Sectional properties have gained significant traction in Kenya's real estate sector due to their efficient use of space and appeal to urban dwellers. These properties, commonly found in apartment complexes and mixed-use developments, offer a unique ownership structure that combines individual ownership with shared interests in common areas.
This article provides a detailed overview of sectional properties in Kenya, focusing on the registration process, legal considerations, and practical steps for prospective owners.
What are Sectional Properties?
Sectional properties, often referred to as "strata properties" or "condominiums," involve a form of property ownership where individuals own a specific section of a building (such as an apartment) while jointly owning common areas with other property owners. This ownership model is particularly popular in high-density urban areas where space is at a premium.
Key Features of Sectional Properties
Individual Ownership: Owners hold title to a specific unit or section of the property.
Common Areas: All owners share ownership of common areas such as hallways, gardens, and recreational facilities.
Management Structure: A management committee or homeowners' association (HOA) oversees the maintenance and administration of common areas.
Legal Framework Governing Sectional Properties
In Kenya, sectional properties are regulated under the Sectional Properties Act, 2020, which provides a comprehensive legal framework for the creation, registration, and management of sectional properties. This legislation repealed the Sectional Properties Act of 1987.
Key Provisions of the Act
Preparation and Registration of Sectional Plans and Units
The Act provides for the sub-division of buildings into units. It stipulates the requirements of sectional plans, boundaries of sectional units, and the process for the sub-division of a unit. It also provides for the conversion of units via formal registration of geo-referenced long-term sub-leases according to the provisions of the Land Registration Act.
Establishment of the Corporation
The Act establishes a Corporation to manage the common property. The Corporation has certain duties and powers, including dealing with the common property, convening meetings, and enforcing by-laws.
Provisions Relating to Residential Units
The Act provides for the sale, management, and renting of units. It also stipulates the procedure for giving up possession.
Step-by-Step Process for Registering Sectional Properties
Step 1: Preparation and Documentation
Draft a Sectional Plan: Engage a registered surveyor to prepare a sectional plan of the property, which includes detailed diagrams showing the boundaries of individual sections and common areas.
Create a Declaration of Condominium: Prepare a declaration that outlines the ownership structure, rights, and responsibilities of individual owners, and the management of common areas.
Develop Bylaws: Draft bylaws that govern the operation and management of the sectional property, including rules for maintenance, usage of common areas, and dispute resolution procedures.
Step 2: Obtain Necessary Approvals
Consult with Local Authorities: Ensure that the sectional plan and bylaws comply with local zoning and building regulations. Obtain any necessary approvals or permits from municipal or county authorities.
Secure Consent from Property Owners: If the property is already occupied, obtain written consent from existing owners to proceed with the registration.
Step 3: Submit Application for Registration
Prepare Registration Documents: Compile the following documents for submission to the Registrar of Titles:
The sectional plan, certified by a registered surveyor.
The by laws for the management of the property.
Proof of ownership or a title deed for the property.
Consent from existing property owners (if applicable).
File Application with the Registrar: Submit the completed application and supporting documents to the Registrar of Titles at the relevant land registry office. Pay the required registration fees.
Step 4: Registrar’s Review and Approval
Review Process: The Registrar will review the submitted documents to ensure they comply with the Sectional Properties Act and other relevant regulations.
Approval and Registration: Upon approval, the Registrar will register the sectional property and issue a certificate of registration, which includes details of individual ownership sections and common areas.
Step 5: Establish Management Committee or HOA
Form a Management Committee: Establish a management committee or HOA to oversee the administration and maintenance of common areas. This committee is typically elected by property owners and is responsible for enforcing bylaws and managing communal services.
Register the Management Committee: Register the management committee with the relevant authorities if required, and ensure it operates in accordance with the by laws.
Step 6: Issuance of Title Deeds
New title deeds are issued for each sectional unit. The original register is closed, and new registers are opened for each unit.
Owners will not incur additional stamp duty if they paid the requisite fees during the registration of long-term leases.
Benefits of Sectional Property Ownership
For Property Owners
Efficient Space Utilization: Sectional properties make efficient use of space, particularly in urban areas with high population density.
Shared Maintenance Costs: The management corporation ensures that maintenance costs for common areas are shared among all unit owners, reducing the financial burden on individual owner.
Enhanced Security: Many sectional properties offer enhanced security features such as gated access and surveillance systems.
Individual Ownership: Each unit owner holds a separate title deed, providing security of tenure and the ability to sell or mortgage the unit independently.
Enhanced Property Value: Proper management and maintenance of common areas can enhance the overall value of the property.
For Investors
Attractive Returns: Sectional properties can offer attractive rental yields and capital appreciation, making them appealing investments.
Market Demand: High demand for urban living spaces ensures a steady market for sectional properties.
Challenges and Considerations
Legal and Compliance Issues
Complex Registration Process: Navigating the registration process can be complex, requiring careful attention to legal and regulatory requirements.
Dispute Management: Effective management and resolution of disputes among property owners are crucial for maintaining harmony in sectional properties.
Management and Maintenance
Effective Governance: Ensuring that the management committee operates effectively and transparently is essential for smooth property administration.
Maintenance Costs: Regular maintenance of common areas requires adequate budgeting and financial planning.
Impact of the Act
The new law seeks to streamline it with the provisions of the 2010 Constitution, the Land Act No. 6 of 2012, and the Land Registration Act No. 3 of 2012. Most amendments also seek to simplify the various procedures that were contemplated under the repealed law.
The Act incorporates ad-hoc dispute resolution committees by companies managing sectional properties. The assessment of rates will now be done considering each of the units as a separate piece of land.
Conclusion
Sectional properties offer a unique and efficient form of property ownership in Kenya, particularly suited to urban environments. Understanding the legal framework and following the detailed registration process outlined in the Sectional Properties Act, 2020, is crucial for successful ownership and management.
Whether you are an individual looking to buy a sectional property or an investor seeking opportunities in the real estate market, being well-informed about the registration process and legal requirements will help you navigate the complexities of sectional property ownership.
For expert advice and assistance with sectional property registration and management, contact our law firm. Our team of legal professionals is dedicated to providing comprehensive support and guidance to ensure your sectional property transactions are smooth and compliant with all regulations.
To explore this further see the Sectional Properties Act, No. 21 of 2020.
