever. Due diligence should not be viewed as extraneous or an impediment to the process. It is actually a panacea to the potential hurdles and woes. The global and local debates on drivers to land acquisitions, have shown unique cases where citizens have been cajoled and swindled in property dealings that gets realized too late.

 

Three: Avoid short-cuts. When the deal is so good and the process so seems to flow smooth, we should always authenticate and verify the status of the process again, just to be sure. Reason being, some of the best swindlers are smart, sharp and will always promise heaven, depict some professional mien. They master their game in high level negotiation and look very knowledgeable in many ways you may not believe.

 

Four: Consider and understand the processes involved. Land dealings are neither cheap nor extraordinary and never so swift either as they involve processes and procedures that should not be frog jumped. It only takes a sober person to get choices right. It is a sterling idea to involve a land professional at the very beginning and ask questions, especially in cases where you are not pretty sure about certain basic things (location, owner, history of transfers and successions, planning and zoning, user and physical planning controls among other things as per the law). We need to be sure we sail through ALL procedures, some of which come with statutory requirements with vivid authentication.

 

Five: Legal ownership is guaranteed by the state in the indefeasible title deed or certificate of lease. It is also worth noting that in the present techno-savvy generation, the availability of a copy of title and a sketch plan (mutations) are not evidence enough. You need to conduct an official search and engage the bearer a little more on the documents availed to you. You might have heard of multiple titling and multiple selling where in each case many people claim ownership and certain entitlements on a particular land in their name. When you purchase land, and especially before your clear all that appertains to the consideration and obligation, ensure you are certain about the sanctity of the documents. The state only recognizes legal documents issued by it through a due process. Therefore, it may be an uphill task to prove that you were an innocent purchaser without notice when you could have actual notice through due diligence proper. Caveat emptor!

 

Conclusion,

When you cannot find the basic answers from a vendor about the properties being offered to you, then the excitement should come to a sudden HALT. In other words, you may have not found what you wanted. I am of the opinion that we should always seek professional services of land sector practioners (lawyers, land economists, land surveyors and the fiscal officers, just to mention a few). That done, you will be very crystal clear about your choices, the processes and rightful steps to tread upon and ultimately secure a good deal.

About the Author

Michael is a practicing Valuer and a full member of the Institution of Surveyors of Kenya. He holds, MSc. Sustainable urban Development and B.A land economics (UoN). Michael has interest in research on land policy, land law, urban land economics and smart technologies on land tenure and property rights. He can be reached at [email protected]