Unlocking the Power of Sectional Property Rights in Kenya: Off-Plan, Rent-to-Own, and Turnkey Ownership Models

Let’s step into the vibrant realm of sectional property rights in Kenya, where your dream home awaits! Explore the transformative opportunities presented by off-plan developments, innovative rent-to-own arrangements, and seamless turnkey ownership models. These strategies are not just pathways to homeownership; they are empowering solutions tailored to meet the needs of today’s savvy buyers.

Imagine securing your ideal living space while taking advantage of favorable market conditions. By understanding these ownership models, you can make informed decisions that pave the way for financial growth and personal fulfillment.

Don’t miss out on the chance to turn your property aspirations into reality. Join us as we delve deeper into these compelling options and set yourself on the path to owning your future in Kenya’s dynamic real estate landscape!

Introduction

Kenya’s real estate market has rapidly evolved, especially in urban areas where high-rise apartment complexes are replacing traditional detached housing. Buyers are increasingly engaging with alternative acquisition models such as off-plan purchases, rent-to-own schemes, and turnkey ownership.

However, with shared spaces and multiple units under one development, the question arises: Who owns what? Who is responsible for maintenance, costs, or liability? The Sectional Properties Act, 2020, enacted to address this complexity, provides a legal framework for dividing buildings into units with individual ownership and shared responsibilities.

Legal Framework for Sectional Properties in Kenya

Sectional Properties Act, 2020 (SPA)

This legislation permits the division of structures into distinct, individually owned units, while simultaneously designating certain areas as commonly shared spaces shared by all residents.

It replaced the repealed Sectional Properties Act (1987).

Developers are required to register sectional plans with the Survey of Kenya and obtain unit titles at the Lands Registry. This process ensures proper documentation and legal recognition of property developments, facilitating clear ownership and management of units within sectional properties.

Land Registration Act, 2012

The process governing the registration of land interests, including sectional titles, is critical to the real estate landscape. Once a sectional plan receives approval from the relevant authorities and titles are subsequently issued, each apartment or unit within the development is transformed into a legally recognized parcel of land. This formal recognition grants individual owners specific rights and responsibilities associated with their property, including ownership, the ability to sell, lease, or mortgage their unit, and participation in the governance of the communal areas. Additionally, it ensures that all ownership interests are recorded in a public registry, providing clarity and security to property transactions within the sectional title framework.

Law of Contract Act and Consumer Protection Act

To foster trust and integrity in transactions, it is essential to implement robust guidelines for sales agreements that guarantee fair practices. This is particularly crucial for pre-completion sales and long-term payment models like rent-to-own. By prioritizing transparency and equitable treatment for all parties, we can create a more reliable and compelling marketplace that benefits everyone involved.

Other Relevant Laws

Survey Act (for survey requirements and map accuracy)

Building Code and Physical and Land Use Planning Act (development approval, zoning, and compliance)

Understanding Sectional Ownership: Who Owns What

Under the SPA:

Unit Owners: Legally own their respective units.

Each unit is registered as a separate parcel with its title.

Owners hold a proportional undivided share in the common property (e.g., staircases, elevators, roof).

Common Property: Not privately owned but collectively held by all unit owners.

Includes structural elements and shared amenities.

Managed by a corporation or management company formed by the owners.

Developer: Initially owns the property and must surrender the master title for sectionalization.

Once units are sold and sectional titles issued, the developer ceases to hold proprietary interest except in any unsold units.

Off-Plan Buying: Legal Implications and Liabilities

What is Off-Plan Buying?

Acquiring a unit before or during the construction phase, based on architectural designs and developmental projections, presents several strategic advantages. This practice enables developers to generate essential capital for their projects, which is vital for sustaining cash flow and ensuring timely completion. For buyers, this approach allows entering the real estate market at more favorable pricing, often resulting in lower acquisition costs compared to completed or nearly finished units. Moreover, early purchasers may have the benefit of selecting prime locations within the development and potentially customizing specific features to align with their preferences, thereby enhancing the value of their unit upon completion. Consequently, this method can yield significant financial and individual advantages for both developers and buyers alike.

Ownership and Legal Status: The buyer does not own the unit until the title is formally transferred.

Until then, their interest is equitable, not legal.

The developer must ensure registration of the sectional plan and transfer the unit title after completion.

Legal Protections: Must involve a written sale agreement, per the Law of Contract Act.

Sale agreements should specify:

  • Completion timelines
  • Remedies for delays or failure
  • Payment structure (often via escrow or installments)

The Law Society’s Conditions of Sale (2015 edition) often guide these transactions.

Developer’s Liability: Must deliver the unit as per specifications.

The developer is required to obtain occupation and compliance certificates.

They also remain responsible for defects during the defect liability period (often 6–12 months post-completion).

The developer must hand over management to the owners after a majority of units are sold or upon completion.

Rent-to-Own Arrangements

This model blends rental and ownership features, allowing tenants to contribute a portion of their monthly rent toward the future purchase price of the property. This approach provides a pathway for tenants to eventually own their home while enjoying the benefits of living in it as they rent.

Legal Status: The buyer remains a tenant until full payment is made and the title is transferred.

A rent-to-own agreement should be clear on:

  • Duration of tenancy
  • Allocation of rent toward purchase
  • Default consequences
  • Right to cancel or refund

Risks and Protections: If the unit is not yet sectionalized, there may be challenges in registration. The buyer may lose their investment if the project collapses.

A registered agreement (ideally under the Registration of Documents Act) provides stronger protection.

Liability: The tenant is liable for routine maintenance.

The owner/developer retains responsibility for structural and capital repairs until full transfer.

Turnkey Ownership

The buyer secures an impeccably completed and fully finished unit, expertly crafted for immediate occupancy. This residence features high-end finishes, state-of-the-art appliances, and an inviting layout that guarantees a superior living experience from the moment you step inside. With all essential utilities expertly connected and all inspections completed, you can enjoy a hassle-free move-in, allowing you to relish your new home without any delays or additional work required. Experience the epitome of comfort and convenience in a space designed just for you.

Legal Transfer: Once full payment is made, the buyer receives a registered sectional title.

Title registration under the Land Registration Act completes the transfer of ownership.

Responsibilities: The owner becomes responsible for:

  • Internal maintenance of the unit.
  • Payment of service charges and contributions to sinking funds.
  • Participation in owners’ meetings and voting on management issues.

Developer’s Obligations:

  • Must ensure the building is compliant, safe, and has all necessary approvals.
  • Should hand over the common areas to the management entity.
  • Must cease involvement in management unless they retain a minority of units.
Common Property Management and Liability

Owners’ Corporation or Management Company is formed under Section 17 of the SPA, and comprises all unit owners. This management company is legally responsible for:

  • Managing shared spaces
  • Enforcing rules/by-laws
  • Hiring service providers (security, cleaning, etc.)
  • Collecting service charges, i.e., Monthly costs for utilities and services.
  • Establishing a sinking fund to cater for long-term capital repairs (e.g., roof, lifts).
  • Seek appropriate Insurance. Section 20 of the SPA provides that the corporation must insure the building, while Unit owners insure interior contents.

Dispute Resolution: Minor disputes are handled internally or through the Corporation’s by-laws. Larger disputes may be adjudicated in the following forums:

  • The Environment and Land Court
  • Rent Tribunal (for protected tenancy matters)
  • Alternative Dispute Resolution mechanisms (arbitration, mediation)
The following is a checklist for Buyers and/or investors:
  1. Conduct Legal Due Diligence: Confirm the developer’s ownership of the land.
  2. Verify that a sectional plan has been or will be registered.
  3. Check project approvals and compliance.
  4. Understand the Agreement Terms: If you don’t understand, seek clarification; never sign anything unless it’s clear.
  5. Off-plan buyers: Protect your interests in case of delays.
  6. Rent-to-own buyers: Know your rights and when ownership vests.
  7. Turnkey buyers: Confirm that the title transfer is prompt.
  8. Demand Professional Representation: Engage a licensed conveyancing advocate.
  9. Insist on documentation such as:
      • Sale agreement
      • Title documentsArchitectural plans
      • Compliance certificates
      • Participate in Management: Join the owners’ association, attend AGMs, vote on budgets, and demand financial transparency.
Conclusion

As Kenya’s housing sector becomes more sophisticated, understanding sectional property rights is essential for both homebuyers and investors. Whether you’re purchasing off-plan, entering a rent-to-own agreement, or acquiring a turnkey property, the Sectional Properties Act, 2020, provides a strong legal foundation to safeguard your rights, provided it is correctly applied.

Your Property Journey Deserves Solid Ground—Let’s Walk It Together

Navigating the world of sectional property ownership—whether off-plan, rent-to-own, or turnkey—demands more than just enthusiasm and brochures. It requires sharp legal insight, meticulous due diligence, and a trusted advisor who understands the terrain of Kenya’s evolving land laws.

At D. Otunga & Associates, we specialize in real estate and conveyancing law, guiding buyers, investors, and developers with clarity and confidence. From contract drafting and title verification to compliance checks and sectional registration, we handle the legal heavy lifting—so you can focus on your investment.

So, whether you’re just breaking ground or finalizing a purchase, remember:

👉 You’ve landed at the right place!!

Contact us today, and let’s lay the legal foundation for your next property move—brick by brick, clause by clause.

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