What is the legal concept of land in Kenya?
The legal conception of land in English
common law is expressed in the maxim “cujus
est solum, ejust est, ad coelum, usque et ad inferos.: Land embraces more
than just soil. It includes all things embedded in it and all things found in
the aerospace above and the geospace below and any fixtures which may have been
annexed to it even by strangers.
As the English economy developed particularly
under rapid technological change, this wide conception begun to yield to a
series of exceptions and statutory limitations were designed to facilitate new
forms and patterns of land use. These were in turn extended to Kenya’s legal
system.
The English common law perception of land and
the non-statutory exceptions to it were received in Kenya by virtue of
Article 2 of the East African Order-In-Council of 1897 the substance of which
is retained at section 3 of the Judicature Act (Cap 8) and are also
incorporated at section 163 and section 3 of the Registered Land Act (Cap 300)
(“RLA”) and the Transfer of Property Act (“TPA”) respectively.
That conception has however been
substantially modified by local legislation and circumstances and in the case
of land held under customary law, the conception is totally inapplicable.
Section
3 of the Transfer of Property Act defines
“immoveable property (land) as not including standing timber, growing crops or
grass.
The RTA at section 2 defines “land” to
include land and benefits to arise out of land or things embedded or rooted in
the earth or attached to what is so embedded for the permanent beneficial
enjoyment for that which it is so attached or permanently fastened to anything
so embedded, rooted or attached.
The Land Titles Act 1908, (Cap 282) (“LTA”) defines “immoveable property” to
include land and benefits that arise out of land and things attached to the
earth or permanently fastened to anything attached to the land.
The Land Consolidated Act at section 2 defines
“land” to include land covered with water or things growing thereon and
buildings and other things permanently affixed thereto.
The Land Acquisition Act at section 2 defines “land” as to include all land whether covered
with water or not and things attached to the land or permanently fastened to
anything attached to the land.
The legal conception of land in customary law is confined to the
physical soil.
The
concept of fixtures is therefore alien to it. This much is evident
in the clear separation of indigenous law of the soil from buildings and other
fixtures which are regarded as the property of the parties erecting or planting
rather than of
the person entitled to immediate access to the use of the soil.
What are the various land
registration regimes in Kenya?
In Kenya we have five
land registration systems:
1. Registration
of Documents Act 1901, RDA (Cap 285) 1st Document
2. Land
Titles Act 1908, LTA (Cap 282)
3. Government
Lands Act 1915, GLA (Cap 280)
4. Registration
of Titles Act, 1920, RTA (Cap 281)
5. Registered
Land Act 1963, (“RLA”) (Cap 300).
The Transfer of Property Act is the
substantive law of the land registered under the
aforementioned Acts other than the RLA. The
RLA is the substantive law of the land
How
does the Sectional Properties Act slot into the land registration regime
in
Kenya?
The Sectional Properties Act No 21 of 1987 is
applicable under the RLA. The
substantive law is the Registered Land Act
which governs all the rights and
obligations of the parties. Where land is
registered under the GLA or RTA, such
land must first be converted to RLA.
The creation and establishment of a new
corporate body similar to a company
registered under the companies act. When the
building or estate is brought under
the Sectional Properties Act, the corporate
body automatically comes into being
without requiring any other incorporation
formalities to be observed.
Why was
the SPA necessary?
The SPA was deemed necessary for two main reasons:
i) to provide a good
security for financial institutions and other lenders; and
ii) to make the cost
of purchasing housing units more affordable to ordinary
Kenyans.
Prior to the
enactment of the SPA, the land laws in Kenya facilitated the sale and
purchase of flats by
way of creation of subleases. In the absence of a
developed system in
sectional titles, the ownership of apartments had been
based on subleases
granted by the developer carved out of the leasehold
interest in
government or Local authorities leases.
Financial institutions such as Banks were
reluctant to accept such titles as being
good titles for the
purpose of borrowing and lending money on their security. The
objections frequently
cited by some financial institutions and their legal advisers
against subleases of
flats were:
The sublease in
respect of a flat is dependent on the head lease being kept alive for full
term. On the determination of the sublease to the flat, it is not always
certain that the Head lessor will grant an extension.
Even if the Head
lessor was prepared to grant an extension, the terms were often very onerous
and therefore undesirable and unacceptable to the sub lessee.
In the determination
of the Head Lease itself, the head lessor may not be allowed to apply for an
extension, or may not be willing to do so which would mean that no further
sublease could be available.
The subsistence of
the sublease was dependent on the head lessee observing his obligations under
the head lease.
The rapidly
escalating value of land in major urban centres and ever rising cost
building materials
have put the price of houses beyond the reach of ordinary
Kenyans. In order to
alleviate this problem developers have had to change their
style in development
of residential units. The trend is now to develop high rise
apartments in
formerly exclusive suburbs in Nairobi such as Kileleshwa, Lavington and
Kilimani amongst others..
In recognition of the
need for a more comprehensive system of title for
apartment, after a
careful study and research, the Government introduced the
Sectional Properties
Act in 1987 (Act No. 21 of 1987).
Where was
the SPA derived from and how does it work there?
The Sectional Properties system of owning land was
imported from Australia. In
Australia, the
sectional properties system can be traced to the demand for
ownership rights of
occupied premises, whether for residential, business,
professional,
commercial or industrial purposes, coupled with the recognition by
the Torrens
enactments of the principle that subdivision of land may be
horizontal as well as
vertical brought within the ambit of the Torrens system the
type of title known
as “stratum estates” or “strata title”.
In the State of
Victoria, Australia, amendments made to the Victorian
Transfer of Land Act
1958 by the Transfer of Land (Stratum Estates Act)
1960, No. 6646, led
the way to the institution of special strata titles legislation in
all the other
Australian States. Under section 98 of the 1958 Act as substituted
by Act No. 6544 of
1959, a building might be subdivided into separate units by a
plan of sub-division
which described each stratum unit by boundaries and
elevation.
When sealed by the
relevant local government corporation, this might be lodged
with the Registrar of
Titles for registration and on sale of a unit the stratum or
portion thereof
occupied by the unit as numbered on the plan could be separately
transferred and a
certificate of title for the unit issued.
A holding or service
company was formed to which title to the land in and around
the building, the
foundations, roofs common stairways, passages, outbuildings,
common fixtures,
service and equipment and fences were transferred, and a
group of shares in
the company corresponding with the unit acquired by the
purchaser was
allotted to each purchaser.
A common deed of
agreement was entered into between the company and the
owner of each unit
regulating the use and maintenance and servicing of the
common parts of the
building. A charge was registered over each unit to secure
payments under the
common deed. The rights and liabilities of the various unit
owners and the
company were regulated by the articles of association of the
company, the
instrument of transfer, the common deed, the charge and section
98 of the Transfer of
land Act 1958.
This legislation has
now been superseded in Victoria by the Strata Titles Act
1967, No. 7751 which
contains provisions for conversion of existing building
schemes of
subdivision into schemes under the later Act.
The New South Wales
Conveyancing (Strata Titles) Act 1961, No.17 (amended
by 1961, No. 65)
became the forerunner of the present type of Strata
titles legislation in
all the Australian States.
The Acts are the
Building Unit Titles Act 1965, No. 3 in the State of Queensland,
the Real Property Act
Amendment (Strata titles) Act 1967, No. 37 in the State of
South Australia, the
Strata Titles Act 1966 No. 39 in the State of Western
Australia and the
Conveyancing and Law of Property Act 1962 , No. 72 in the
State of Tasmania.
In all States other
than Tasmania, provisions were made for Strata titles to be
issued only in
respect of land under the famous Torrens system of title. Broadly
speaking, the normal
features of Strata titles in all the Australian States are:
1. The registration
of a Strata or stratum plan delineating the area of land on
which the building is
erected and showing the location of the building and
defining the position
and boundaries of each “lot”or apartment in the building.
This position is
reflected in part two of the Kenyan SPA.
2. The implication in
favour of each “lot” of easements of subjacent and lateral
support by other
lots, an easement of shelter by the parts of the building
affording shelter and
of easements for services such as water,
sewerage, drainage,
gas, electricity and the like.
3. The vesting of the
common property, that is, so much of the land as is not
included in a lot
such as halls, stairways, passages, lifts and the land surrounding
the building, in the
lot owners as tenants in common so that each owner is
proprietor of his lot
plus an undivided share in the “common property". This share
is proportional to
the proprietor’s ‘unit entitlement that is, the relative fractional
value of the whole
building assigned to his lot on the plan. Apart from the mere
fractional ownership
of the common property the unit entitlement determines his
proportion of the total
upkeep contributions. In South Australia however, the
corporation is the
registered proprietor of the common property.
4. The formation of
the combined proprietors into a body corporate or
"corporation"
invested with the duties of seeing to the insurance of the building,
the maintenance and
upkeep of the common property and with power to
establish a
maintenance fund and to levy and recover contributions from the
proprietors. In some
jurisdictions such as New South Wales, municipal rates are
levied not on the
property as a whole but on the individual lot holders.
5. The establishment
of rules or by laws, some of which may only be altered by unanimous resolution
and others of which may be added to, amended or repealed and replaced by the
body corporate in general meetings. These rules govern the duties of
proprietors, the duties and powers of the body corporate, the composition,
election, duties and
powers of the council
of the body corporate, the holdings of meetings
of the members and
proceedings and voting at such meeting and the regulation of duties of
individual proprietors in relation to the building and the common property.
6. A very important
provision for the adjudication of rights of the proprietors inter se in the event of the destruction
or damage amounting to destruction of the building.
What is the Sectional Property Land Regime?
The system of
Sectional Property entails the following.
a. The division of
buildings into sections and common property and for the
acquisition of
separate ownership in such section coupled with joint ownership of
such common property.
b. control of certain
incidents attaching to separate ownership in such sections
and the joint
ownership in such common property.
c. Registration of
leases and other interests in respect of parts of buildings.
The process of
creation of sectional properties for a given buliding starts with
registration of a
sectional plan by the Registrar at the instance of the registered
owner of the parcel
as per section 4 of the SPA.
A sectional plan
means a plan of the building which is intended to bring under the
SPA prepared by an
Architect or a registered Building Surveyor registered under
the Building
Surveyors chapter of the Institution of Surveyors in Kenya as per
section 11 of the
SPA.
The sectional plan
must be approved by a Local Authority. As provided for in
sub-section 11 (b) of
the SPA.
Upon registration of
the sectional plan, the following will happen as provided for
at sub-sections 5 (1)
- ( 6):
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The register of the parcel described shall be closed;
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A separate register of each unit described therein shall be opened;
bbbbbbbbbbbbb.
A certificate of sectional property shall be issued for each unit.
ccccccccccccc.
The Registrar shall submit a copy of the Sectional Plan to the local
authority within whose area the parcel is located.
ddddddddddddd.
Interests affecting the parcel appearing in the Register that has been
closed shall be endorsed on the registers opened for each unit and on the
certificate of sectional property for each unit.
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The title to a unit comprised in the sectional plan shall, with effect
from the date of the registration of the sectional plan be deemed to be issued
under the RLA which shall accordingly apply to all transactions relating to the
unit.
Sub-section 3 (1) of
the SPA defines “common property”as all that portion of the
entire sectional
property which is not comprised in a unit shown in a sectional
plan.of units. The
term refers to everything from the skin of the walls, ceilings and
floor of each unit
outwards. Extensions of the units balconies, roads, walkways,
parking areas and
recreational facilities usually form part of the common
property. The
Corporation does not hold the common property beneficially, but
only as an agent for
the units owners. No title deed is issued in respect of the
common property but
upon registration of the sectional plan a register is opened
for common property.
A section of the
common property can be sold if the sale would be in the interest
of the unit owners.
There must be a unanimous resolution authorising the sale.
But any part of the
common property which is used for personal access to one or
more units cannot be
sold. The Corporation may also acquire additional common
property is there is
need.
Subsection 17 (1)
provides that upon registration of a sectional plan, there shall
be constituted a
Corporation under the name, “The Owners Sectional Plan
No....[the number to
be specified being the number given to the plan on
registration]. It
does not require any other registration for it to have legal validity.
Sub-section 17 (2)
(a) and (b) provide that the member s of the Corporation are
the owners of units
in the parcel to which the sectional plan relates or persons
who are entitled to
the parcel when the sectional arrangement is terminated
under the Act.
Sub section 17 (3)
provides that the Corporation shall have perpetual succession
and a common seal. It
is capable of suing and being sued in its corporate name
but it may not carry
on any trading activity as provided in sub-sections 18 (1) and
section 21
respectively. It may sue for and in respect of any damage or injury to
the common porperty
caused by any person whether that person is the proprietor
of a unit or not
(sub-section 18 (2)). The provisions of the company Act do not
apply to the
Corporation.
Sub-sections 20 (1) -
(5) of the SPA list the duties for the corporation as:
(a) To carry out any duty imposed
on it by the bylaws and their enforcement.
(b) Insure and keep insured buildings
and other improvements on the parcel against fire;
(c) To effect such other insurance
as it is required by law to effect or as it may consider expedient;
(d) To pay premiums in respect of
any policy of insurance effected by it;
(e) To keep common property in
state of good repair;
(f) To comply with any notices or
order duly served on it by any competent
local authority or public body requiring repairs to, or work to be
performed in respect of the land or any building or improvements thereon.
(g) To control, manage and
administer the common property and to do all
things reasonably necessary for the enforcement of the by-laws;.
(h) To do all things reasonably
necessary for the enforcement of any lease or license under which the land is
held;
(i) To establish and maintain a
fund for administrative expenses sufficient in the opinion of the Corporation
for the control, management and administration of the common property and for
payment of insurance premiums, rent and the discharge of any other obligation
of the Corporation.
(j) To determine from time to
time the amount to be paid for the purposes aforesaid.
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To raise the amount so determined by levying contributions on the
proprietors in proportion to the units entitlement of their respective units.
(l) Pursuant to a resolution of
the proprietors, to distribute any money or personal property in its possession
and surplus to its current requirements among the proprietors for the time
being according to their units entitlement.
Upon registration of
the sectional plan the insurable interest in the units and the common property
passes to the Corporation which upon appointment of the institutional manager
devolves upon him (section 40 SPA)
The corporation may
by special resolution acquire or dispose of an interest in immovable property.
it shall also have the power to recover by an action in debt administrative
expenses incurred by it from owners to the units. These duties may be delegated
by the Corporation to the Institutional Manager. The position of Institutional
Manager and his duties will be examined later in this paper.
The owner of the land
at the time a sectional plan is registered shall provide to the Corporation
original or copy thereof of the documents, of warranties and guarantee in the
property architectural, structural and electrical drawings with specification
and drainage plans. The Corporation may also by written request demand any of
these documents from the owner. — S.39. The corporation has the power to
dispose off the common property or grant exclusive use of the common property
to anybody on behalf of owners, and by a unanimous resolution the Corporation
may be directed to accept on behalf of the owners a grant of easement or a
restrictive covenant benefiting the parcel (S44 SPA). it also can be directed
by a unanimous resolution to execute a restrictive covenant burdening the
parcel.
When a developer has
registered a sectional plan, then 90 days after 50% of the units are so d or
108 days from the day that the first residential unit is sold whichever is
sooner, he shall convene a meeting of the Corporation at which a board shall be
elected. For efficient running of the Corporation, the Board must be effective
and efficient. It must be alert to the problems which may occur within the
sectional property.
When a person becomes
a member, or ceases to be one, a notice must be filed in the Lands Registry
stating the date when the person became a member or ceased to be one (8.26 (2)
SPA)
All powers and duties
of a corporation shall, subject to any restriction imposed or direction given
at a general meeting, be exercised and performed by the board of the
Corporation. All acts done in good faith by the Board are valid, even if it is
later discovered that there was a defect in the appointment, election or
continuance in the office of any member of the Board. Section 28 stipulates
that the Board shall convene an annual general meeting every year for the Unit
owners. The time difference between one general meeting and the other may not be
more than fifteen months.
The Institutional
Manager:
Within 28 days of the
election of the Board of Management, it shall appoint an Institutional Manager
for the management of the units, the movable and immovable property of the
corporation. The Institutional Manager will always work under the direction of
the Corporation.
The mutual rights and
obligations of the proprietors are regulated by the bylaws. Bylaws may deal not
only with corporate structure but with the duties and powers of individual
proprietors ad the corporation and with the general use and enjoyment of the
property. 8.30 (1) of the Act states that:
"The Corporation
may make bylaws to provide for the control management and administration of the
units, the movable and immovable property of the Corporation and the common
property. Although there is a set of bylaws provided by the Act, the Corporation
can choose to make a completely new set of bylaws to govern the management of
their property as they deem fit. There must be a special resolution passed at a
properly convened meeting before the bylaws can be changed, and an amendment
repeal or replacement of a bylay does not take effect until the Corporation has
filed the copy of the resolution with the Registrar and the Registrar has made
a memorandum of the filing of the same on the sectional plan" it is
important to note that the Act also provides that:
"No bylaws shall
operate to prohibit or restrict the devolution of units or any transfer, lease
or other dealing with them or to destroy or modify an easement implied or
created by the Act."The bylaws bind the Corporation and the owners to the
same extent as if the bylaws had been signed by the Corporation and by each
owner and contain covenants on the part of each owner with every other owner
and with the Corporation to observe and perform all the provisions of the
bylaws. The implication here is that each owner has the right to have the
provisions of the by — laws and rules observed. At the same time the Board of
Directors has the responsibility to see that they are enforced. A penalty for
contravention of the bylaws by an owner, tenant or other person in a
residential unit is shillings 25,000/.
The Board may by
resolution determine the minimum amount that may be paid from the Reserve Fund
in respect of a single item. For effective, management, the Reserve Fund must
be adequate, and it must be managed property. The Board is obliged to ensure a
reasonable Reserve Fund for future replacement and repairs. This is done by
deciding early enough on how much each unit owner has to contribute to meet
such need.
The contributions
must be levied in respect of each unit and is payable by the proprietors in
shares proportional to their unit factors.
The Reserve Fund is
probably the single most important factor in the long term health of the
Corporation. A healthy fund protects the longterm future of the Corporation as
well as its present owners. Any funds not immediately required by the
Corporation may be invested, but only in such investment as are permissible for
a trustee in accordance with the Trustee Act A.37.
insurance
The Board of Director
s role in management of the sectional property is a judicious one. They are
expected to act in good faith, but even in so acting, the directors might find
themselves exposed to suits for any of the following reasons.
(a) failure to have sufficient
Capital Replacement Reserve Fund;
(b) failure to maintain
properinsurance for the property;
(c) failure to enforce bylaws;
(d) failure to maintain proper
insurance for the property;
(e) breach of Contract, and
(f) wrongful dismissal of
employees engaged by the Corporation.
For any of the above
suits, the directors must take out adequate insurance cover to protect
‘themselves in case any ‘damages are to be paid.,. It is advisable to get an
insurance coverage for the directors individually, collectively and also fOr
the sectional property itself for any damages that may arise.
Possible types of
Insurance which may be taken out:
(a) All Risks Property insurance
(b) Comprehensive General
liability Insurance
(c) Bond
(d) Machinery Insurance
(e) Directors an~d Office
Liability Insurance.
Dissolution of a
Corporation
S.58 provides that
the court on an application by the Corporation, a member of the Corporation or
an Institutional, Manager, may be order provide for the winding —up of the
affairs of the Corporation and by the same or subsequent order the court may
declare the Corporation dissolved on a date specified in the order.
It
Terrn!~natiQn of
Sectional Pr~qpe~~y
The sectional status
of the building is deemed to be terminated when the members by a unanimous
resolution so resolve or the court so declares, and the Corporation thereupon
holds the parcel in trust for all its members in shares proportional to their
respective unit entitlement.
The said owners of
the units in the plan are thus entitled to the parcel as tenants in common in
proportions equal to their unit entitlement. In cases where the building is
damaged but the sectional status is not terminated but the sectional status is
not terminated then pursuant to S. 54 the court has extensive powers to settle
a scheme for reinforcement in whole or in part and asking any other orders
necessary to effect the said restitution.
How does the SPA allow for acquisition of property rights in space and
time and in accordance with exclusive proprietorship, concurrent proprietorship
and consecutive proprietorship?
Acquisition of property rights in space and time.
Since in law land
extends “usque ad coelum et ad inferos”
it has always been possible to divide
the actual soil into strata and to convey parts of such strata separately to
different persons or to sever the minerals from the rest of the soil and to
convey them as a thing apart with separate, distinct rights for working them.
Even though it is
legally possible in theory, it was always felt to be difficult in practice to
divide air space into distinct parts in order to transfer or convey the divided
air spaces.
One of the
difficulties of attending such a process is that it could result, in the event
of the destruction of a building, in a proprietor’s being the owner of a
box-like content of air space above ground level with ill defined location and
dimensions .
The SPA solves these
problems through the sectional plans and its insurance provisions. The division
of buildings into sections and common property and for the acquisition of
separate ownership in such sections coupled with joint ownership of
such common property.
Possible types of
Insurance which may be taken out:
(a) All Risks Property insurance
(b) Comprehensive General
liability Insurance
(c) Bond
(d) Machinery Insurance
(e) Directors and Office Liability
Insurance.
Acquisition
of property rights in accordance with exclusive proprietorship.
Upon registration of the sectional plan, a
separate register of each unit described therein shall be opened, A certificate of sectional property
shall be issued for each unit and The title to a unit comprised in the
sectional plan shall, with effect from the date of the registration of the
sectional plan be deemed to be issued under the RLA which shall accordingly
apply to all transactions relating to the unit. The owner of each unit
therefore can enjoy the exclusive rights of ownership of the unit such as
selling her unit, leasing the unit, give the unit as asecurity for a loan etc.
These exclusive property rights are guarded
under the SPA which provides that no bylaws shall operate to prohibit or
restrict the devolution of units or any transfer, lease or other dealing with
them or to destroy or modify an easement implied or created by the Act.
Acquisition of property rights in accordance with concurrent
proprietorship.
Concurrent ownership arises where
two or more persons have a simultaneous and not a consecutive interest in the
same land at one time. Concurrent ownership is also referred to as
co-ownership. There are two main types of co-ownership:
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Joint ownership
This type of
ownership is created when the four unities of titles, possession, interest and
time are present. Unity of possession refers to the situation where each of the proprietors is entitled to
possession of every portion and the whole of the land. The land is not divided
into parts with specified parts belonging to a particular person.
Under the SPA there
is concurrent ownership because we have a situation where two or more persons
have a simultaneous interest in the same land at one time. We have unity of
title because all the sectional property are entitled to a part or parts of the
whole but not to the whole exclusively. The land is divided into parts in the
SPA with specific parts belonging to specific persons and the common property
belonging to all sectional owners.
Unity of interest
refers to the situation where the period and nature of the estate must be one or the same. There can be no joint
ownership where one holds a lease and the other holds the fee simple or the
absolute proprietorship. Hence, a conveyance of dispositions in joint ownership
may be made only by both, or all the joint proprietors.
Under the SPA the
period and nature of the estate is the same. Also a conveyance of the portions
of the common property can only be made by all the unit owners.
Unity of title refers
to the requirement that joint owners must be created by the same instrument or act. This is the case under the SPA. Joint
owners are created by the SPA.
The most important
consequence of joint ownership is that the right of survivorship arises. This
means that on the death of one joint proprietor his share passes , not to his
personal representatives but to the surviving
proprietor.
The SPA differs in
this regard. On the death of a unit owner, his unit or units and his share of
the common property will devolve to his estate.
iiiiiiiiiii.
Common ownership
Common ownership is
proprietorship of separate but undivided shares in the land. Here there is no
right of survivorship. Only the unity
of possession is essential. A
proprietor in common has no power to deal with his undivided share in favour of
any person other than another proprietor in common of the same land, but such
consent shall not be unreasonably withheld.
Proprietorship in
common ceases on partition or sale. Partition may be effected on the
application of any one or more of the proprietors or of any person in whose
favour an order has been made for the sale of an undivided share in the land in
execution of a decree. It is completed by closing the register of the
partitioned parcel and opening registers in respect of the new parcels.
The preceding is what
essentially happens upon registration of the sectional plan as spelt out in sub
sections 5 (1) – (6) of the SPA. Under the SPA we have a situation where we
have ownership in common of the common property and a proprietor in common
cannot deal with his undivided share of the common property in favour of any
person than other common proprietors. The proprietorship in common of the
common areas ceases on the partition of the common areas such as for individual
parking lots.
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