Kenya: Land Reform In Kenya

Kenya has strong new land reform legislation, but how is it shaping up in practice? By way of background, the Kenyan Parliament enacted the Sectional Properties Act, Act No. 21 of 2020 (the "Act") to provide for the division of buildings into units to be owned by individual proprietors, as well as common property to be owned by the proprietors of the units as tenants in common, and to provide for the use and management of the units and common property. The Act commenced on 28 December 2020.

A year later, the Cabinet Secretary responsible for land and physical planning gazetted the Sectional Properties Regulations, 2021 (the "Regulations") to implement some aspects of the Act.

Ardhisasa: teething problems or systemic contradictions?

A little over a year since the National Land Information Management System (dubbed "Ardhisasa") platform was launched, there are still challenges surrounding the process of moving land records from the manual system to the digital system.

Some of the teething problems and systemic contradictions we have experienced in using the system include:

• Time delays for foreigners: For a foreigner with an alien identity (ID) card (issued by the Government of Kenya) to open an Ardhisasa account and transact in land transactions, the Ministry of Lands (the "Ministry") has to verify the authenticity of their alien ID card with the Ministry of State for Immigration and Registration of Persons. This process can run for weeks, to the detriment of land transactions where parties have included a "time is of the essence" clause.
• No automation for exceptions: The system design did not contemplate non-conventional land transactions, such as transfer of property by administrators of an estate or sale of property by a charge on default by a borrower. Therefore, most of these types of transactions are yet to be automated. This means that parties or their agents have to physically visit the Lands Registry.
• Confusing advice: The officials handling Ardhisasa-related queries often give varying answers to the same query. Thus, the lack of consistency on the process or procedure to be followed results in confusion and uncertainty.

With regard to sectional properties in particular, the issues we have experienced are as follows:

• Disorganised environment: Operational inefficiencies and delays at the Lands Registry, from inadequate paper for printing new sectional titles, to missing files and confusion on the implementation of the conversion of long-term leases.
• No sectional titles for new developments: By way of a notice issued by the Ministry on 7 May 2021, the Ministry stopped registering long-term leases drawn after 10 May 2021 in view of the enactment of the Act. However, the Regulations were only gazetted on 10 December 2021. This delay compounded the effects of the operational inefficiencies at the Lands Registry.
• Old law versus new law: In a meeting with representatives from the Ministry and the Law Society of Kenya, it was agreed that where registration of properties under the old regime has commenced, the Ministry will allow transactions to be performed until 28 December 2022, as the property owners transition to the new law. The owners will thereafter be required to proceed with the conversion once the deadline has lapsed.
• Confusion over deadlines: The 28 December 2022 deadline for the conversion of long-term leases to sectional properties has not been extended by the Ministry despite the various challenges faced during the conversion process.

Next steps

The Law Society of Kenya held a meeting with the Cabinet Secretary and the Institute of Surveyors of Kenya to discuss all these challenges in concluding transactions under the Ardhisasa system. The outcome was that some processes were activated, such as the application of some searches on Ardhisasa. However, the systemic contradictions highlighted above are yet to be addressed.

In theory, the system will certainly revolutionise land administration and management in Kenya for the better. It is our view, nevertheless, that the systemic contradictions first need to be resolved in order for the system to be fully effective and efficient.

We do however continue to engage with the Ministry of Lands on conversion and sectional title matters and we have successfully concluded several applications for conversion on behalf of various clients. We have established contacts at the Ministry of Lands who continue to update and provide guidance to us on the ArdhiSasa platform despite the various teething challenges currently being experienced.