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Centre for Affordable Housing Finance in Africa
  • LEGAL, POLICY AND INSTITUTIONAL REVIEW OF THE AFFORDABLE HOUSING SECTOR IN KENYA
  • QUICK LINKS TO SEARCH FOR THE SOURCE REGULATORY DOCUMENTS
  • BILLS SCHEDULE
  • NEW DEVELOPMENTS
  • PLEASE SHARE YOUR COMMENTS & FEEDBACK
  • 1. SUMMARY of RECOMMENDATIONS
    • High Level Findings / Recommendations
    • Overall Policy & Regulatory Framework Recommendations
    • Land assembly, land acquisition, title, and registration of land tenure
    • Physical Planning
    • Construction and Maintenance
    • Financing (investment, rental, taxation)
  • 2. HOUSING VALUE CHAIN
    • i. Land assembly, Land Acquisition, Title and Registration of Land Tenure
    • ii. Physical Planning
    • iii. Construction and Maintenance
    • iv. Financing (investment, rental, taxation)
  • 3. INSTITUTIONS INVOLVED IN REGULATION OF HOUSING
    • i. Key National Government Ministries
    • ii. Secondary National Government Ministries
    • iii. County Governments
    • iv. Judiciary
    • v. Professional regulatory and advocacy bodies
  • 4. OVERARCHING POLICIES AND CONTEXT
  • 5. LAND ASSEMBLY, LAND ACQUISITION, TITLE AND REGISTRATION OF TENURE
  • 6. PHYSICAL PLANNING
  • 7. CONSTRUCTION AND MAINTENANCE
  • 8. HOUSING INVESTMENT, FINANCE & TAXATION
    • 8.1 Capital Markets and Wholesale Finance (Equity and Debt)
    • 8.2 Retail Finance
    • 8.3 Financial regulation of rental markets
    • 8.4 Taxation
  • ANNEX A: LAWS / POLICIES / REGULATIONS GOVERNING THE BREADTH OF THE HOUSING VALUE CHAIN
    • 1. Constitution of Kenya 2010
    • 2. Housing Act, 1953 Cap 117 (Revised in 2012)
    • 3. Housing Bill, 2021
    • 4. Sessional Paper No. 3 of 2016 on National Housing Policy
    • 5. Affordable Housing Act 2024
    • 6. Draft Affordable Housing Regulations, 2024
    • 7. The Economic and Social Rights Bill 2022
  • ANNEX B: LAWS / POLICIES / REGULATIONS GOVERNING LAND ASSEMBLY / ACQUISITION / TITLE / TENURE
    • 1. Land Act, No. 6 of 2012
    • 2. Land Registration Act, No. 3 of 2012
    • 3. Idle Land Taxation Policy 2018
    • 4. Community Land Act. No. 27 of 2016
    • 5. Sessional Paper No. 3 of 2009, the National Land Policy
    • 6. National Land Commission Act, No. 5 of 2012
    • 7. National Land Commission (Investigation of Historical Land Injustices) Regulations, 2017
    • 8. National Land Commission (Amendment) Bill, 2023
    • 9. Land Control Act (Cap 302), 1967
    • 10. Land Control Bill, 2023
    • 11. Environment and Land Court Act No. 19 of 2011
    • 12. Survey Act No. 25 of 1961 (Cap 299)
    • 13. Land Registration (General) Regulations, 2017
    • 14. Land Registration (Registration Units) Order, 2017
    • 15. Sectional Properties Act, No. 21 of 2020
    • 16. Land (Amendment) Bill 2022
  • ANNEX C: LAWS / POLICIES / REGULATIONS GOVERNING PHYSICAL PLANNING
    • 1. Sessional Paper No. 1 of 2017 on National Land Use Policy
    • 2. National Land Use Policy Implementation Monitoring and Oversight Tool 2022
    • 3. Kenya National Spatial Plan (2015-2045)
    • 4. Physical and Land Use Planning Act, No. 13 of 2019
    • 5. Physical and Land use Planning (Planning fees), Regulation 2021
    • 6. County Spatial Planning Guidelines, 2018
    • 7. Nairobi City Development Ordinances and Zones Guidelines 2004
    • 8. Nairobi Integrated Urban Development Master Plan (2014-2030)
    • 9. Physical Planning Handbook 2008
    • 10. Sessional Paper No. 10 of 2014 on The National Environment Policy
    • 11. Urban Areas and Cities Act, No. 13 of 2011
    • 12. Physical Planners Registration Act, No. 3 of 1996
    • 13. Export Processing Zones Act, 1990 (Cap 517)
    • 14. Investment Promotion Act, No. 6 of 2004
    • 15. Special Economic Zones Act, No. 16 of 2015
    • 16. Nairobi City County Regularization of Development Act No. 3 of 2015
    • 17. Nairobi City County Community and Neighbourhood Associations Engagement No. 4 of 2016
    • 18. Sectional Properties Regulations, 2021
    • 19. Nairobi City County Development Control Policy
  • ANNEX D: LAWS GOVERNING CONSTRUCTION AND MAINTENANCE
    • 1.Local Government (Adoptive ByLaws) Building Order, 1968 and The Local Government (Adoptive By-Laws
    • 2. National Building Code, 2024
    • 3. National Construction Authority Act, No. 41 of 2011
    • 4. National Construction Authority Regulations, 2014
    • 5. NCA Code of Conduct for the Construction Industry, 2020
    • 6. National Construction Authority (Defects Liability) Regulations, 2020
    • 7. Standards Act, 1974 (Cap 496)
    • 8. Buy Kenya-Build Kenya Strategy 2017
    • 9. Sessional Paper No. 1 of 2013 National Building Maintenance Policy for Kenya
    • 10. National Risk Disaster Management Bill 2023
    • 11. Kenya National Climate Change Response Strategy 2010
    • 12. Sustainable Waste Management Act 2022
    • 13. Forest Conservation and Management Act, No. 34 of 2016
    • 14. Forests (Harvesting) Rules, 2009
    • 15. Public Health Act, 1921 (Cap 242)
    • 16. Public Health (Drainage and Latrine) Rules, 1948
    • 17. Mining Act, No. 12 of 2016
    • 18. Persons with Disabilities Act, No. 14 of 2003
    • 19. The Climate Change (Amendment) Act, 2023
    • 20. Water Act No. 43 of 2016
    • 21. Environmental Management and Coordination Act, No. 8 of 1999
    • 22. Environmental (Impact Assessment and Audit) Regulations, 2003
    • 23. Environmental Management and Co-ordination (Water Quality) Regulations, 2006
    • 24. Environmental Management and Coordination (Noise and Excessive Vibration Pollution) (Control) Re
    • 25. Energy Act No. 1 of 2019
    • 26. Proposed Climate Change (Green & Resilient Buildings) Regulations 2023
    • 27. The National Construction Authority (Amendment) Bill 2022
    • 28. The Water (Amendment) Bill, 2023
    • 29. Persons with Disabilities Bill, 2023
    • Case Law
  • ANNEX E: LAWS AND POLICIES RELATING TO PROFESSIONALS IN HOUSING
    • 1. Architect and Quantity Surveyor Act, 1933 (Cap 525)
    • 2. Architects and Quantity Surveyors By-Laws, 1959
    • 3. Competition Act, No. 12 of 2010
    • 4. Engineers Act, No. 43 of 2011
    • 5. Engineering Rules, 2019
    • 6. Engineers (Scale of Fees for Professional Engineering Services) Rules, 2022
    • 7. Engineering Technology Act, No. 23 of 2016
    • 8. Valuers Act, 1985 (Cap 532)
    • 9. The Construction Project Managers and Construction Managers Bill 2023
    • 10. The Real Estate Management Bill 2023
    • 11. The Physical and Land Use Planning (Outsourcing of Professional Services) Regulations, 2021
    • 12. The Valuers Bill, 2022
  • ANNEX F: LAWS GOVERNING FINANCING / RENTAL / TAXATION
    • 1. Retirement Benefits Act, No. 3 of 1997
    • 2. Building Societies Act, 1956 (Cap 489)
    • 3. Banking Act, 1989 (Cap 488)
    • 4. Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations, 2013
    • 5. Central Bank of Kenya Act 1966 (Cap 491)
    • 6. Estate Agents Act, 1984 (Cap 533)
    • 7. Sacco Societies Act, No. 14 of 2008
    • 8. Sacco Societies (Deposit-Taking Sacco Business) Regulations 2010
    • 9. Sacco Societies (Non-Deposit Taking Business) Regulations 2020
    • 10. Sacco Societies (Amendment) Act, 2022
    • 11. Sacco Societies (Specified Non-Deposit Taking Business) (Levy) Order, 2023
    • 12. Cooperative Societies Act, No. 12 of 1997
    • 13. Employment Act, No. 11 of 2007
    • 14. Guarantee (House Purchase) Act, 1967 (Cap 462)
    • 15. Civil Servants (Housing Scheme Fund) Regulations, 2004
    • 16. Housing Scheme Fund Regulations, 2018 (Legal Notice No. 238 of 2018)
    • 17. Income Tax Act (Cap 470)
    • 18. Finance Act, No. 22 of 2022
    • 19. Public Finance Management Act, No. 18 of 2012
    • 20. Unclaimed Financial Assets Act, No. 40 of 2011
    • 21. Proceeds of Crime and Anti-Money Laundering Act, No. 9 of 2009
    • 22. Kenya Deposit Insurance Act, No. 10 of 2012
    • 23. Mortgages (Special Provisions) Act, 1968 (Cap 304)
    • 24. Auctioneers Act No. 5 of 1996
    • 25. Auctioneers Practice Rules 2009
    • 26. Auctioneer Rules, 1997
    • 27. Rent Restriction Act, 1959 (Cap 296)
    • 28. Stamp Duty Act, 1958 (Cap 480)
    • 29. Stamp Duty (Valuation of Immovable Property) Regulations 2020
    • 30. Value Added Tax Act, No. 35 of 2013
    • 31. Public Private Partnerships Act, No. 14 of 2021
    • 32. County Governments Act, No. 17 of 2012
    • 33. National Rating Act, 2024
    • 34. Distress for Rent Act, 1938 (Cap 293)
    • 35. Landlord and Tenant Bill, No. 3 of 2021
    • 36. The Cooperatives Bill, 2024
    • 37. The Central Bank of Kenya (Mortgage Refinance Companies) Regulations, 2019
    • 38. Finance Act No. 4 of 2023
    • 39. Tax Laws (Amendment) Act 2024
    • 40. Tax Procedures (Amendment) Act 2024
  • ANNEX G: OFF-PLAN HOUSING DEVELOPMENTS
  • ANNEX H: IN-DEPTH ANALYSIS ON HANGING REGULATIONS
    • 1. Housing Bill, 2021
    • 2. Landlord and Tenant Bill, No. 3 of 2021
    • 3. Retirement Benefits (Mortgage Loans) (Amendments) Regulations, 2020
    • 4. Housing Scheme Fund Regulations, 2018 (Legal Notice No. 238 of 2018)
    • 5. Housing Scheme Fund Regulations, 2018 (Legal Notice No. 238 of 2018)
    • 6. National Construction Authority (Defects Liability) Regulations, 2020
    • 7. The Finance Bill, 2024
    • 8. The Valuers Bill, 2022
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  1. ANNEX C: LAWS / POLICIES / REGULATIONS GOVERNING PHYSICAL PLANNING

18. Sectional Properties Regulations, 2021

These Regulations sought to give effect to the Sectional Properties Act 2021 by providing for details, and provides for Forms/Schedules for transactions.

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· These regulations were gazetted on 26 November 2021 and came into force on 10th December 2021 and seek to aid the implementation of the Sectional Properties Act 2020. They effectively repealed the .

· The Regulations have also provided for the various Forms to be used in transactions relating to sectional units in the Schedules.

· While the 1991 regulations recognized registration under multiple legal regimes/statutes, the 2021 Regulations anchor registration of sectional titles under the Sectional Properties Act 2020, effectively simplifying the process and dealing with the uncertainty and duplicity that typified the former legal regime.

· The Regulations refer to the Land Act 2012 and the Land Registration Act 2012 as opposed to the 1991 Regulations which referred to the Registered Land Act (now repealed). The new regulations have also updated the terms/changed the nomenclature used: for instance, they use ‘cadastral maps’ instead of registry index maps; and ‘georeferenced plans requiring coordinates’ instead of fixed boundaries. The Regulations also refer to ‘freehold’ tenure instead of the formerly confusing absolute proprietorship and ‘title deeds’ replaced certificates of title or certificate of lease.

· Significantly, the new Regulations have decentralized ownership of sectional units as evident through the introduction of rent apportionment forms for use by a rating authority (county governments) to apportion rent, rates, or taxes payable by each unit which then accompany the registration of sectional plans. Accordingly, unit owners can exercise more control over their units and reduce frustration or hindrance by sellers/vendors or management companies in dealing with one’s unit.

· The Regulations now provide that a corporation (established to manage the common areas in a sectional property) will form an internal dispute resolution committee on a need basis to determine disputes among unit owners thereby affording a fast and affordable dispute resolution forum as well as giving the owners more control over the process and outcome. This contrasts with the prior regime whereby disputes among unit owners were resolved at the Tribunal which took inordinately long (given the intermittent nature of sittings of the Tribunal and vacancies in its membership). Once all sectional units have been sold and reversionary interest reverts to the management company/corporation, only the corporation can lodge a suit in court for any violations following a resolution by shareholders (See, )

· The Regulations allow property developers, management companies and individual owners to convert long-term leases to sectional units, unlike the 1991 regulations which did not allow for this.

· The Regulations empower owners to indirectly enforce corporation’s by-laws against non-unit owner tenants. This is especially important given the difficulties that management companies had to contend with in enforcement of terms including nuisance and collection of service charge charges from tenants owing to the privity of contract doctrine.

· Relatedly, the Regulations also provide specific notification forms by a corporation to a unit owner where a tenant breaches the by-laws; they also provide a right to a corporation to refer the dispute to the internal dispute resolution committee; and provide for a form of notice issued to a tenant to vacate premises where the dispute resolution committee so decides.

· The 2021 Regulations adopt technology by allowing electronic submission of application forms and plans, which enables developers and landowners to file their sectional plans/title documents through the online Ardhi Sasa platform which saves on time and costs, allows users to access digital land information and facilitate land registration and administration. This contrasts with the 1991 regulations which required unit owners to physically register their titles at the various land registries.

· While the 2021 Regulations maintain co-ownership rights by entrenching incidental rights such as the right to quiet possession and duty not to use neighbouring premises in a manner that renders other premises unfit for purpose, they also require obtaining of the consent of an affected unit owner where the sub-division of a unit or consolidation of a unit is likely to affect an owner’s incidental rights. This means that unit owners’ rights are better protected.

· Following stakeholder concerns about the difficulties in implementation of the Act, the Regulations (Regulation 22) now provide useful exemptions to converting long-term leases to sectional titles where: it is expressly provided by agreement that the reversionary interest belongs to the developer, lessor or management company as the legal owner and not as trustee; and in case of large mixed-use developments or phased developments where it is agreed that the reversion shall be retained by the developer; and in case of projects of strategic national importance, substantial transactions and special economic zones which by their nature render it impracticable to relinquish the reversionary interest.

· Importantly, however, the Regulations still do not provide for the process/procedure of applying for these exemptions. There is also a need to introduce these exemptions in the principal statute (Sectional Properties Act 2020) which cannot be as easily changed and given that this is a substantive provision. There is also a need to provide further clarification in the exemptions on what is meant by a ‘mixed-use development’ in terms of minimum acreage and diversity.

· In addition, given the time that has lapsed since the commencement of the Act and the publication of the Regulations, (the 2-year timeline provided for in the Act within which long-term leases must be converted to sectional titles), there may be need for amendment of the substantive Act to extend the timelines or allow the Ministry to extend the timelines.

· There are also expected challenges in the conversion of long-term leases of charged properties where only a portion of sectional units have been sold. This is because there will be the need for the developer and unit buyers issued with long-term leases to cooperate, following issuance of a partial discharge. Where the unit buyers may have charged their units with financial institutions, this creates another challenge. What is more, even in cases of complete transfer of all sectional units, there is still need to ensure there are no gaps in the accuracy of data in this transition (conversion) given that securities are usually noted against individual leases rather than the Head Title. This certainly calls for a phased approach whereby a gazette notice is issued indicating parcels that will be converted including records of management companies for consents to charge.

https://new.kenyalaw.org/akn/ke/act/ln/2021/236/eng@2022-12-31
Sectional Properties Regulations 1991
Jitendraray Nathwani & another v Hitesh Devendra Makwana & 3 others [2020] eKLR