Do you own an apartment, flat, maisonette or a town house? Have you complied with the new sectional properties laws? Do you know that the deadline for compliance is December 2022?
The Sectional Properties Act, No. 21 of 2020 and the Sectional Properties Regulations, 2021 are fairly new laws that provide for issuance of sectional titles (certificate of lease/title) to individual proprietors of offices, flats, masionettes, apartments or townhouses. Among the provisions of the Act, is requirement to convert the existing long term sub-leases to sectional titles (certificate of lease).
Below is an analysis of frequently asked question in relation to the conversion?
What process will be involved in the conversion?
The process will entail:
- Preparation of a sectional plan (it is a geo-reference plan of the units constituting the building erected on a parcel of land) by a licenced surveyor. The sectional plan will be endorsed by a licenced surveyor, the developer/ owner (s) of the units as case may be, the county government and the land administration officer who will confirm the land rent for each unit described in the sectional plan.
- Lodging of the application for the conversion through the prescribed form. The application will be accompanied by the properly endorsed sectional plan, the original certificate of lease over the mother property and the registered long term sub-lease. The production of the original certificate of lease will be waived in certain circumstances.
- The registrar on receipt of the application for conversion shall register the Sectional Plan in the Sectional Plan Register, close the register of the mother title, open specific registers for each unit described in the sectional plan and thereafter issue as is appropriate certificate of lease(s) to individual proprietors of the units. The Certificate of lease will indicate the ownership percentage by an individual proprietor over the common areas.
Notably, the Land Registrar will be under obligation to share with the relevant county government the registered sectional plan for the purpose of determination of payable rates by each individual proprietor of a unit.
What will happen to the existing management companies?
There will be an application for registration of a Corporation to be registered in the Corporation Register to be opened by the Land Registrar. The Corporation will assume the roles of the management company. The Management Company shall transfer its assets and liabilities to the Corporation within one year from the date of registration of the Corporation. The Management Company will later be wound up.
Is there a time limit for initiating the conversion?
The long term sub-leases are required to be converted within a period of two (2) years from the date of commencement of the Sectional Properties Act, 2020 . The Act commenced on 28th December, 2020.
Are there any long term sub-leases that are exempted from conversion?
The Sectional Properties Act, 2020 provides that the conversion will be mandatory where:
- All the units have been transferred to the respective owners and the reversionary interest has been transferred to the management company to hold in trust of the owners of the units;
- All the units have been transferred to the respective owners and the reversionary interest is by written agreement intended to be transferred to a management company and to be held in trust for the owners; or
- Part of the units have been transferred to the respective owners and the reversionary interest is by written agreement intended to be transferred to a management company to be held in trust for the owners.
Who is eligible to make an application for conversion?
It will be the management company, the developer, the owner (s) of the respective units or an encumbrancer of the mother title, as the case may be.
Conclusion
In conclusion, the Sectional Properties Act, 2020, aims to ensure that through conversion, the ownership of apartments, offices, townhouses, flats or masionettes is through a certificate of lease/title issued to individual proprietors of the units. Notably, developers carrying out new development projects will also be required to process sectional titles (certificate of leases/title) for individual proprietors of the units.
The Firm of JMK Partners Advocates is endowed with a team of advocates who together with its allies of surveyors and other key professionals in the conveyancing law field are capable of offering the service of conversion to catch up with the law .
This article is for informational purposes only and should not be taken to be or construed as a legal opinion. For more insights, please do not hesitate to contact Jane Makena Kirimi (jkirimi@jmakadvocates.co.ke) or Faith Karanja (fkaranja@jmkadvocates.co.ke)