Buying a charged property? Here is what you need to know
Buying a charged property? Here is what you need to know
In Kenya’s real estate transactions, the presence of a charge on land does not bar its sale. As long as ownership can be established through proper due diligence, a property whether charged or not, remains a transferrable interest. A registered charge simply reflects a lender’s interest, not a legal prohibition on sale.
It is not uncommon for buyers to hesitate when they learn that the property they intend to purchase is charged. The assumption is often that the process will stall, become entangled in bank bureaucracy, or ultimately fall through. But this need not be the case. If anything, the existence of a charge is a reminder that the asset has value and goot tile, enough to have been considered good security for a loan.
What truly matters in such a transaction is how the interests of all parties are balanced and executed:
- That the chargee is paid and consents to the discharge of their interest;
- That the buyer receives a clean title, free from encumbrances;
- And that the seller, having redeemed their debt, lawfully parts with their interest and receives the net proceeds.
With proper coordination, a sale of charged property can proceed without unnecessary friction. The law provides the framework; what is required is procedural clarity, stakeholder cooperation, and prudent timing.
So how, exactly, does one go about it?
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Disclaimer: This legal update is for informational purposes only and does not constitute legal advice. It represents our understanding of the subject matter, which may be subject to different interpretations. By interacting with this content, no advocate-client relationship is established. Karanja Njenga Advocates shall not be liable for any act or omission arising from reliance on this article. For personalized legal guidance, please contact us at info@knjenga.co.ke.