SEP 24 – After years of traveling to source mobile business accessories, four long-time friends decided it was time to start a business that would require less travel, allowing them to settle down.
To that end, Job Kariuki, Joseph Kamau, Shamton Githere, and Robert launched Zani Properties, a real estate company specializing in buying and selling land.
With land fraud on the rise, particularly among first-time buyers, the business also offers advisory services on best practices for property acquisition.
In this feature, the friends share insights on what to consider when acquiring property, the challenges one might face during the purchasing process, and how to avoid falling victim to real estate fraud.
“Due to the increase in appetite for land and the desire for home ownership, there has been an increase in cases of land fraud, and one needs to be vigilant to safeguard their investment,” said Job Kariuki, one of the directors of Zani Properties.
Kariuki emphasizes that buyers, upon identifying a piece of land that meets their needs in terms of convenience, size, soil quality, or location, should first confirm its registration status by conducting a land search using the title deed details.
Previously, buyers had to visit county and national land registry offices to obtain this information. However, the process has been simplified through the National Land Management System, which consolidates all land data onto a single platform.
“Conduct a search to know the true owner of the land, to know whether the land has a restriction such as a caveat, unpaid rates, or a bank charge, to know the exact size of the land as captured in the land records, to know the history of the land, and to know the rent payable to the government, if there is any,” said Kariuki.
Once the land’s availability is confirmed, Joseph Kamau, a director at Zani Properties, advises engaging a licensed land surveyor to verify the land’s dimensions and confirm its boundaries.
After this, the next step is to consult a reputable agent for a market estimate of the land’s value. This protects buyers from potential exploitation by sellers or brokers. A good agent will also assist in negotiating the best deal for the land.
“You should also instruct the services of a conveyancing lawyer in order to receive appropriate legal representation throughout the sales process,” says Kamau.
A lawyer can help one to verify documents such as wills, letters of administration of a deceased estate, and letters of allotment. Getting contracts reviewed by an attorney can help to identify if there are any red flags in the contract.
“Engaging the services of a conveyancing lawyer can help to resolve some of the common issues that come up in real estate transactions such as validity of titles, or legality of contracts,” explained Kamau.
Exchange of monies throughout the land transaction process is also safest when done through lawyers as opposed to directly from the purchaser to the vendor.
“While these services might cost you some money at the beginning, it is a cost worth bearing because it saves you from losing millions of your money to unscrupulous dealers,” posed Shamton Githere, also a director at Zani.
He adds that due diligence on the land can involve speaking with neighbors to learn about the true owner, the history of ownership to identify any disputes, and addressing often-overlooked issues such as drainage.
Once a buyer is confident that the land is suitable for purchase, they should instruct their advocate to prepare a letter of offer.
“The letter of offer is not a legal document but a binding agreement between the two parties involved that proves commitment,” posed Githere.
Some letters of offer demand that buyers pay a requisite down payment of at least 10 percent of the purchase price immediately on signing it.
Alternatively, the buyer and seller can mutually agree to open an escrow account which their advocates would oversee until completion of the sale.
“You should however avoid paying a booking fee, or deposits that exceed 10 percent of the purchase price of the land,” said Robert Karomo, one of the directors of Zani Properties.
After the letter of offer is signed, the seller’s advocate will draw up a sale agreement indicating the names of the buyer and seller, the agreed-on price, the mode of payment and documents to be supplied by the seller to facilitate registration of the transfer of land to the buyer.
Before signing it, one will need to facilitate the area land control board (LCB) composed of the area elders and the county commissioner with a fee ranging between Sh1,000 to Sh5,000 to ascertain legality and transparency of the trade.
The consent from the LCB, together with other documents such as land rent certificate, sale agreement, old title deed, KRA pin, land search, rates clearance from county and transfer instrument shall then be forwarded to the National Land Commission (NLC) to get a consent to transfer ownership of the land.
The buyer would then be required to pay for a stamp duty charged at the rate of four percent of the value of land in urban areas and two percent for rural areas to the Commissioner of Domestic Taxes, before now proceeding to settle the balance of the agreed payment in order to finalise the trade and become the legal owner of the property. Once that is done and one has acquired the piece, they can fence it to restrict encroachment.
For first time buyers, working with reputable firms such as Zani Properties can help one to navigate through the land buying process successfully, by avoiding the common pitfalls.
The organization, which mostly targets the middle class and civil servants, has properties in various parts of the country including Thika, Matuu, Rongai and Nakuru.
“In Kenya, it is not many people that can afford property worth more than Sh500, 000. We try to make our properties as affordable as possible, even if that means maintaining small profit margins,” said Karomo.
Through it’s community outreach arm the Zani Foundation, the company also engages in a number of activities such as supporting needy students with school fees and hospital bills, as a way of giving back to the community.
