The new law also allows owners of such properties to use the documents for financial transactions, such as using them as security for loans
Apartment and sectional property developers have until December to comply with a new rule that allows buyers of such assets to obtain individual ownership documents.
The Sectional Properties Act, whose regulations were approved by Parliament in December, includes a number of changes, including the ability for Kenyans who acquired single units in apartment buildings to get a legal ownership paper, often known as title deeds. There was no law that allowed this before.
The new law also allows owners of such properties to use the documents for financial transactions, such as using them as security for loans—an incentive for banks and financiers to offer credit facilities to individual unit owners because they can now charge the individual units directly without the developer's or manager's consent.
Furthermore, the new law cut the leasehold period from 45 years to 21 years under the repealed law.
Farida Karoney, Cabinet Secretary for Lands, stated that property developers and experts, such as surveyors and lawyers, have until December to comply.
"Due to the short time frame, we have agreed that any new development of apartments and sectional units must conform with the Sectional Properties Act."
“For developments that are finished but some of the units have been registered under long-term leases, we are allowing you to finish registration of the rest of the units under the old regime and then you can convert later,” Ms Karoney told Sunday Nation in an interview.
The CS stated that the ministry will allow transactions on properties registered under the old regime until December as their owners transitioned to the new rules.
"If you want to charge your apartment and have not converted to the SPA, 2020, we can allow you to do so with consultation with the chief land registrar based on whatever transaction you choose to do." The moratorium, however, expires in December since we must all convert to the Sectional Properties Act, 2020 by December 2022."
The state launched the issuance of sectional title deeds in February, with the Lands ministry estimating that 10,000 sectional title deeds would be issued in Nairobi.
“We have started with structured buildings like the NSSF-owned properties in Nyayo Embakasi. We want to start with the apartments that are easy to do to see how it plays out in the system. So far, we have had 10 successful transactions,” Ms Karoney said in March.
The new law also states that all long-term sub-lease agreements intended to confer ownership on a maisonette, apartment, flat, townhouse, or office that were registered prior to the new law must be reviewed to ensure that they comply with Section 54(5) of the Land Registration Act, a provision that aids in the transition of all buildings to sectional status and guarantees the absolute rights of the owners of such units to deal with the same without being subject to the power and direction of the developer.
On Tuesday, the ministry met with members of the Kenya Law Society and the Kenya Institute of Surveyors to discuss transitional concerns that have arisen for owners and professionals dealing with sectional properties.
"A combined team representing the ISK, LSK, and the ministry will be formed to further address technical concerns connected to long-term leases," the ministry and the two organisations declared in a joint communiqué.