With the introduction of the Sectional Properties Act 2020, property owners purchasing
sectional units like residential apartments or office units will now be able to have
individual titles over their units unlike before. Until the introduction of the Act, ownership
over such units would be done through long term leases which would be registered with the Registrar of Lands under the mother title of the property.
Registration of a Sectional Title under the Act
Registration of a sectional title is a pretty straightforward one that involves three
significant steps. The first step entails the registration of a sectional plan for the
property. This will include a geo-referenced plan with a bit more details than the
architectural drawings that used to be utilized in the long term leases in the previous
regime. The second step then is the creation of new individual titles for all units in the
property. This of course therefore means that the mother title is cancelled. The third
step is the establishment of an Owners Corporation as provided for under the Act. It
is important to note that the Owners Corporation to a large extent takes the place of the Management Companies that used to be incorporated for similar purposes under the previous regime that dealt with long term leases.
Owners’ benefits under the SPA
The SPA makes provision for a mechanism of apportioning the common property to
each unit owner. Previously, unit owners held long term leases for their units while the
management companies incorporated for the management and administration of the
property would hold ownership of the common places. Under the SPA, each unit owner
owns a fraction entitled to him depending on his ownership and holds title over the
common areas in common with all other unit owners. The Owners Corporation therefore in essence does not own any common areas but its duty is solely for the management and administration of the property. The common areas are therefore no longer owned by a common entity but directly by the owners.
Further, the SPA provides for a mechanism of defining each owners interest in the
property by way of geo-referencing. This means that there exists detailed definition of the areas and units owned by an owner.
The SPA also provides for the closure of the main/mother title to prevent further
dealings on the title and hence goes a long way in protecting the rights of the unit
owners from unscrupulous developers who may at their own behest proceed to attach
the title to the property on a charge taken out by them.
The title deed will include a share in the common areas whereas in the long term leases this was always owned jointly by the owners through the management Company. The tenure of the fresh individual titles is transferred from the mother title. So where the mother title was for a property under the freehold regime, then the titles automatically acquire freehold status. Same goes to leasehold tenures.
An Owner’s Corporation is also established and not a management company under the Companies Act as was previously the case. By-laws have to be formed and the
corporation does not own any common areas. Its role is however similar to that of a
management Company and includes the management and administration of property.
Apartments with long term leases
So, what do you do if you currently have apartments that have long term leases?
1. Prepare a sectional plan – use a licensed surveyor to prepare a geo referenced plan.
These can be engaged by the management company or owners. This geo-referenced
plan then has to be approved by the Survey of Kenya.
2. Submit the sectional plan to lands office. The County Government has to approve the plan as against the approved building plans. The Survey of Kenya will authenticate the plan.
3. Upon registration, the mother title is closed and new individual titles issued to owners
and an owners corporation is established.
4. Dissolution of the management company can then take place at the end of the
process and the Owners Corporation take over the management and administration of the property accordingly.