New law opens the way for apartment ownership titles

I have desired to buy an apartment to live in nearer my workplace in Westlands but held back over several unanswered questions. First, I have colleagues who bought apartments in Kilimani, Lavington and Kileleshwa but have no documents to prove legal ownership.

None of them has a title deed and, therefore, cannot use their apartments as security for loans. There are also reported cases of buying a unit in a modern highrise building (from the outside) but reality sinks a few months after moving in when cracks start emerging from the walls over poor workmanship. There are also sad real-life experiences of Nairobians who bought apartments off plan, which were never constructed!
Leila, Nairobi

Owners of apartments will now be able to own title deeds for their residential units after President Uhuru Kenyatta recently signed into law the Sectional Properties Amendment Bill, 2020. The law provides for the division of highrise buildings into units to be legally owned by buyers and common property as tenants in common. 

For starters, common areas that are shared are swimming pools, parking lots, elevators and play grounds. The new law has several privileges, including giving apartment owners greater transaction ability in financing and disposal of properties in the lucrative real estate market.

The independent and complete ownership will also give banks greater incentive to lend to apartment owners since charges can be placed directly on individual titles.

According to the law, an apartment owner shall only be liable in respect of an interest endorsed on the sectional plan in proportion to the unit factor for his unit. 

Private developers can also subdivide buildings into two or more units by the registration of a sectional plan prepared, by a surveyor, from a building plan that has been approved by a county government.

Landlords or owners of existing units are allowed to convert their properties into units - if they want to sell them as units. This implies developers will no longer be allowed to sell units without sectional plans to enable individual ownership.

Before Uhuru signed the Bill into law, Nairobians bought apartments of which the developer remained with the mother title deed – some even used the document as security for loans without knowledge of the residential unit owners. There were also reported cases in which some rogue private developers constructed high-rise buildings on land whose title deeds were kept under lock and key by money lending institutions.

Some private developers took undue advantage as there was no law that compelled them to sub-divide common properties. This is now water under the bridge as with title deeds, owners can use the documents as collateral in acquiring bank loans.

More Nairobians may now have more confidence in purchasing apartments following the new law that will to some extent eliminate fraud through guaranteed absolute ownership through issuance of sectional titles.

The owners will also be issued with share certificates indicating their shares in common property making it impossible to legally auction without their consent.