The dangers of buying illegally acquired property

A couple buying a house. (Courtesy/iStock)

There is a property that we intend to buy as an investment group in Nairobi. We undertook our own necessary due diligence and were ready to pay the deposit when our lawyer raised concerns that it sits on grabbed land. Can we proceed to buy the property as many buildings in the city are either on grabbed land or irregularly acquired property but have never been reclaimed nor recovered since independence?

Harry, Nairobi.

It is not advisable to proceed and buy a property that sits on illegally or irregularly acquired land as advised by your lawyer.

There are several recent occasions where the government through the Ethics and Anti-Corruption Commission has cracked the whip on grabbed public property.

However, there are shrewd business people who adore the adrenaline rush and would not mind knowingly buying grabbed property for sale at a profit to innocent buyers.

It is also true that some investors have knowingly constructed residential and commercial buildings on illegally and irregularly acquired public land.

Legally, Section 158 of the Land Act outlaws public property obtained through corruption.

Property acquired through corruption includes a building or land attained through a government official who may issue a certificate of ownership.

The law further explains that such property transactions would be illegal from inception and considered null and void – of no legal effect!

The Land Act describes illegal transactions which include that either party has been convicted of the fraudulent deal.

Others include property transactions that result in interdiction or retirement of a government official in the public interest on grounds of graft.  A court can also rule that a property transaction is fraudulent and revoke the deal.

Moreover, anyone found in possession of public property obtained through a corrupt transaction would be forced to forfeit it to the government without compensation.

The shocker is that a person found in possession of the property obtained through fraud shall be obliged to comply with the terms and conditions of the transaction.

Furthermore, he/she will be liable to legal remedies applied to a person who has breached a valid sale agreement complete with penalties.

As realities of the law sinks to crude investors who make their daily bread from fraudulently acquired public property, the future may not be very bright.

—Harold Ayodo is an Advocate of the High Court of Kenya.