A guide to buying land without tears

Mr Dismas Otieno was desperately looking for land to buy so he couldn’t believe his luck when someone offered him three acres of prime land at Rodi Kopany in Homa Bay County at a “reasonable” price.

Believing he had struck the deal of a lifetime, Mr Otieno, a Nairobi-based businessman, snapped it up without asking too many questions, fearing that the seller might change his mind if someone came up with a higher offer.

That was in 2014, and land prices had more than doubled in the previous five years as the modest market centre started attracting investors following an improvement in  the area’s infrastructure.

He was promised a title deed and, as agreed, paid the remaining cash, happy and relieved that he had finally become a land owner.

“I neither conducted an official search on the land nor involved a lawyer or a surveyor because I believed that, since it was ancestral land in the village, the seller could not con me.  But I later learnt that the same piece of land had been sold to two other unsuspecting buyers, and that the person who had “sold” it to me was not even the real owner,” says Mr Otieno.

With hindsight, he acknowledges that he made a mistake by hurrying the process, not doing enough consultation, and not even visiting the site. 

“I think that, had there been two or more of us, we would have not been conned. But since I was alone, some crucial considerations escaped my mind and given that I had little time because I wanted to rush back to the city, I paid dearly for the mistakes,” he says with a tinge of regret.

But he is not alone. Mr Otieno’s  is just one of the many tales of land buyers or investors who realise too late that they have been conned  after falling prey to either cunning land sellers or unscrupulous brokers who target vulnerable buyers.

Acquiring property can be a thorny issue, but buying land is especially tricky since ownership is sometimes hard to establish  and the purchase process is prone to infiltration by fake agents.

Prospective investors, often gullible individuals, have found themselves counting their losses after being conned by wily “sellers” who take advantage of their ignorance or haste to defraud them.  Mr Mr Felix Onyango, the Chief Executive Officer of Dominion Valuers, says that anyone planning to buy land should have sound information on it.

“A little bit of research is important because there is a lot happening in the property market,” says Mr Onyango, adding that an individual can close a deal much faster than when more people are involved, since he/she does not have to consult anyone before making a decision.

But he quickly adds that in most cases, it is  individual buyers who fall victim to shady

land deals since they want to get the process over and done with quickly. 

“There is more responsibility on the lone ranger who is trying to buy land as opposed to a group; two are better than one any day. When you have partners, you are less likely to be conned because decisions are shared and there is a lot of toing and froing during the consultations,” he offers.

Mr Gabriel Onga, Undugu Corner Housing Cooperative Society secretary, concurs, adding  that the advantages of buying land as a group outweigh those of going it alone. For one, he notes, the price of the land will be relatively cheaper. 

“A big parcel of land bought as a group becomes cheap because it is sold at a wholesale rather than a retail price, and can later be subdivided among the individuals involved. For instance, I am in a group that has 123 members. We have been buying land as a group then subdividing it before reselling the parcels at a profit,” he says.

In addition, he says, an individual is more likely to get conned because, in an attempt to save money, he/she might not only be in a hurry to complete the process, but also  fail to involve a professional land valuer, who would ensure  that he/she gets the best value for their money.

Mr Onyango adds that when buying as a group, there is adequate latitude for objectivity as the different members  tend to look at the deal from different angles, which can in turn eliminate the dangers of being shortchanged.

“The possibilities of being shortchanged exist even when you are buying as a group, but there is that level of objectivity in a  group since the members more often than not have different points of view, which can help eliminate the dreaded mistake,” he points out.

He further notes that a group can marshal resources better than an individual, besides offering a  feeling of confidence since in most instances, the purchase is well thought-out.

“There is always that benefit of an extra eye looking at the deal from a different point of view or a different angle, helping bring a little bit more clear-headedness as opposed to an individual going it alone, who might close his/her eyes to many things,” says Mr Onyango.

But like with many other ventures, buying land as a group has disadvantages.  The first one, he notes, is that a deal might take long to conclude as a result of the wide diversity of views and financial strength, leading to unforeseen costs.

“People do not have equal financial capabilities so sometimes you find that some members do not have thereby,  inconveniencing others when they delay paying for the land, which sometimes leads to the price of the land  going up,” Mr Onyango says.

Meanwhile, Mr Onga notes that the cost of the land could also go up because  ecisions take too long to be arrived at and consultations must be carried out.

“The bigger the group, the longer it takes, making it relatively harder to make decisions quickly.

But what fuels the rising cases of buyers being shortchanged?

Mr Onga cites ignorance and the quest by Kenyans to own property in prime areas as critical factors that have left many buyers vulnerable to con men posing as brokers.

“There is that lack of knowledge on the steps involved in buying land, and for many individuals, lack of money to pay experts and conduct due diligence.”

Mr Onyango notes  that many Kenyans are not aware of the processes involved in land transactions and they don’t bother to do so even when they are buying land, leaving themselves  at the mercy of sly wheeler dealers to take advantage of them.

“People mostly get information after the deal is  done instead of first getting background information. In some instances, buyers even leave the responsibility of verifying the authenticity of the land they are buying to brokers and agents,” he says.

The two warn that prospective land buyers, whether an individual or a group, should pay attention to certain critical steps which, if they fail to follow, they are  likely to get less than they bargained for, or to lose their money altogether.

Mr Onyango says that buyers should involve professionals in the process, particularly a qualified surveyor registered with the Board of Registration of Architects and Quantity Surveyors of Kenya and a lawyer.

He also advises potential investors to avoid dealing with brokers and instead seek out the actual land owners. They should then visit the site and, if satisfied that all is well on the ground express interest in buying the land and ask for a copy of the title deed from  owner, which they can  present to their lawyer to confirm that it is genuine.

“The scale of the investment will determine whether you get professionals. But bring on board a land surveyor, a land valuer and a lawyer. These are critical professionals whom you should engage in any land transaction as they will help with the legal steps on how to close the paperwork,” he explains.

OFFICIAL SEARCH

He says that a lawyer will help in the official land search at the land registry after getting the copy of the title deed from the owner of the property while the surveyor will help in ensuring that the beacons on the land are in the right place and the title for the parcel you are buying corresponds with what is on the ground.

Confirm boundaries

“The owner will show you the beacons on the property which mark the land’s boundaries, but you need a surveyor to confirm the boundaries,” he says.

Mr Onga says that after all this is done, the seller’s lawyer can draft a sales agreement after discussing the terms of the sale, adding that the prescribed standard is a 10 per cent deposit, with the 90 per cent balance to be paid in 90 days. The seller is required to supply three copies of his/ her passport-size photos, copies of  his/her personal identification number (PIN) certificate and national identity card, which should all match the documents.

However, if you are buying land from a company, it should give you copies of   a certificate of incorporation, the company’s PIN certificate and the PIN certificates and IDs of its board of directors.

“It is easier to get this information at the negotiating stage before you sign the sale agreement. The deposit could be held safely by the lawyer as a stakeholder.  Also, the sales agreement should be signed and stamped to authenticate the contract,” Mr Onga says. 

He adds that once these procedures have been completed, the lawyer can prepare the land transfer document, after which both the buyer and the seller should appear before the local Land Control Board, if the land is in rural area, or the local land commission, if it is in an urban area, to get consent to transfer of the land.

“You cannot transfer land ownership without the board’s consent.

 But after you get its consent, you can sign the transfer documents and attach the photos of both the buyer and seller.  Once the transfer is effected at the lands office and the title transferred to the buyer, the buyer’s lawyer can release the balance to the seller’s account.” 

However, Mr Onga notes that if the buyer is unable to register the transfer at the land’s office due to an unforeseen dispute over the land, then the seller’s lawyer might have to refund the buyer the money he/she has paid, excluding the deposit.  He points out that this is another stage where the involvement of a professional also helps.

And just to be sure, he adds the buyer should do another search at the land office after the completion of the sale to ensure that what is reflected in the file at the registry corresponds with the document  he/she has in hand.

“Basically, all transactions should be done through a lawyer as this makes it possible for you to seek recourse should issues arise later own. The lawyer will ask pertinent questions on a buyer’s behalf,” Mr Onga advises.