Hi, How Can We Help You?

Sectional Properties Bill

Sectional Properties Bill

    On Thursday, 21st February 2019, the Cabinet Chaired by H.E President Uhuru Kenyatta held a meeting at State House. The Cabinet discussed and approved The Sectional Properties Bill 2018.

    The Bill if enacted, will repeal the current law, The Sectional Properties Act, 1987.

    According to the government, the proposition of the Bill is necessitated by the fact that the current law, The Sectional Properties Act, 1987, is not responsive to emerging market needs such as the growing demand for affordable housing, mixed-use and master planned communities as well as efficient mortgage transactions.

    Among other things, the Bill seeks to;

    1. Simplify the registration of sectional properties by owners. The Bill vests reversionary interest on individual unit owners hence guaranteeing the rights of property owners by conferring absolute rights to them.
      Under the current law, reversionary interest is vested on Corporations and management companies in which the individual unit owners form part of the membership. Conferring the reversionary interest on the end purchasers as opposed to the management companies and corporations will serve to expedite the process of applying for and processing the extension and renewal of their respective leases without applying through the Corporations and management companies.

    2. Enhance revenue collection. According to the Bill, "....each unit will be assessed separately for purposes of payment of ground rent and rates". This means individual unit owners will be personally liable for direct payment of both ground rent and rates to the government and the County governments, respectively.
      Currently, rates and rent are payable by individual unit holders as service charge paid to the corporations and management companies and the same are apportioned among all other unit holders. Individual assessment and payment will make it easy for both the Ministry of Lands and KRA to follow up on defaulting unit holders and by this way, revenue collection will be enhanced.

    3. Provide for the closure of the mother title or head lease to prevent mischief by property developers who seek to hold on to ownership arbitrarily even after selling off the units to end purchasers. This will have the effect of vesting absolute rights on the individual unit owners as they can then deal in the property only in such manner as they wish to as opposed to being at the mercy of developers.

    The Bill will be forwarded to the Office of the Attorney General for Publication after which it will be sent to Parliament for enactment.
    The Bill if enacted will modernize ownership of sectional properties in Kenya.

    For further assistance please contact CM Advocates LLP, at cmaina@cmadvocates.com.