Ask a Lawyer Series : What entails the handover process from developer to homeowners?

 In Kenya, the handover of management responsibility for a property development from the developer to a management company (MC) or a unit-owners' corporation (depending on the type of development) is governed by the Sectional Properties Act, 2020. This process typically involves the developer appointing a board within a set timeframe after selling a certain percentage of units, followed by the handover of management to the unit-owners or their appointed board.
Key Steps in the Handover Process:
1. Developer's Responsibility:
Sectional Plan Registration: The developer must register the sectional plan, which defines the individual units and common areas.
Corporation Establishment: A corporation, often referred to as "The Owners, Sectional Plan No..." (based on the plan number), is established upon registration of the sectional plan.
Management Agreement: A management agreement should be in place to manage the handover process to the unit owners.
Board Appointment: The developer must appoint a board within 90 days of selling 50% of the units or 180 days after selling the first unit.
2. Unit-Owners' Role:
Election of Board: Unit owners elect their own board of directors.
Management Handover: The developer hands over the management of the estate (common areas, utilities, etc.) to the unit-owners' board.
Auditing: The new board should retain an independent auditor to review the books and records of the MC.
Transfer of Interest: Once the board is elected and the management is handed over, the developer typically conveys the reversionary interest in the mother title to the management company.
3. Legal Framework:
Sectional Properties Act, 2020: This act provides the legal framework for sectional properties, including the handover of management from the developer to the unit-owners.
Registration of Transfer: The transfer of ownership, including the handover of management, needs to be registered at the Lands Registry.
Corporation Notice: The corporation must notify the registrar of any changes in membership (unit owners entering or exiting).
In essence, the process ensures that the developer's initial control over the management of the development is transitioned to the unit-owners, allowing them to manage their common areas and shared facilities collectively through a democratically elected board.

Ask A Lawyer series: offence of obtaining money by false pretenses

Obtaining money by false pretences is a misdemeanor under Section 313 of the Kenyan Penal Code. It's a crime where someone intentionally deceives another person by making false statements or presenting themselves as someone or something they are not, with the intent to obtain money or property. 

The prosecution must prove the accused obtained something capable of being stolen, did so through a false pretence, and had an intention to defraud.

Key elements of the offense, according to the Kenyan Penal Code and case law, include:
A false representation:
This can be a statement, writing, or conduct that is untrue and known to be false by the person making it.
Intent to defraud:
The person must intend to deceive and cause the victim to part with their property.
Anything capable of being stolen:
The object of the deception must be something that can be stolen, like money, goods, or services.
Inducement:
The false representation must induce the victim to give up their property.
Example: If someone falsely pretends to be a contractor to secure a contract and payment, and the contractor then pays them without realizing the deception, the person could be charged with obtaining money by false pretences.

The Procedure for Succession in Kenya

In Kenya, the succession process, governed by the Law of Succession Act, involves distributing a deceased person's property to their beneficiaries, either through a will (testate) or according to legal rules if no will exists (intestate).

Here's a breakdown of the process:

1. Types of Succession:

• Testate Succession:

When the deceased leaves a valid will outlining how their property should be distributed. 

• Intestate Succession:

When the deceased dies without a will, the estate is distributed according to the Law of Succession Act, prioritizing the spouse, children, and other relatives. 

2. Key Stages in the Succession Process:

• Reporting the Death:

The death of the deceased must be reported and a death certificate obtained. 

• Identifying Heirs and Beneficiaries:

Determine who is entitled to inherit the deceased's property. 

• Applying for Probate or Letters of Administration:

• Probate: If there's a will, the executor named in the will applies to the court for a grant of probate. 

• Letters of Administration: If there's no will, an application for letters of administration is made to the court. 

• Gazetting the Application:

A notice of the application is published in the Kenya Gazette to allow for any objections. 

• Court Hearing and Grant:

The court hears the application and, if no objections are raised, issues a grant of probate or letters of administration. 

• Administering the Estate:

The executor or administrator manages the estate, settles debts, and distributes assets to the beneficiaries. 

• Land Transfer:

For land, the process involves transferring ownership from the deceased to their heirs, requiring legal steps and ensuring fair distribution. 

3. Intestate Succession Rules (if no will):

• The estate is distributed according to the Law of Succession Act, prioritizing the spouse, children, and other relatives. 
• Specific rules apply to the distribution of property among different family members, including children, parents, siblings, and other relatives. 
• The court will take into consideration multiple factors and rules to ensure a fair and legal distribution of property to the beneficiaries. 

4. Important Considerations:

• Consulting Legal Professionals:

It's advisable to seek legal advice from a qualified advocate to navigate the complexities of the succession process. 

• Drafting a Clear Will:

Creating a clear and comprehensive will can help ensure that the deceased's wishes are carried out and prevent potential disputes.

• Appointing Competent Executors and Trustees:

Choose individuals who are capable of managing the estate and distributing assets according to the will or the Law of Succession Act.

• Land Registration Act 2002:

The Land Registration Act governs the registration of land and provides the legal framework for transferring land ownership. 

• Kenya Gazette:

The Kenya Gazette is used to publish notices related to succession applications, allowing for public scrutiny and objections. 

Legal Framework Governing Joint Ownership in Kenya

Introduction

The Land Registration Act, 2012 governs land ownership in Kenya. Under Section 91(2) of the Act, land may be owned jointly or in common:

• Joint Tenancy – Where co-owners have equal, undivided shares, and the right of survivorship applies.
• Tenancy in Common – Where co-owners have distinct, divisible shares with no right of survivorship.

To have a holistic  understanding of joint tenancy and tenancy in common and their distinct features, please read our previous article titled, Co-owning Property in Kenya: Joint Tenancy vs. Tenancy in Common

 Disputes may arise in either form of ownership when the owners disagree on managing or disposing of the property.

The Legal provisions

The Land Registration Act, 2012, and its subsidiary legislation, Land Registration (General) Regulations, are the primary legislations governing land ownership and disputes in Kenya. Key provisions relevant to joint ownership disputes include:

• Section 91: Provides for the two co-tenancies, the joint and the tenancy in common, and gives meaning to the incidents they can occur and co-owners’ rights. It also provides for the general presumption where an instrument of transfer of interest between two or more people does not specify the nature of their rights; there shall be a presumption that they hold the interest as tenants in common.
• Section 92: Guarantees the right of each co-tenant to receive a copy of the certificate of that land with an endorsement signed by the Registrar. A designated co-tenant will receive the original title. Allows the court to appoint a manager to oversee the property if co-owners cannot agree on its management.
• Section 93: Provide that where a spouse obtains an interest in the land during the subsistence of the marriage, such property shall be deemed as matrimonial property and will be dealt with under the Matrimonial Property Act ( Cap.152)
• Section 94 entitles any of the tenants in common to make an application for partition to the Registrar with the consent of all the tenants; however, any of the tenants or someone who has a decree for the sale of an undivided share in the land can still make the application without the consent of all the tenants.
• Sections 95 and 96 entitle the Land Registrar to cause the parties to mediate/negotiate and either transfer the share or sell the property and divide the proceeds if the partition would result in less than the minimum acreage limit.
• Section 97 provides that any partition of an undivided share is subject to a charge; there can never be a partition without the lender’s written consent, thus discharging the entire property.

 

𝐇𝐨𝐰 𝐭𝐨 𝐆𝐞𝐭 𝐚 𝐓𝐢𝐭𝐥𝐞 𝐃𝐞𝐞𝐝 𝐟rom 𝐈𝐧𝐡𝐞𝐫𝐢𝐭𝐞𝐝 𝐋𝐚𝐧𝐝

The process involves:
1. Report the Death

Start by getting the death certificate of the landowner. This is needed to begin any succession process.

2. Apply for Succession

Go to the High Court (for formal succession) or Magistrate’s Court (for estates below a set value) and file a petition for letters of administration (if there was no will) or probate (if there was a will).

This legal process determines who inherits what.

3. Publish in Newspaper
Once you file, a public notice is published in the newspaper for 30 days

This allows anyone with objections to raise them.

4. Receive Grant of Letters of Administration / Probate

After 30 days with no objection, the court issues a grant of letters of administration or probate to the rightful heirs.

5. Apply for Confirmation of Grant

After six months, apply to the court for confirmation of the grant, which legally distributes the land to the named heirs.

 The court will specify the portions of land for each beneficiary.

6. Land Transfer at Registry

With the confirmed grant, go to the land registry.

The land will be transferred to the names of the heirs as per the court’s instructions.

If it’s one person inheriting, it goes directly to them.

7. Survey and Beaconing (if necessary)

If the land is being subdivided among multiple heirs, hire a licensed surveyor to carry out subdivision and beaconing.

Then apply for a mutation to split the land officially.

8. Title Deed Issued

Once all documents are in place and the registry approves, a title deed will be issued in your name(s) – officially making you the legal owner(s).
 

Courtesy of #njogu

Estate planning in Kenya

 

Estate planning in Kenya involves several key components and strategies to ensure that your assets are distributed according to your wishes after your death or in case of incapacitation. Here's an overview based on current practices and legal frameworks:

What is Estate Planning?

Estate planning is the process of anticipating and arranging for the disposal of an estate. It includes making decisions about who will receive your assets, how your responsibilities will be handled, and how to minimize uncertainties or taxes during the administration of your estate.

Key Components of Estate Planning in Kenya:

1. Wills:
   • A will is a legal document that specifies how your assets should be distributed upon your death. It is crucial for ensuring that your estate goes to the intended beneficiaries. In Kenya, anyone of sound mind over the age of 18 can write a will, which must be witnessed by two individuals who are not beneficiaries.
     
     
2. Trusts:
   • Trusts can be an effective tool for estate planning, allowing for more control over how assets are managed and distributed. They can be used for tax efficiency, asset protection, and to manage estates for minors or those who might not be able to manage finances. There are various types of trusts, including revocable, irrevocable, and family trusts.
3. Power of Attorney:
   • This is important for managing your affairs if you become incapacitated. It allows you to appoint someone to handle your financial or health decisions. There are specific legalities around its creation and use in Kenya.
4. Beneficiary Designations:
   • For assets like insurance policies, pensions, or SACCO proceeds, naming beneficiaries in nomination forms is essential. This ensures these assets go directly to the named individuals without going through probate.
5. Succession Laws:
   • The Law of Succession Act governs the distribution of estates, whether testate (with a will) or intestate (without a will). This law outlines who inherits in case there's no will, the priority of heirs, and procedures for estate administration.
     
     

Practical Steps:

• Drafting a Will: Engage with a lawyer to draft a will that reflects your wishes accurately, ensuring it is legally binding and reduces potential for disputes.
• Setting Up Trusts: Consult with legal and financial advisors to create trusts that align with your estate planning goals, especially for complex family structures or to protect assets for future generations.
• Regular Updates: Estate planning documents should be reviewed and updated periodically, particularly after major life events like marriage, divorce, or the birth of a child.
• Understanding Tax Implications: Consider the tax implications of your estate plan, as certain structures like trusts might offer tax benefits.

Challenges and Considerations:

• Cultural factors might influence estate planning, with some reluctance to discuss death openly. However, having an estate plan can prevent disputes and ensure your intentions are clear.
• The legal process in Kenya can be complex, requiring knowledge of property laws, succession laws, and taxes. Professional legal advice is often necessary to navigate these complexities.
• For those with international assets or beneficiaries, additional considerations around cross-border estate planning are necessary.

Estate planning in Kenya is not just for the wealthy; everyone has an estate, even if it's modest. Proper planning can prevent the government or distant relatives from deciding the fate of your assets, thus securing your legacy and protecting your loved ones.