How to do your due diligence when buying land

How to do your due diligence when buying land

If you are contemplating buying land, the first question you are probably asking yourself is where do I purchase the parcel? And how do I know I’m not getting conned?

These are genuine concerns which you can settle with assiduous research which is referred to as doing your due diligence.

Due diligence involves knowing the facts of the property by confirming the ownership of the land, its size and getting all the paperwork for the transaction in order.

You get to identify any discrepancies before making the purchase.

Here’s a list of things that land buyers need to check, before finalizing a deal:

Scouting for land

When scouting for land, you have to be on high alert as anyone can purport to be the owner of a certain parcel. There are incidences where someone showing you the land is not the owner.

To avoid such scenarios, you can interview the neighbors to establish the history of the land. Mostly in the rural areas, the neighbors and local administration i.e chiefs will know actual owners and the ancestry of the land can be confirmed.

Be extra careful if the price being asked for a particular piece of land is lower than the general pricing of the area. You can hire a land valuer or a real estate agent to establish there is nothing fishy with the pricing of the land.

Also, to ensure that the measurements of the plot and its borders are accurate, the buyer should take the help of a recognized surveyor to ensure you’re paying for what you are supposed to get.

Getting legal representation

The land transfer process like many transaction procedures in the country has its own legal structures. As such, you should get a lawyer one who specializes in conveyancing or property transactions who will guide you on the process. Getting a lawyer will help you ensure the transaction is up to the laws of Kenya.

Conduct a land search

The seller might have taken a loan from a bank, by pledging or mortgaging their land. Which is what the land search reveals and you can ascertain that the property does not have any incumbency or is attached to a bank. The search will also help you determine whether there’s a dispute with the land.

This search reflects the transactions (change of ownership through deeds) and encumbrances (legal dues) with respect to the land proposed to be acquired.

The buyer or the lawyer can get it done at the Ministry of Land office in the area. There, you will be handed a search certificate that gives you the history of the land. While at the lands offices, get a certified copy of the Green Card to confirm that the information on the land search documents.

This will enable you to identify any discrepancies in the land search documents in case of collusion between the seller of the land and the clerk at the land office.

Terms with the land seller

At this point, your lawyer will guide you on how to proceed but if you are satisfied with the land you should pay a deposit of at least 10% of the purchase price. 10% is the recommended value for a legal sale agreement to be recognized in Kenya. Putting 10% as the threshold, the less you can pay the better to reduce risk in case of any eventualities moving forward.

Before buying you should obtain other clearance documents including a land rates clearance certificate from the local government and land rent clearance from the Ministry of Lands. You can have your lawyer assist you. These documents are particularly important because failure to present them may result in the transaction being revoked via a court order.

When buying from a Corporate

If you’re purchasing the land from a company, a land buying enterprise or a SACCO it is prudent you get the Registration Certificate as proof that it legally exists. As you would for an individual, ask for the pin certificate to confirm the authenticity of the company and its directors. Such information you can establish whether previous sales were above board or if any of the directors were involved in a land fraud case. In which case you can retract and opt for another entity to deal with.

Also, get the original copy of the title deed and a certified copy of the land documents from the company.

By Gitonga Muriithi, Head Of Sales and Marketing, Centum Real Estate

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Centum Real Estate land Green Card Ministry of Land

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