The Sectional Properties Act, 2020 required existing long-term leases over units to be converted. Many owners in Nairobi have not done it, and only discover the problem when a buyer's advocate raises it.
If you own an apartment, flat, maisonette, town house or office that was sold to you on a long-term sub-lease registered before December 2020, the title you hold may not be in the form the law now contemplates. For most owners this causes no difficulty until they try to sell, refinance or charge the unit — at which point it causes a great deal.
What the Act changed
The Sectional Properties Act, 2020 replaced the 1987 statute and was brought into line with the Constitution of Kenya, 2010 and the land legislation enacted in 2012. It commenced on 28 December 2020, and the Sectional Properties Regulations, 2021 were gazetted in November 2021 to operationalise it.
The Act provides for the division of buildings into units owned by individual proprietors, with the common property held by unit owners as tenants in common. That is a different ownership structure from the long-term sub-lease model under which most older Kenyan apartment developments were sold.
Two provisions matter most to owners:
- Section 13(1) prevents the sale of premises as a residential or commercial unit until a sectional plan including those premises is registered.
- Section 13(2) required long-term sub-leases intended to confer ownership of a unit, registered before the Act's commencement, to be reviewed so as to conform with section 54(5) of the Land Registration Act — within two years of commencement.
The consequence of not converting
Where conversion is not effected, the Registrar may register a restriction against the mother parcel, preventing further dealings. The practical effect is that the whole development can be frozen because of collective inaction, not because of anything the individual owner did.
Two points soften the position. Conversion may be initiated by the developer, the management company, a unit owner or a chargee — an individual owner is not dependent on a defunct developer to start the process. And an owner who already paid stamp duty on the original sub-lease is not required to pay it again on the revision.
Where the timeline actually stands
The statutory two-year window ran from 28 December 2020. In practice, implementation has been slower than the statute anticipated: the Regulations were not gazetted until almost a year into that window, and registry capacity has been a constraint throughout. Conversions continue to be processed, and commentary on the current position varies.
Our advice is not to rely on any particular reading of the deadline. Confirm the current registry practice for your development before you transact, and treat conversion as work to be done now rather than when a sale is already under negotiation.
What conversion involves
A surveyor prepares the sectional plan and endorses it for registration. For leasehold properties, a land administration officer confirms that rent has been apportioned across the units. Advocates prepare the by-laws and the management and recreational agreements, and handle compliance with the Act and Regulations. The Ministry of Lands registers the sectional plan, issues sectional titles over the individual units, and issues the corporation's certificate of registration.
It is a coordinated exercise rather than a single filing, and it works best when the management company drives it for the whole development at once.
Our view
We see this most often as a transaction problem. A sale is agreed, the buyer's advocate conducts due diligence, and the title structure turns out to be inconsistent with the current statutory framework. The sale then stalls while conversion is attempted under time pressure, frequently with a developer who no longer exists and a management company that has never done it before.
If you own a unit in a development registered on the old model, raise conversion with your management company now. If you are buying one, make the title structure a due diligence item at the outset rather than something you discover after the deposit has been paid.
Hansen Omido, CPM
Partner — Business DevelopmentHansen advises on corporate and commercial law, banking and real estate, with a specialisation in wealth protection, succession planning and estate administration.
