Law of Property in Land II (2023)
Law of Property in Land II (2023)
(LPL 208)
STEPHEN NYARANGO AYIERA
INTRODUCTION
• Conveyancing- ‘legal process through which ownership of land
or of an interest in land is transferred from one person to
another.’ Prof. P.H.Kenny.
• Conveyancing includes; sales, purchases, leases,
charges/mortgages, settlement etc (Strouds Judicial Dictionary)
• Conveyance- ‘an instrument conveying an interest in land from
one person to another.’ (Graveland v Porter)
• Rights and obligations of parties
• Concerns land or interests accruing there from.
• The student to have a grasp of other disciplines of law e.g. land
law (I), contract law, environmental law, equity and trust laws,
planning laws, revenue laws, company law, law of succession etc.
INTRODUCTION
SUBJECTS OF CONVEYANCING
(i) Freehold
(ii) Leasehold
(iii) Charge
(iv) Licence different from lease s.2 of the Land
Act (Runda Coffee Estates .vs. Ujagar Singh
(1966)EA 564). PART VI of the Land Act, PART
IV of the LRA.
INTRODUCTION
• One can assign a Lease but not a licence.
however a licence coupled with interest can
be assigned.
(V) Easements & Analogous Rights- Kamau vs.
Kamau-creation of easements Part X of the
Land Act, Part X of the LRA
Conveyancing process
• Preparation of contract of sale-sale
agreement.
• Investigation of title to land.
• Searches to establish the legal ownership of
land and encumbrances.
• Preparation of Conveyancing documents,
approving and engrossing.
• Registration of documents to either transfer
ownership or security or discharge an interest
ELEMENTS OF CONVEYANCING
• DUTIES & RESPONSIBILITIES OF THE
ADVOCATE.
(i) Initiation of correspondence upon being
seized of instructions.
(ii) ACTING FOR A SELLER/VENDOR
(a) obtain full particulars of the parties;
(b) particulars of the property;
(c) Consideration/price;
(d) Deposit-find out whether paid
ELEMENTS OF CONVEYANCING
(e) details of encumbrances e.g. Charge.
(f) whether property vacant and chattels
thereon
(g) Completion date and availability of
purchase money
(h) prepare sale agreement.
(i) prepare title documents
(j) approves transfer/conveyance
(k) procures execution of transfer of
conveyance
ELEMENTS OF CONVEYANCING
(iii) When Acting for the Purchaser.
(a) As above (a-g)
(b) Advise the client on finances, future
liabilities, legal costs and other
expenses
(c) carry out the search
(d) scrutinize title documents
(e) approve sale agreement and
requisition for the same
ELEMENTS OF CONVEYANCING
(f) Prepare transfer or conveyance and
engross the same (Engrossing-making of
final fair copies of a conveyance/document)
(g) execution of the conveyance or transfer
(h) stamping and lodging the documents for
registration.
(i) obtaining and paying the purchase price to
the vendor’s advocates.
ELEMENTS OF CONVEYANCING
(iv) When Acting for both Parties
• Purchaser and vendor, lender and borrower-
ethical and professional responsibility issues
arise
• Not to act where there is or likelihood of
conflict of interest, s.134 (1) of the Evidence
Act, King Woolen Mills Ltd vs. M/s Kaplan &
Stratton Advocates Civil Appeal No.55 of
1993
ELEMENTS CONVEYANCING
• Issuance of professional undertaking-promise
to do or not to do something.
(a) given to professionals;
(b) to be in writing even nothing in principle
to prevent it from being oral
(c) required when obtaining title documents
from a lending institution/vendor’s
advocate
(d) discharging a mortgage/charge on
completion
ELEMENTS OF CONVEYANCING
• The advocate must take instructions on:
(i) Name, address, telephone number and e-
mail of the client if alias it should be
indicated so. Where names differ
(identification and title documents) the
client to swear a statutory declaration as
provided under Oaths and Statutory
Declaration Act Chapter 15 Laws of Kenya.
(ii) Details of the property i.e Land Reference
Number/Title Number
ELEMENTS OF CONVEYANCING
(iii) To obtain deposit if acting for the purchaser.
Even though there is no legal requirement to
that effect. Its is a sign of commitment to the
transaction at hand.
Condition 3 of the L.S.K conditions of sale
10% of the purchase price to be paid on or
before executing the agreement for sale of
land.
(iv) Information regarding completion date-
enable one to establish breach of contract or
not.
ELEMENTS OF CONVEYANCING
-to be agreed amongst parties (90 days
under the L.S.K conditions of Sale).
-place of completion.
-Completion documents .
-default on or before the date of
completion may lead to rescission of the
contract by the aggrieved party.
- No legal action may be taken on the
contract before the expiry of the contractual
date of completion
ELEMENTS OF CONVEYANCING
- contractual date of completion follows the
actual date of completion.
- completion notice may be served by a
party who is ready, able and willing to
complete the transaction. The notice
requires the other party to complete the
payment within 21 days failure to which
the aggrieved party may rescind the
contract.
- Time is of essence clause.
ELEMENTS OF CONVEYANCING
(v) Source of the purchase money. So as to issue
professional undertaking where necessary.
(vi) special terms which parties wish to be
included in the agreement of sale.
(vii) Nature of property ownership-
joint/common ownership, natural/juristic
person.
(viii) approval of the sale agreement,
execution, stamping (though not necessary),
obtaining deposit from the purchaser and
have it held by a stakeholder
ELEMENTS OF CONVEYANCING
• Stakeholder (an advocate or an agent)-holds the
deposit pending the completion of the sale.
• SEARCHES
• Establishes
• Land reference number;
• The owner/proprietor;
• Registration particulars;
• Presence of encumbrances;
• Presence of any burdens i.e covenants imposed on
the land
ELEMENTS OF CONVEYANCING
(a) Official search- ss.34-36 of the LRA
• Particulars of the subsisting entries in the
register, certified copies of any document, the
cadastral map, or plans filed at the registry upon
payment of prescribed fees.
• Certified copies signed by the registrar to be
received as prima facie evidence in court.
• Undertaken by officials at the Registry, more
advantageous than a personal search because it
enjoys a state guarantee.
ELEMENTS OF CONVEYANCING
PROCEDURE
• Pays the prescribed fees and applies in
writing for an official search to the Land
Registrar.
• Land registrar conducts the search and issues
a Certificate of Official Search.
• Government to be held responsible for
whatever they purport to find.
Elements of conveyancing
(b) Personal Search
• Conducted by the advocate or his clerk;
• Advocate takes personal responsibility for
what he purports to find.
PROCEDURE
• Pays the prescribed fees, requests for the
parcel documents then takes notes.
(c) Postal Search
• Results of the search are mailed/posted to the
applicant
ELEMENTS OF CONVEYANCING
• Not prudent because the status of the register
may be altered by the time the results reach
the applicant through the post.
ELEMENTS OF CONVEYANCING
(FURTHER OBLIGATIONS
(i) Obtaining a Rates Clearance Certificate
• Properties within a rating authority;
• Imposed pursuant to the Rating Act Cap 266.
ELEMENTS OF CONVEYANCING
(see also the Urban Areas and Cities Act)to raise
revenue from land located within their
municipalities/jurisdiction.
• Rates levied after the local authority
concerned has undertaken valuation and
opened up a Valuation Rating Roll.
• A proprietor may object to the valuation. If no
objection, the rates are confirmed after
sometime.
ELEMENTS OF CONVEYANCING
• Upon payment of requisite rates. One is issued
with a Rates Clearance Certificate
• Without a Rates Clearance Certificate, the
Land Registrar will not register any transfer or
conveyance or any dealing in land. (s.38 LRA)
• Rates to be paid whether property of freehold
or leasehold.
(ii) Obtaining a Land Rent Certificate
not required where the land in question is
freehold (s.39 of the LRA )
ELEMENTS OF CONVEYANCING
(iii) Obtaining Consent from the National Land
Commission.
• Where land is leasehold
• Initially issued by Commissioner for Lands
(iv) Obtaining Land Control Board Consent
• Imposed by the Land Control Act Cap 302
• Required where the land in question is
agricultural land
ELEMENTS OF CONVEYANCING
(v) Obtain consent from the Board of
municipalities/Cities /County Governments (s.20
(d) of the Urban Areas and Cities Act).
• Where the lessor is a municipality, City or County
Government.
• Initially was a town’ clerk’s consent.
(vi) Obtaining Consent of Trustees
• In cases of settled land, where the Consent of
trustees must be obtained e.g. Where the land
in question is vested in the National Parks of
Kenya their consent must be obtained
ELEMENTS OF CONVEYANCING
(vi) Land owned by other authorities
• Where one is dealing with Kenya
Railways/Kenya Ports Authority land one must
be obtained
(vii) Obtaining a Discharge/ Re-conveyance.
• Where the land in question is the subject of a
charge, it must be discharged and a discharge
obtained.
ELEMENTS OF CONVEYANCING
(viii) Payment of Stamp duty
• Ss. 5, 6, 7, 10, 19, 20, 24 and 26 of Stamp duty Act,
CAP 480 Laws of Kenya.
• A document required to be stamped shall not be
registered until the requisite stamp duty has been
paid. (S. 46 LRA)
• Instruments which must be stamped are : transfer,
lease, partition, charge and mortgage, discharge of
charge and re-conveyance of mortgage, insurance
policy, higher purchase agreement, chattels mortgage,
transfer of chattel, Powers of Attorney, debenture and
Memorandum and Articles of Association.
ELEMENTS OF CONVEYANCING
• Stamp duty is based on a % of consideration based
on the instrument/value of the subject matter.
• Valuation section of the Department of Lands to
value the property for purposes of assessment of
stamp duty.
(i) Transfer of Immovable Property
(a) Land within a Municipality - 4% of the value of the
property
(b) Land outside a Municipality/agricultural land-2%
of the value of the property
ELEMENTS OF CONVEYANCING
(ii) Mortgages and Charge/2nd/subsequent
charges
2/= per 1,000/= i.e. 0.2% or 0.002.
(iii) Further Mortgage or Charge: 1/= per
1,000/= i.e. 0.1% or 0.001.
(iv) Equitable Mortgage or Charge 1/= per
1,000/= i.e 0.1 or 0.001
(v) Discharge of Charge or Re-Conveyance of
Mortgage-Stamp Duty is also based on the
amount secured. The rate is 50 cts per 1,000/=
i.e., 0.05% or 0.0005.
ELEMENTS CONVEYANCING
(vi) Leases-stamp duty based on the Annual Rent
Payable.
(a) Period exceeding 1 year but less than 3 years: 10/=
per 1,000/= i.e. 1% or 0.01
(b) Period exceeding 3 years: 20% per 1,000/= i.e. 2%
or 0.02.
(vii) Gift inter-vivos (voluntary transfer)-given during
the life of the donor.
• ‘in consideration of love and affection’ however
transfer for value and stamp duty is based on the
value of the property.
ELEMENTS OF CONVEYANCING