By Harold Ayodo
An increasing number of people are painfully discovering that their dreams of owning a home are turning into nightmares, thanks to an upsurge of conmen who are transacting hundreds of fake property transfer papers. The conmen have become so smooth in their operations and their methods high-tech that it is almost impossible to discern that one is being conned until it is too late, and millions of shillings have been ‘invested’ and lost.
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A fake title deed. Many people can’t tell the difference between authentic and fake title deeds. Photo: Maxwell Agwanda/Standard
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Joyce Mumbi is only one of hundreds of Kenyans and foreigners who have innocently lost their lifetime savings in fraudulent property deals.
"I paid over Sh4 million for a modern house in an up market area near the Central Business District (CBD) before reality struck," Mumbi says. "Later, I discovered I had paid for a house that had been sold to two other buyers who were also planning to occupy it."
During investigations, it emerged that the real owner of the home had charged the property as security for a loan.
"I have tried to get back my money over the past two months but the man who sold me the house is playing hide and seek. I’m now contemplating legal action," Mumbi says. She claims that an official search of the property by her agent at the land registry encouraged her to pay for it.
"Nothing at the registry indicated that the property had been charged as security to acquire a loan," Mumbi says. "The titles of the property had the name of the seller and not the other two buyers who claim to have paid for it. It is only after I read an exclusive story in The Sunday Standard on property fraudsters in up-market areas that I began to suspect I had been duped."
Two of Mumbi’s friends have also fallen victim to a similar scam. The estate agents who introduced them to the sellers have absolved themselves from liability even though they earned commissions from the sale.
"They claim that they conducted official searches on the property as required by law," Mumbi says.
Today, hundreds of prospective homeowners are walking a tight rope. Recently, Lands Minister James Orengo cautioned Kenyans that fake titles are circulating in the country.
"Fake titles and other land documents are in circulation and are being held as genuine documents in our offices countrywide," he says.
Certified search certificate
Property lawyers say prospective homeowners could be purchasing property that have either been charged or mortgaged. Reports of missing files and maps are still common even after the Ministry of Lands recently admitted it was experiencing difficulties in establishing authentic title deeds.
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Orengo says fake titles have purportedly been registered not only at Ardhi House but in land registries in Kisumu, Eldoret, Kitale, Nyahururu, Nanyuki, Thika and Kwale.
Law Society of Kenya (LSK) vice chairman James Mwamu says official searches at the land registries are the best way to know whether a property is charged or mortgaged. "A prospective buyer of a property will then be able to determine whether the land or property owner has charged the property," Mwamu says. "Always obtain a true copy of the register to ascertain the history of the property."
Official searches at the Land Registry cost a paltry Sh100, yet hundreds of property investors fail to conduct this important activity to verify the validity of the property, consequently losing millions of shillings to fraudsters.
"Official searches are the best stop gap measure against fraudsters if the documents at land registries countrywide are authentic," says Cleveland Ayayo, a seasoned conveyancer (property lawyer). "A certified search certificate has a legal validity of 14 days for purposes of the transaction."
Legal experts are appealing to banks to protect their investments by hiring investigators who will guide prospective buyers of the true status of a property.
"Banks should hire reputable valuers and investigators to prevent questionable deals," Mwamu, who is also the secretary general of the East African Law Society (EALS), says. "Buyers should not risk paying the 10 per cent deposit of the purchase price without doing a proper search and confirming charges with the bank."
Buying a map of the property is another overriding prerequisite as it confirms whether the property exists in the survey records. Property investors should never overlook this step.
A surveyor must also be involved to confirm the exact location of the property and ascertain whether the acreage on the ground confirms what is stated in the title.
"There are cases where people purchase homes on a smaller piece of land than what is on the official government documents," Mwamu warns. "It is also worth checking with the Ministry of Roads and Public Works whether the property stands on a road reserve."
Ayayo says an official search certificate signed by the Land Registrar shows whether a property is charged. "The official document issued after a search shows the name and address of the proprietor and whether there is a charge on the property or not," he says.
In addition, official searches bear information on the amount of money borrowed from the bank or financial institution. However, buying property that has been used to secure a loan does not make conveyance impossible.
"The transaction can proceed with the consent of the bank or the financial institution that issued the loan," Mwamu advises. "In such a case, the bank or financial institution will consent to an agreement with the third party and issue the title of the property to the new buyer on completion of payment."
Draft land policy
The chairman of the Institute of Surveyors of Kenya (ISK), Mwenda Makathimo, says problems bordering on fraud are manifestations of structural inadequacies.
"There must be a properly structured and well guided process of governance and land related resources," Makathimo says. "The solution to this problem is to have a comprehensive national policy that establishes legitimate institutions governing access and utilisation of property. There is no policy on land and the contradicting statutes on property could be the undoing of the sub-sector."
Orengo says the Cabinet is studying a draft Land Policy that is expected to rein in on fraudsters. The policy seeks to re-organise and strengthen surveying and mapping systems, adjudication, registration and land markets.
Lands Permanent Secretary Dorothy Angote says the Ministry has applied for more funds from Treasury to improve service delivery. "The reforms we want to put in place to curb the menace were not factored in the last budget, which makes it hard to get money midway the financial year," she says.
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