Land fraud puts off investor firms

Foreign firms have to pay more to carry out due diligence on Kenya’s land documents and this has dampened their desire to invest in their own offices.

The Chartered Financial Analysts Society East Africa said big companies were opting to hire offices instead of setting up new buildings because of uncertainty about the status of land records.

The country has in the recent past seen demolition of buildings said to have been built on road reserves or riparian land, leaving investors and banks with huge losses.

“We tell our clients to look at the cost of due diligence relative to the investment if the buildings are Sh10 million upwards. We ask them to engage a surveyor for an extra Sh100,000 to Sh150,000, besides legal fees, valuations and financing,” said Anne Kinyanjui of Iseme Kamau and Maema Advocates in Nairobi yesterday.

Ms Kinyanjui said alternatively, investors are advised to purchase maps or visit the adjacent Government institutions to help establish the boundaries of their portions. “We had a case where we took out a map before an investment and found that a road was passing right through the parcel. We engaged the Roads ministry and they helped re-route it to pass at the edge of the property,” said Kinyanjui.

Raphael Mwito, the business development manager at Britam, said Rwanda had bridged this gap by digitising its land system and this had made approvals fast and fraud-proof.

“When you are applying, you can actually see the sewer lines, water and electricity wayleaves, and it gives you conditions of use. You apply electronically and within 24 hours, you have your approval,” said Mr Mwito.

The Government has made an effort to digitise land records, but the process has developed several hiccups, including errors.