_edite.png)
Disclaimer : This article is meant for informational purposes only and should not be construed as a legal opinion. Should you have any questions or need clarifications on the subject matter, kindly feel free to contact us for legal advice.
The Sectional Properties Act No. 21 of 2020 Laws of Kenya (hereinafter referred to as ‘the Act’) is the law that provides for the division of buildings into units to be owned by individual proprietors. This law also provides that the common property is to be owned by the proprietors of those units as tenants in common, including provisions on the use and management of the units and the common property. The specific objective of the Act is to, among others, simplify the process of registration of sectional properties and create an enabling environment for investors and property owners. It seeks to guarantee the rights of property owners by conferring absolute rights to individual unit owners over their units and vest in them, the reversionary interests thereto. Further, it seeks to align the law governing sectional properties with the Constitution of Kenya 2010, Land Act No. 6 of 2012 and Land Registration Act No. 3 of 2012.
This article discusses the salient features of the Act and where necessary, makes a comparison between the act and the repealed Sectional Properties Act of 1987 (hereinafter referred to as the 'repealed Act').
Salient Features of the Act
1. Application to freehold and leasehold tenure
The Act applies with respect to land held under freehold or leasehold tenure with intention to confer absolute ownership. In cases of leasehold tenure, the Act requires the unexpired term to be at least twenty-one years, unlike the repealed Act which required the unexpired term to be at least forty-five years. With the intention of bringing the sectional properties law in tandem with the current constitution and other laws relating to land, the Act, ostensibly, makes reference to the Land Registration Act No. 3 of 2012.
2. Issuance of certificates to individual unit owners
Individual owners of units under the Act are each issued with certificates of title or certificate of lease as the case may be. This was not the case under the repealed Act. In addition to issuing certificate of title/lease with respect to each unit, the Registrar also issues a certificate of registration of the corporation. The corporation is constituted by individual unit owners and it is mandated with the management of the common property.
3. Reversionary interest
Under the Act, reversionary interest shall vest with individual unit owners. The repealed Act provided that the management corporation was vested with the reversionary interests.
4. Dispute resolution
The Act provides for the establishment of a committee for internal dispute resolution mechanisms. Under the repealed Act, any disputes relating to the violation of the corporation’s by-laws were referred to the tribunal which was mandated to recover from an errant owner or tenant a penalty not exceeding Kenya shillings twenty-five thousands.
Under the Act, disputes in relation to the violation of the by-laws are referred to the committee of the corporation established therein and without any prescribed limit as to the penalties to be levied. In the event of non-compliance with an order of the Committee or if a party is dissatisfied with the decision of the committee, both may apply to the Environment and Land Court for enforcement of the order or, in the case of an appeal, from the decision of the committee as the case may be. The repealed Act provided that enforcement of an order of the tribunal in the event of non-compliance would lie with the Resident Magistrate Court and any right of appeal would be exercised at the High Court of Kenya.
5. Renting of residential units
The Act recognizes the autonomy of an individual unit owner to deal with their individual unit as they please independent of the common property and the mandate of the Corporation. This is unlike the repealed Act, where an owner renting out their unit was required to disclose to the corporation the amount of rent chargeable to the unit as well as pay a deposit to the corporation for maintenance, repair and/or replacement of the common property.
6. Use of technology
The Act emphasizes on the use of technology by the corporation in the management of its affairs thus progressively keeping up with the current changing times. The repealed Act was silent on this.
7. Termination of the sectional status of a building
Under the Act, the sectional status of a building may be terminated by a unanimous resolution of the unit owners, the substantial or total destruction of the building or pursuant to an order for compulsory acquisition and the corporation shall stand dissolved upon the termination of the said sectional property status.
Under the repealed Act, the sectional status would only be terminated by unanimous resolution or by an order of the court. The corporation was also required to apply to court for an order winding up the affairs of the corporation.
Upshot
The upshot of the changes brought about by the Act is that it gives property owners greater control and power to utilize their units as they please. This is an indisputable milestone as it provides them with the ability to easily access financial support from banking institutions while at the same time promoting lenders and other credit firms to advance credit or loan facilities without the risk of loss as they can now charge the individual unit directly without requiring the consent of the developer or the corporation.
Conclusion
If you are an investor and a proponent of the idea that real estate business is the best investment that is likely to guarantee you immense wealth in retirement, then you ought to understand some of these basic legal requirements even as you navigate through the process of owning a house under the Act.
Finally, legal formalities in matters concerning real property are of prime importance and with many cases of fraudulent property dealings being witnessed, it is advisable for property developers, investors, land owners and their agents to retain an advocate for such services as; legal advisory, drawing, certification and verification of documents, conducting due diligence among other services.
THE END
コメント