New Land Digitization & Registry System – The anticipated benefits and what it means for your Real Estate Investments

Buying, selling and refinancing of land is a significant component of the Kenyan Economy. For most Kenyans, it represents one of the largest financial and legal transactions in their lifetime. Therefore, the ability to firmly and quickly establish ownership to allow secure and effective transfers is an essential part of the economic competitiveness of Kenya and the modern world. An ever-increasing population and affordability levels have led to ownership of land changing hands more frequently leading to an increased the number of transactions alongside heightened fraud cases and delayed processes. To counter the difficulty and streamline the land registry, the Kenyan government recently adopted a digitized model. Today, we discuss its anticipated benefits and what it means for your real estate investment.

Services now accessible through the eCitizen portal include the transfer of land ownership, payment and issuance of land rent clearance certificates, payments of stamp duty, registration & consent fees, the application and withdrawal of caution, and the registration & search of land documents. Based on these services, below are the three major benefits to be accrued from the new system.

a) Remove the risk of fraud

Real estate fraud costs millions of shillings each year. And this is aggravated by buyers and sellers who are willing to forego safety measures in a haste to make a quick deal.  The internet and technological advancements have also facilitated advertising of non-existent property and making forged documents. With a digitized system of land ownership with the possibility to track down authentic land documents, the risk of fraud becomes less. This makes it easier and authentic to buy and sell a property.

Unregistered land is at the risk of fraudulent and fraudulent trespass whereas registered land is insured against illegal encroachment and fraudulent sale. A registered title offers a sense of security. By a simple search at the registry, prospective buyers will become aware of the ownership status, and further assure them of no adverse claims over the property in question.

b) Improved transparency of land transactions

A lot of activity in land registration is expected by the ministry of lands and physical planning department. The data stored in the database is expected to increase transparency in property transactions hence streamlining the processes of transfer of land ownership.  Also expected is an influx of investors who were previously skeptical on the transparency of the property buying market in Kenya.

For investors, public documentation of property will enable detailed visibility of their real estate investments making it a marketing tool of sorts. Details such as the location & description of the property, restrictive covenants on the use of land, and caveats or warnings that affect a property can allow a potential buyer make an investment decision.

c) Increase technology efficiencies

The client-server technology is the platform on which the newly automated land registry system is based. And perhaps top among the issues that will be quickly addressed is a headache that has marred the land offices for long: missing files. This will now be a thing of the past as improved storage and retrieval of information creates shorter search timelines and a simpler work environment with high confidence levels. By design, the technology presupposes a central trust system where a sole agency is trusted to manage the entire value chain including registration, ownership, title deeds, among others hence creating efficiencies.

Registered titles constitute evidence of the title and make it cheaper and easier to review and transfer title in the land which in turn facilitates fast transactions. Efficiency in transactions shall, therefore, improve the liquidity of assets such as property.

d) Simplify Property Conveyance

Property conveyance will be simplified as it will not be necessary to look at old title deeds to ascertain if the registered owner is the legal owner. Title to property can be established easily and with certainty – the land register will be conclusive evidence of title. Property purchasers can, therefore, be sure that the registered owner is the legal owner. Titles to property acquired by purchasers in good faith will therefore not be affected by claims which are not registered in the land register. Defects or uncertainties in a title which affect the value and redevelopment potential of some properties are also expected to be brought to a definite conclusion

d) Cost Saving to the Government and General Public

Although it may not alter the quality of underlying property rights information, computerization and the land registry is likely to reduce the cost associated with keeping the property register up to date, eliminate informal side payments that have traditionally been associated with property registration, and improve third party access to registry information. These will potentially increase the volume of registered land transactions, reduce the level of informality, and thus improve registry comprehensiveness.

In a nutshell, the system will provide the base for land markets and development. The information management system is expected to benefit public programs such as land planning, infrastructure development, environmental protection, and resource management. Through this objective, records of a property will allow easy land mapping which may put real estate investments on a path to infrastructure development.

This article is written by Buildafrique Consulting Group; a Kenya Real Estate Consultant and Development Solutions provider that offers End-to-End Financial, Development Management, and Investments Solutions in Real Estate, to allow Developer, Investors, and prospective Home Owners manage risks and realize value for their investments in a fast-evolving Real Estate market.

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