Background
On 28 December 2020, the Sectional Properties Act, 1987 was repealed and replaced with the Sectional Properties Act, 2020 (the New Act) which now aligns with the Constitution, 2010 and the 2012 Land Laws. Further, The Ministry of Lands and Physical planning issued a public notice on 10th May 2021 indicating that the Land’s Registry shall no longer register long-terms leases supported by architectural drawings at the Registry of Documents with effect from 10th May 2021 as that system is being phased out.
The New Act addresses the division of buildings with shared common areas into sectional units to be owned by individual owners and the common property owned by owners of the units as tenants in common. It therefore applies to properties such as flats, maisonettes, townhouses or offices where there is an intention to confer ownership on different persons while sharing the common areas.
The New Act defines a sectional unit as a space that is situated within a building and described by reference to floors, walls and ceilings within buildings and the concept of sectional properties entails a sectional unit together with a distinct share of the common area.
Individual unit owners will now have individual titles for their respective units with the attendant absolute rights and vesting in them the reversionary interest thereto
Key Features of the New Act
The New Act now aligns with the Constitution of Kenya, 2010 and the revised and consolidated Land Laws of 2012. Some of the salient features of the New Act are:-
- All long-term leases (leases for more than 21 years) intended to confer ownership of apartments, flats, maisonettes, townhouses or offices and which were registered before 28 December 2020 (the Commencement Date of the New Act) must conform to the Act within 2 years from Commencement. If this is not done within the 2-year period, the Registrar shall register a restriction against the title of the parcel to prevent any further dealings on it.
- Unit owners will not incur stamp duty costs upon revision if the requisite Stamp Duty fees was paid when registering their sub-lease.
- The New Act applies in respect of freehold titles and to leasehold titles where the unexpired residue of the term is not less than 21 years.
- Owners of sectional properties will now be issued with a certificate of title for freehold property or certificate of lease for leasehold property.
- The respective titles will include the unit’s proportionate share in the common property.
- The common property will be managed by a corporation incorporated as per the provisions of the New Act, and the corporation will not subject to the Companies Act, 2015.
- All sectional plans (prepared by a surveyor approved by the County Government and the Director of Survey) submitted for registration by the Land Registrar be georeferenced.
- The New Act provides for an internal dispute resolution mechanism through a Dispute Resolution Committee to determine disputes relating to enforcement of by-laws. It further provides for recourse to the Environment and Land Court (ELC) on appeal from the DRC’s decision. Previously, such disputes were referred to the tribunal appointed under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act.
Conclusion
It is incumbent on owners of flats, maisonettes, townhouses or offices to convert their long leases within the stipulated 2-year deadline to avoid a restriction being placed over the property by the Registrar or incurring a fine for non-compliance to the new law. It would be prudent to commence the process at the earliest opportunity.
Please reach out to us (ponyango@aliumlaw.com) should you require specific advise relating to the Sectional Properties Act, 2020.
