5. LAND ASSEMBLY, LAND ACQUISITION, TITLE AND REGISTRATION OF TENURE
This section ventures to analyze the individual laws and policies in the land assembly and registration value chain, identifying gaps and proposing recommendations.
Prior to 2012, the legal framework governing land was overly cumbersome and complex, with five different regimes for dealing in land viz: Registered Land Act, Registration of Titles Act, Government Lands Act, Land Titles Act and the Indian Transfer of Property Act. Pursuant to the 2010 Constitution and the enactment of new land laws in 2012, these multiple legal regimes were consolidated into the Land Act of 2012 (substantive law) and the Land Registration Act of 2012 (procedural law) thus simplifying the legal regime. Both 2012 laws cover all transactions on land, excluding community land, which is governed by the Community Land Act 2016 and Community Land Regulations 2017. The recognition of Community Land is an important step forward for Kenya which has large land parcels constituting over 60% of total land mass in the country. However, there is limited registration/titling of land under this Act at present.
Transacting in land continues to face challenges due to the various government departments involved and the room for rent-seeking behaviour. There has been an effort to digitize land transactions with the launch of Ardhi Sasa in April 2021. This is a critical step forward, however, the platform has faced teething problems and is not fully operational. Limited titles in Nairobi have been digitized and the transfer of titles has stalled, as a result.
In addition, while the legislation allows for measures to leverage land values for development via effective land banking, idle land taxation, minimum and maximum acreages to be held, and others, these measures have not been enforced.
This component of the Housing Value Chain assesses Kenyaâs laws/policies/regulations in the land assembly/acquisition and titling processes with a view to identifying progress, challenges and potential areas of improvement in the policy, legal and regulatory regime. This is important given the central place of land in the entire housing value chain, as land constitutes the key site on which human settlements are built.
The following laws/policies/regulations in the Land Assembly/Titling Component were reviewed in this study. These are summarized in Annex B with links to their source for further reference.
Land Act, No. 6 of 2012 (substantive law on land)
Land Registration Act, No. 3 of 2012 (provides for registration processes including all dealings in land such as charges, leases and transfers)
Community Land Act 2016 which provides for the management and registration of community land
National Land Commission Act 2012 which provides for the structure and functions of the Commission.
Survey Manual, 1961
Idle Land Taxation Policy 2018 (only reported to have been developed â but not available for viewing)
The Draft Land Sector Gender Policyâ (not available for viewing);
Draft Kenya National Spatial Data Infrastructure Policy (not available for viewing);
Overall, the legal and policy framework with respect to land is complex, notwithstanding the consolidating efforts of the Land Act in 2012. This is further complicated by the fact that some legislation has not been operationalized with regulations. A significant constraint is that it fails to engage productively with the notion of land value, and the impact this has on land use choices and affordable housing.
Key gaps in the land assembly and titling value chain that need attention are:
GAP
RECOMMENDATION
There are no policy instruments or frameworks in place that address issues of gender in land, spatial data, land surveying and mapping. While draft policies are in place, these need to be finalized. Efforts to map geospatial data are hindered by limited resources and capacity, and uncoordinated efforts between different players.
The Land Sector Gender Policy; Kenya National Spatial Data Infrastructure Policy; and the National Land Surveying and Mapping Policy all exist but need to be finalized and operationalized.
The current regulatory framework for land is silent on value. As a result, land values can be distorted by speculative landholders seeking to maximize their advantage. Both the 2010 Constitution and the 2009 National Land policy call for the governance of minimum and maximum acreages of private land, but this has not been developed. While a draft Idle Land Taxation Policy has been developed, it is not yet finalised.
A detailed review of land values and property price dynamics, and measures to leverage these in support of affordable housing (and other developmental objectives) is needed, given the competing pressures, especially in urban areas. From this, it will be possible to consider the development of a land banking policy, a law on minimum and maximum acreages of private land and guidelines/regulations on penalties for compliance, and the appropriate parameters for an Idle Land Taxation Policy.
Policies/laws requiring review or amendment
·Sessional Paper No. 3 of 2009 on National Land Policy
STATUS / ISSUE
RECOMMENDATION
The 2009 National Land Policy is outdated and due for review. The National Land Commission (âNLCâ) developed the Recommended National Land Policy 2023. The Recommended National Land Policy 2023 amends the 2009 National Land Policy to align it with the 2010 Constitution of Kenya and introduces new thematic areas such as land information management, natural resources, environment and conservation, investment and climate change.
Fast-tracking the adoption of the Recommendations on Kenya National Land Policy 2023 which has important implications on affordable housing given its impact on the availability and price of land.
STATUS / ISSUE
RECOMMENDATION
Rising land prices are undermining housing affordability in several areas. Section 107A of the Land Act provides for land value indexes, but these have not been developed in many areas.
The recommended review of Kenyan land values and property price dynamics will create the basis for supporting the development of regulations towards the creation of a national land value index throughout the country. It was reported that the Ministry of Lands is finalizing the National Land Value Index. This process has been quite slow and it should be fast-tracked to standardize and harmonize value of land across the country.
Sections 90 and 96 of the Land Act set out the foreclosure process (power by lenders to exercise statutory power of sale). This process is inordinately long and cumbersome (foreclosure takes a minimum of 6 months) thus restricting lenders from recovering their monies upon defaults, and thereby militating against lending, especially to what are perceived as higher-risk clients.
A full review of the impact of the Land Act and its provisions on the practice of mortgage lending, especially to low-income earners, is necessary. This review should engage lenders on how they manage the risk of foreclosure and seek to simplify and shorten the processes involved.
Section 105 of the Land Act gives courts the power to reopen and rewrite charges relating to matrimonial property, and to provide relief to borrowers based on extraneous factors. This interferes with the sanctity of contracts (freedom of contract) and disincentivizes lending.
A full review of the impact of the Land Act 2012 and its provisions on the practice of mortgage lending, especially to low-income earners, is necessary. This review should reconsider the power given to courts to reopen and rewrite charges relating to matrimonial property and to provide relief to borrowers, so that access to finance is not undermined.
Land Registration Act No. 3 of 2012
Land (Registration Units) Order 2017).
National Land Information Management System/ArdhiSasa platform
STATUS / ISSUE
RECOMMENDATION
Section 6 of the Land Registration Act and the Land (Registration Units) Order 2017 set into motion a new registration regime, involving the digitization and migration of title to the new system. At the same time, a moratorium on dealings / transactions on land not yet migrated has been put in place. As the title digitization process has been delayed, all land transactions have been stalled. This has had a particular impact on the availability of finance.
The land title conversion process must be expedited. At the same time, there is a need to deal with the low/lack of confidence among landowners who are sceptical and wary of the title conversion process and reluctant to apply for title conversions.
The Act presumes the development of guidelines/procedures by the Survey Office to inform the issuance of a unique prefix number to support geo-referencing of sectional units. These have not yet been forthcoming, and the deadline was December 2022.
Provide the required guidelines/procedures to support geo-referencing and title migration.
In keeping with the lawâs requirement for an electronic land information system, Ardhi Sasa was launched in April 2021. The platform suffers, however, from incomplete digitization, missing records, difficulties in users obtaining consent, and the first in first out principle not being adhered to, making it non-functional.
A review of the intentions, form and function of Ardhi Sasa is needed to address the gaps and ensure it delivers what was envisioned. With the implementation of a digital landsâ registry regime, this review and renovation of Ardhi Sasa is particularly urgent. The review should incorporate views from all key stakeholders including the Ministry of Lands, National Land Commission and County Governments professional bodies such as LSK, and Surveyors.
STATUS / ISSUE
RECOMMENDATION
The Sectional Properties Act and its accompanying regulations provide for the conversion of long-term leases to sectional titles. The timelines set for this to occur, however, are unfeasible and impractical. The implication of not meeting the deadline is that there may be a legal crisis or stalling of transactions.
The Sectional Properties Act should be amended to extend the current statutory timeline of 2 years for title conversion. There have been implementation challenges affecting compliance with the requirements of geo-referencing which is a pre-requisite for conversion of long-term leases to sectional titles. In August 2023, the State Department for Lands & Physical Planning, the Law Society of Kenya, the Institution of Surveyors of Kenya and the Kenya Bankers Association issued a joint memorandum on transitional measures to allow for the registration of long-term leases or transactions dealing with long-term leases while undertaking geo-referencing.
The Regulations exempts from the requirement for conversion to sectional units, long term leases relating to projects of strategic national importance and substantial transactions and where it is expressly provided that the reversionary interest belongs to the developer or lessor or management company as legal owner and not trustee. There is no clarity as to what constitutes substantial transactions. There is also no clear definition of who a âtrsuteeâ is.
Review the Regulations to provide the necessary clarity.
Absence of a procedure in the Sectional Properties Act or the Regulations applying for exemptions from converting long term leases to sectional titles.
Provide guidelines or procedures for applying for exemptions
No clarity in the exemptions on what is meant by âmixed use developmentâ in terms of minimum acreage and diversity.
Review the Regulations to provide the needed clarity.
STATUS / ISSUE
RECOMMENDATION
Kenyaâs survey laws/policies are old and outdated. For instance, the methods and approaches stipulated in the existing Survey Manual have been overtaken by significant advancement in technology.
There is an opportunity to improve surveying capacity with currently available and deployed digital solutions both for relevance and efficiency. This should be pursued.
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