Understanding the Unique Nature of Land Dealings in the 21st Century

'Land' bears a technical meaning in Land Economics and law. Its definition goes beyond what is popularly known as soil although it includes it. The parlance has been used interchangeably with property, although it is an example of the later. When discussions like this happen, always know that the concept of property is wide; it may be personal or real property, tangible or intangible, movable or fixed property.

Land as real property includes the earth’s surface and permanent developments (fixtures) on it, water and minerals and rights attached to them as well as space above earth’s surface and rights to use or access them within some reasonable limits allowed by law. It also includes such intangible concepts as restrictions and overriding interests, wayleaves, leases, sectional property and entitlements of parties involved with them.

Land can be owned or acquired by a community, state or an individual, and transferred from any of these entities to another through a due process. In any issue around land, parties have their duties, obligations, rights and privileges connected to land. The party could be the state, land owner, a financial institution, community or a foreigner.

Why Land is Unique

The demand and attributes of value of land is influenced by among many factors, which enhances its vibrancy in real estate market as a unique commodity. It is a special commodity whose supply is fixed and demand tends to increase and sometimes inelastic. The value is created because of its utility, transferability, scarcity, and inherent value appreciation (with certain exceptions).

Sustainable development relies on land as a capital. As urbanization and suburbanization continue in Kenya with the advent of devolution, the country stands to see vibrancy in the land market. However, the value and desire for property may be encumbered by cyclical economic as well as unavoidable circumstances such as credit shortfalls, low money supply, increased cost of living and risks associated with the nature of land and titles, the blighting and environmental issues posing risks to a particular property and stringent procedures?that may make many back off.

The predominant dealings in land are driven by user interests: real property investment, agribusiness, speculative motivations as well as key public initiatives such as industrial parks, green businesses, preserve public spaces or build institutional premises. Owing to the diversity of uses and the bundle of rights attached to land, it will remain one aspect of heritage that any parson would want to have a piece in a quest to meet the insatiable demand.

The Nature of Land Market

The continuum of land tenure runs from insecure to secure tenure. The former is the extreme end where land is occupied by squatters and those who have simply user rights with no legal validity of title, while the latter is the extreme end of the continuum where occupants or owners have secure title and legally occupy and exercise exclusive rights over the same, to occupy, dispose, use and hold as they desire of course within legal limitations. While all Kenyans and man for that matter always seek to have secure title, security of title is a matter of both security of title as well as sense of peace and mental health and safe environment that is linked to the particular property.

Prerequisites in a Land Dealings?

It is important to have actual notice of key features in land dealings what drives interest in land as it were. The following aspects need due consideration to elude pitfalls for want of knowledge, which may not stand as an excuse in defense before any competent court or tribunal:-

One: Firstly, Understand the property market. The property market is segregated and location specific. This is in terms of the user controls, pricing, approved size and plot ratios and ecological footprints. Further the market is characterized by diversity of players, from an urban high end, to rural and peri-urban settings. Certain properties are secured and titled while others are unregistered. Some are communally owned with undivided shared interests while some and owned in groups without individual exclusive right.

In any of these cases, there have been both successes and failures, triumphs and disillusionments emanating from the deals gone well or sour. It is on this backdrop that we need to take precautionary measures.

Two: Rational decision making criteria. Land buyer needs to be cautious, meticulous and be ready and able to consult widely from the instance you contemplate a land dealing. This is because as obvious as it may seem, land deals involve dollar funds at the macro level and parties with serious interests. Any loss and misapprehension of the issues results to woes. Therefore, for the sake of this costs and foregone opportunities, take it upon yourself, to walk along with sobriety, patience and prior informed steps. Tread carefully.

?Two: Professional Opinion and services. Seek professional guidance amongst land professionals and explain your needs and options for a good direction. Allow professionals to serve you and be ready to be guided. Let a physical planner and surveyor advice you on the development compliance issues and physical aspects of the land. Involve a land economist, to render advice on highest best use as well as the valuation of the same. The valuation can be on the basis of fair value, market value, market rent, and many synergistic aspects that you never knew existed. An environmentalist may help you in identifying the ecosystem benefits and any environmental issues if any. The lawyer will be instrumental in the conveyancing process.

Three: Due Diligence. There is a systematic process through which you will establish ownership, and key aspects on the subject land or property. I would mention here, two main points. Firstly, remember, in law, you are deemed to have constructive notice of a registerable property or interests in it. The respective registrar’s office has records of all these interests including the transitions and successive transfers and encumbrances registered upon them. Therefore, you must appropriate the process of due diligence ab initio. Let this be your prerequisite for any consideration in any land Deal.

Secondly, due diligence is not an option but a necessary exception. It helps you understand the transactionary history of the property, any encumbrances attached to it and whether any has been discharged. It also helps you understand priorities of lenders who have charged the property and terms of such interests.

The process should preoccupy you a big deal as it helps you establish whether the property in question has been a subject matter of claims or legal proceedings (lis pendens) and what came out of it. They also enable you to understand any financial undertaking or obligations tying the owner with a financier or creditors and whether the subject is charged or whether third parties have right to lien on them.

Kenyans must take this precaution without any reservation whatsoever. Due diligence should not be viewed as extraneous or an impediment to the process. It is actually a panacea to the potential hurdles and woes. The global and local debates on drivers to land acquisitions, have shown unique cases where citizens have been cajoled and swindled in property dealings that gets realized too late.

?Four: Don’t frog jump a step, as this will haunt you. When the deal is so good and the process so seems to flow smooth, we should make a sudden held and reconsider our speed. Land acquisition is a systematic processes, each stem with key obligations and statutory compliance that graduates to another with a deliverable. For example, when you pay rent, you must secure a clearance. When you pay stamp duty you need a receipt and completion documents before registration of transfers etc. You may not be heading to the right direction if you jump these kind of steps. They processes need not be a red tape per se but bureaucracy is the nature of the land institutions and you have no option but to comply.

Just be sure you are dealing with the right person. For example, surveyors and Valuers, must full members of the Institution of Surveyors of Kenya and duly registered by relevant Surveyors or Valuers registration Board and licensed to practice at the time. The same applies to the persons you deal with in the government offices to be sure he is not an imposter. It may not surprise you that some of the best swindlers are smart, sharp and will always promise heaven, depict some professional mien. They master their game in high level negotiation and look very knowledgeable in many ways you may not believe.

?Five: Trust the state and be vindicated through a due process. Legal ownership is guaranteed by the state in the indefeasible title deed or certificate of lease. You might have heard of multiple titling and multiple selling where in each case many people claim ownership and certain entitlements on a particular land in their name. Always ensure you are certain about the sanctity of the documents offered to you by seeking professional guidance. The state only recognizes legal documents issued by it through a due process. Therefore, it may be an uphill task to prove that you were an innocent purchaser without notice when you could have actual notice through due diligence proper. Caveat emptor!

?Conclusion,

The Ministry of Land and Physical Planning and the stakeholders including the institution of surveyors of Kenya have continued to highlight key processes and players in every stage of land administration process. The processes involve conveyancing, valuation, change of user, valuations, transfer, extension of leases and subdivision among others. A typical transaction in land may go through some of these processes. We need to take charge in our efforts and prospects and seek professional services when dealing with them. And you will be very crystal clear about your choices, the processes and ultimately secure a good deal.

Thank you indeed for reading the article. I hope you enjoyed.

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About the Author

Michael O. Okello is a land practitioner and widely published scholar with interest in governance, policy, law in the context of sustainable urban development in the 21st Century. He is an Alumni of Education for Sustainable Development in Africa (ESDA) Programme conceived under United Nations University Collaboration with ESDA partner universities in Africa. He is a Full Member of the Institution of Surveyors of Kenya. Licensed /Registered Valuer and Estate Agent with over 8 years of post licensing experience. He holds Master of Science in Sustainable Urban Development (renewable energy options) and a Bachelor Degree in Land Economics both from the University of Nairobi, and Beneficiary of trainings in Privacy and Data protection in Digital Africa (University of Pretoria -Center for Human Rights), Policies and Laws in Energy Sector (Power Africa-East Africa Energy Program), Land tenure and property rights (USAID), EIA/IA (African Nazarene University).

Okello is the current Honorary Chapter Secretary (Valuation Chapter) at Institution of surveyors of Kenya, a mentor to young professionals and university student leaders in Kenya. He has authored his debut book: 'Living a Fruitful Life'?: See reviews?https://t.co/C9rmvSljCu'?