ByTags : Real Estate Investments , Real Estate in Kenya , Investing in Real Estate , Invest in Kenya , Diaspora Investment , Diaspora Real Estate Investment
Arm yourself with these useful tips.
The eCitizen portal allows you to conduct an online title search to reveal the registered owner of the property that you want to buy. Ask the promoter for a land reference number (LR) and conduct a search in the appropriate lands ministry registry to confirm that they own the land. For more information on conducting due diligence for property transactions, visit our webinar series here. There is typically a small fee of KES 520 payable via M-PESA or major credit cards that has currently been waived by the government.To conduct an official search, you need copies of the following documents from the owner of the property:
More often than not, real estate transactions are prone to fraud because of the amounts of money involved. Beyond conducting the preliminary official search; peruse files at the survey office, carry out a physical inspection of the beacons, confirm acreage set out in the title document resonates with actual acreage on the ground and research whether the property is public land or otherwise adversely mentioned in the infamous Ndung'u Land Report. This will help you avoid conflicts with government agencies or/and other interested parties to the same property in which you are also interested.
These services are provided by your attorneys at a reasonable fee within the confines of the Advocates Remuneration Order.
Due to the size of the transaction, it is important to ensure that you engage the services of an independent attorney to understand the terms and conditions of the sale/ lease agreement with the vendor. Notable items to look out for are:
At current interest rates, the monthly payment for a 20-year mortgage on a 2-bedroom home costing KES 2.5 million is KES 32,000. Evaluate the developer’s payment plan with current interest rates and monthly rents in mind. If the payment plan is too cheap, it is likely a sign of fraud. You’ve read the news. Can you really own a home of your own in Kenya for less than the rent payment on a similarly sized unit?
It is important to ask the developer for reports and certificates issued by the site engineers and architects. Before and during construction, consulting engineers are responsible for preparing geological reports to assess the ground is stable and a geotechnical survey assessing the load-bearing capacity of the land and the foundations. This will not only help you to avoid undue repair costs but also confirm that the building is structurally sound to live in. Also, ask the developer for copies of the National Construction Authority (NCA) and the National Environmental & Management Act (NEMA) certificates.
Consider whether the developer has completed or is currently constructing any real estate projects in Kenya and scour their Facebook or social media profile for any customer testimonials. Customer testimonials will tell you more about the developer’s workmanship, quality and responsiveness to client concerns while evaluating past or current projects will help you know what to expect from the vendor
If you are a legitimate business, documentation confirms the legal relationship between you and your shareholders, vendors and clients. If you are a fraudulent scheme, documentation creates legal liability. Most fraudulent investment schemes avoid issuing documentation in the form of receipts and confirmations; they also dispense with legal requirements such as collecting your identification and tax information. If you are sending money, a legitimate business will issue you with a confirmation or receipt.
Real estate transactions require confirmation. If you are buying property or a unit, it is common for the developer to organize a site visit to the development. In addition to due diligence (above), you should have the opportunity to visit the project’s site and view construction progress. If you cannot make it to a site visit, ask someone that you trust to conduct the visit on your behalf.
In the investments and real estate industry, it is common for businesses to insist on payments made through cheques, wire transfers and real time gross settlements which are traceable. Insist that the real estate company in Kenya provides you with a confirmation for all funds received.
Remember to keep your eyes open and trust your instincts.
Contact our financial advisors at www.cytonndiaspora.com for real estate solutions that stand up to the test. See how our investment and real estate solutions are legitimate.