CONSENTS & CERTIFICATES; WHY SO MANY IN A PROPERTY TRANSACTION!
CONSENTS & CERTIFICATES; WHY SO MANY IN A PROPERTY TRANSACTION!
Most people that have been involved in a real estate transaction, will probably resonate with the title of this article. For those yet to make that step to finally acquire that dream piece of real estate, it’s never too early to understand what consents and certificates are, and why they are very necessary to your transaction.
Simply put, a consent refers to an irrevocable written permission of the relevant Authority, Proprietor, Manager or any other interested person that is required under the laws affecting registration of land, before any dealing with respect to a specific piece of land can be lawfully registered.
A certificate, on the other hand is an official document confirming that certain conditions under which that property is owned have been complied with.
The logic behind the requirement of these certificates and consents is varied. For instance, before any document is registered in connection with certain properties, the owner will be required to produce a rent clearance certificate as well as a rates clearance certificate. This ensures that the concerned government departments are paid all monies due to them in a timely manner.
Consents on the other hand serve to offer validity to an intended transaction or modification in respect of a property. The party issuing the consent, had it not so been issued, would otherwise have a right to challenge the legitimacy of the affected transaction. Before a property owner can either transfer, charge, lease or subdivide their property, they shall be required to obtain the consent from the respective authority/ person. The most common types of consents are:
- National Land Commission consent
- Land Control Board Consent
- County government consent
- Lessor’s consent
- Management company’s consent
- Mortgagee’s/ chargee’s consent
- Spousal consent
With this brief introduction in mind, we will now look at the various certificates and consents one by one, as well as the properties and transactions that they affect.
The rates clearance certificate
This is a certificate issued by a county government, and which confirms that all property rates in respect of a piece of property have been paid. It is a mandatory requirement where a person wishes to sell their land, and is also required in order to register a long term sub-lease with respect to land. Only properties that attract land rates will require this certificate. Therefore, most properties outside of cities, municipalities and townships will be exempted from the requirement.
The rent clearance certificate
In the same way that the rates clearance certificate confirms that all property rates are paid, the rent clearance certificate is a confirmation that no land rent is outstanding in respect of property. This applies to land that is held under a lease from the government, under which lease the proprietor is required to pay a certain amount of rent. The clearance is required to sell such land, or in order to use it as a security for a loan.
Consent of the National Lands Commission
This applies to land that is leased from the national government. The proprietor of the land will be required to first obtain the consent before either selling, sub-leasing or using their property as a loan security as in the case with a mortgage.
Land Control Board consent
This is a protectionist measure introduced by law so as to prevent unsustainable sub-division of agricultural land. It follows therefore that before a proprietor of such land can either sell, subdivide or charge such land, they will have to first obtain the consent of the local Land control board. An owner therefore needs to be aware of the relevant board in respect of the area their property is situated, and also the dates on which the board sits.
County Government consent
This applies to land that is leased from the respective county government. The proprietor of the land will be required to first obtain the consent before either selling, sub-leasing or using their property as a loan security as in the case with a charge. It is therefore important for an owner to appreciate who they have leased their land from. For properties whose titles were issued in the old local governments system, the consent will be obtained from the county government that succeeded the local authority.
Lessor’s consent
The consent will apply to where land is leased by a person other than a government.
Management company’s consent
This is usually a requirement where there is separate ownership of units within a development. This could either be apartments, office suites or town houses. The management company over the development will normally have the prerogative of issuing its consent before a proprietor of a unit can either sell or use their property as a security.
Chargee’s consent
Where a property owner has obtained a loan facility by offering their property as security, a charge is created. The lender, becomes the chargee. In future, the property owner would be required to obtain the consent of the chargee in order to effect any transaction in connection with the property.
Spousal consent
For any transaction that relates to matrimonial property (property owned by a person who is married), it is important to obtain the consent of the spouse to the registered owner. This bars the spouse from later on trying to challenge the transaction claiming they were not aware. It is however important to seek legal advice on whether the said property is actually matrimonial.
Where the property is not matrimonial, it would be wise to obtain a declaration from the spouse confirming the status.
While these are the most common types of consents, for certain other properties, additional consents may apply. These include; Kenya Civil Aviation Authority- where developments on the land pose a risk to flight paths, Kenya Airports Authority -where land is close to an airport, Trustees of National Parks- where the property is adjacent to Wildlife parks, and Chief Engineer Kenya Railways –where one is acquiring land near a railway line.
The importance of relevant certificates and consents cannot be overstated. The fact that failure to obtain, for instance, the consent of a Land Control Board, serves to nullify any agreement or arrangement between a seller and buyer, underscores the weightiness of consents whenever dealing with real property.
Similarly, failure to produce the rates & rent certificates, means a transfer of land cannot be registered. Further, the clearance certificates ensure that the buyer is not saddled with debts that were owed by the previous owner.
It therefore calls for property buyers to ensure they have received correct legal advice on the certificates and consents that are required when transacting in real property. The assurance provided by a professional, well versed in conveyancing transactions ensures consents and certificates are obtained in a timely and cost efficient manner, to give your investment the legal validity required for such a significant capital expenditure.
“Don’t ever take a fence down until you know the reason it was put up.”
― G. K. Chesterton
Writer: Ian Otieno Odongoh
Associate advocate- Karanja Njenga Advocates