Do not get conned: Why due diligence is critical before buying land
Land is a very valuable asset because of its finiteness. There is only so much land that is available on this earth.
Humans not only live on but also perform all economic activities on land. This coupled with the fact the world population is ever increasing, land everywhere keeps on appreciating in value consequently attracting an upsurge in demand.
Because land is constantly appreciating in value, it is deemed an excellent investment by many. Hence the reason why land transactions are fraught with fraud. Therefore, as a buyer you need to know pitfalls to avoid and safeguards to take when purchasing land lest you find yourself deep in endless court battles or having lost your hard-earned money to swindlers or your million shillings investment being demolished because it is built at the wrong place such as a riparian reserve.
The following are 11 things that you need to do to avoid becoming a victim of land fraud:
- Proposed use of the land
Land in Kenya is categorized as agricultural, residential, commercial, industrial, recreational, riparian reserves, forest land, national parks and reserves, wildlife corridor, gazetted historical sites, flight paths, among others. The categorization of land is referred to as zoning. You should therefore enquire from both the National and County Governments whether the land in question is available for use, registered and suitable for the purpose for which you want to buy it.
You should go to the relevant authorities if the land sits next to a major road or highway, an airport, a river, a national park or reserve, forest, historical site etc. to find out from the authority if the land is theirs or not.
This is important as it protects you from possible exploitation from the seller and/or brokers. Valuation will provide an estimate of the market value of the land. Engaging a reputable registered valuer will be prudent.
- Meet the Seller in person
Before you pay for the land, have a physical meeting with the seller. Whereas online or remote transactions are growing popular and very convenient today, they are susceptible to fraud by fraudsters who may take advantage of you.
Request them for copies of their National ID cards, and PIN Certificates. If the seller is a company, request for copies of their National ID cards, and PIN Certificates of the directors.
- Ask neighbours questions about the seller or history of the land
Neighbours of the land you are interested in, are better placed to provide you with information regarding the real owner of the land, history of the land ownership as well as whether there are disputes over the land. A neighbour may inform you of family squabbles, boundary issues, how the land came about, whether it was a settlement scheme, community land, other buyers (multiple owners), set aside for public utilities such as sewerage plants, cemeteries and other very valuable information.
Show the neighbours the photos of the sellers or the directors as they appear on the copies of their National ID cards, and ask them to confirm whether indeed the persons whose photos are on the IDs are indeed the real owner of the land. If the seller is not the real owner and had forged the ID of the owner by replacing the real owner’s photo with the photo of the fraudster-seller, the neighbour will identify the deception, for instance where the real owner is an old lady or young lady and the photo on the ID shows a young woman or old lady respectively.
- Physical visit
Believe what you see and not what you hear or read online. Only pay after you have confirmed that the land meets your expectations, has a clean title, and is owned by the person purporting to sell it. You can be promised an elephant and be given a rat. You should also conduct a physical inspection of the boundaries.
If possible, wait for the rains if you want to be sure of the drainage and soil type. The case of the upmarket Green-Park Estate in Athi River which flooded in March, 2018 after Stoni Athi River bursts its banks, should be a reminder of the perils of purchasing and constructing on land that sits on flood prone areas.
To ascertain your boundary, get a licensed land surveyor to survey the land and confirm the availability and integrity of the beacons and the boundaries. Request the surveyor to obtain the land’s survey map from the Survey’s office and check whether the land and its title number actually exists on the survey map. Survey maps are not easy to forge unlike title deeds, searches and other documents.
- Investigation of the title
Conduct a search at the relevant land registry. If you are buying land from a company, also conduct a search on the company’s directors and shareholders at the Companies’ Registry.
Why do a search:
- You will know the true owner of the land.
- You will know who are the true directors of the company, if the seller is a company.
- You will know if the land has an encumbrance (such as a bank charge, a caution, a caveat, a restriction).
- You get compensation for a mistake that arises out of an official search.
- You will know the exact size of the land as captured in the land records.
- You will know the history of the land, whether it belongs ultimately to the National Government or the County Government or a governmental authority such as the Export Processing Zones (in case of Leases), the number of years remaining on the Lease, or it belongs to the seller (in case of Freehold land).
- You will know the rent payable to the National Government if there is any.