No matter how much money you have paid for a piece of land/property, you cannot claim legal ownership until you have its title deed. A title deed is the document that legally and officially binds an owner to a property. It contains details such as the name of the owner, type and size of land or plots/property. Conducting a land search is a crucial part of the buying process as it clears any doubts on the previous ownership. Currently, there are three major title deeds in Kenya namely absolute title, certificate of lease and sectional title.
Absolute title deed
The absolute title deed is what is commonly referred to as the freehold title deed. It gives the owner all the rights to the land/property without restrictions of how to use it. There are no conditions attached to it such as rates or any other payments. A person bearing a freehold/absolute title deed can decide to subdivide the land without changing ownership. In this case, each piece of the subdivided land will get a certificate of title. Land in most parts of the country are under the freehold title deeds.
Certificate of lease
The certificate of lease is also known as a leasehold title deed. It is given to an individual/occupant for a given period after which they are required to renew the ownership. The occupant of the land is called the lessee while the landowner is the lessor. The lessee is subject to annual payments towards the land. These payments are known as land rates. As long as the agreement between the two is in force, the lessee must adhere to the conditions put by the lessor such as the type of development. In the past, lessees could own land for up to 999 years but then the government capped these ownerships to a maximum of 99 years. Other lease durations include 33, 50 and 66 years. Most parcels of land in the county of Nairobi possess the leasehold titles. In addition, plots in major towns that used to be municipalities also operate under the certificate of lease. They remit annual land rates to the relevant county revenue authorities.
Sectional title deed
As the country continues to realize intense rural-urban migration, there is need to build more houses for this population. Some residents like to live in certain areas but land there is either too expensive or limited. Such individuals opt to buy a house within an apartment or flat in the area. Since the individual now fully owns that specific house, they require a legal and official document to confirm the ownership. A sectional title deed is what is issued to such buyers. The county of Nairobi has embraced this form of property of ownership. It is also fast spreading to other cities and major towns in the country.
The table below highlights the main differences between the two most common types of title deeds in Kenya; absolute and leasehold
|Ownership||The owner possess full rights to own the land indefinitely. No renewal fees incurred||The lease duration (33, 50, 66 or 99 years) after which renewal is necessary, determines ownership of this land. Sometimes, the landowner can decline renewal|
|Control of development||The owner with this title deed can develop their land as they please. There is no limit to the type of buildings they can put up||The lessee is restricted as to what type of structures he/she can put up. Some places have limits of the stories a house can rise|
|Financing||One can get financing easily when in possession of freehold title deed||It is difficult to use the certificate of lease to obtain financing due to the conditions attached as well as the lease period|
|Initial cost||May experience higher initial costs but cheaper in the long run since there are no annual rates||Annual rates make the property more expensive|