conveyancing law in kenya 2014

7/25/2019 Conveyancing Law in Kenya 2014

1/159

Joe Kadendi Wachosi Page 1

COUNCIL OF LEGAL EDUCATION

KENYA SCHOOL OF LAW

________________________

THE ADVOCATES TRAINING PROGRAMME

_______________________

CONVEYANCING

_________________

ATP 107

_______________

4TH

MARCH 2015


2/159


KENYA SCHOOL OF LAW

CONVEYANCING

(2015)

Teaching and Assessment

Teaching: The course is of ten months duration. There will be 1 x 2 hours

weekly sessions over approximately thirty (30) weeks

Assessment: 20% Coursework and 60% End of session written examinations, 20% Oral

Exams

Recommended Text Books

The books that we are recommending this year are:

1. Bowman & Tyler. The Elements of Conveyancing (Lond) 8th

Ed. Sweet &

Maxwell.

2. P.L. Onalo Land Law and Conveyancing in Kenya

3. Wanjala Smoking. Land Law & Disputes in Kenya (Nrb) Oxford University

Press, 1991

4. Robert Abbey & Mark Richards A Practical Approach to Conveyancing (Lon)

Blackstone Press 2000.

5. Tom Ojienda Conveyancing Principles and Practice. (Nbi) 2008

The following books may also be useful for further insight.

1. G.H. Treitel The Law of Contract (Lond) 11th

Edition Sweet

i. & Maxwell, 2005

2. I.C.F. Spry The Principles of Equitable Remedies (Lond) Sweet &

i. Maxwell, 1997

3. Diane Chappelle Land Law (Lond) Longman,2008

The following Statutes are mandatory

5. The Land Registration Act No. 3 of 2012

6. The Law of Contract Act (Cap 23) Laws of Kenya

7. The Registration of Documents Act (Cap 285) Laws of Kenya

8. The Sectional Properties Act No. 21 of 1987


3/159


The fol lowing Statutes are optional f or fur ther insight and reference.

1. The Laws of Property Act 1925 U.K.

2. The Land Control Act (Cap 302)

3. The Estate Agents Act (Cap 533)

4. Rent Restriction Act (Cap 296)

5. The Equitable Mortgages Act (Cap 291)

6. Landlord & Tenants (Shops Hotels & Catering Establishments) Act (Cap 301)

7. Distress for Rent Act, (Cap293) of the Laws of Kenya

8. The Auctioneers Act 1996, and the Auctioneers Rules 1997

9. The Companies Act, (Cap 486) of the Laws of Kenya.

10.

Students are encouraged to famil iar ize themselves with the provisions of the Nati onal

Land Policy for Kenya Session paper No. 3and the Constituti on 2010, The Land

Registration Bil l, the Land Bil l and the national Land Commission Bil l all of 2011.

Aims and objectives

The main objective of the course is to ensure that the students obtain an understanding of the

general principles of conveyancing law and practice and to familiarize the students with the

concepts and protocols of conveyancing. This enables the students to identify the critical stages

in a conveyancing transaction and ensure they can plan and complete all the stages of a freehold

or leasehold conveyance, including drafting. Knowledge of land Law is presupposed while

knowledge of Contract Law, Succession Law and Equity is critical.

The course is also designed to ensure that the students appreciate the role of a lawyer as the

necessary intruder in conveyancing transactions. Thirdly the course is also intended to ensure

that the students develop an appreciation of how the drafting of conveyancing instruments does

determine the legal consequences and effect of those instruments.

Most importantly, the student must be able to draft stamp and register various conveyancing

instruments and to understand all the procedures preceding registration including valuation

stamping and obtaining the requisite consents and clearances.


4/159


OUTLINE OF COURSE

A. INTRODUCTION TO CONVEYANCING

The subject introduces and covers the history of conveyancing generally, firstly in the United

Kingdom (1535) and then in Kenya from 1897. The basics in land law are covered especially the

various interests and tenures in land. The element also introduces all the applicable statutes and

their purport.

The nature debate and the conceptual framework of conveyancingis discussed.

Is conveyancing

- Contractual,

- jurisdictional or is it a

-

hybrid of both?

i. Historical Background of land law and conveyancing:

England from 1535 through 1925

Kenya 1900 through 1987 and today.

ii. Conveyancing ;definition and scope

conveyance defined; duties of a conveyancer as outlined.

conveyancing defined

Terminology used generally in conveyancing Language and form of documentation under the various land laws

iii. Applicable laws

LTA

LRA

-Law of Contract Act (Cap 23)

The formality of writing and the necessity thereof;

v. Registration

The formality of registration

Effect and import of registration

Of Leases and non registration thereof.

vi. Priority of registered documents

References


5/159


Texts : Wanjala* (supra)

(A must for those who have not studied Land Law)

Bowman & Tyler ; generally

Ojienda Chapter 1 and 2 generally

Anderson ,S Of Licences and Similar Mysteries 42 MLR 203

Statutes : Statute of Frauds 1677

Law of Contract Act (Cap 23)-S.3(3)

Case law:

Tulk vs. Moxhay (1843-60) All. E.R. 9.

JumaMuchemi Vs. WaweruGatonye (HCCC) No. 853 of 2002

Momanyi Vs. Hatimy 2003 WLR 545

Rogan Kamper Vs. Grosvenor (1977) KLR 123

MbuiVs Mbui (2005) 1 E.A 256

NBK Limited vs Wilson N Ayah and Anor (eKLR 2009) (CACA 119 of 2002).

Gatimu Vs. MuyaGathanji (1976) K.L.R 265

TengHuan Vs. SweeChuan 1992 1 WLR 113

Echaria Vs. Echaria C.A.C.A (Kenya) eKLR

B.

BASIC REQUIREMENTS IN CONVEYANCING

This element runs the student through the basic requirements of conveyancing. The student

should at the end of the element be able to appreciate the requirements of execution, attestation

and verification of signatures, as well as the need for consent, clearances, stamp duty and

registration.

i. Execution, Attestation and Verification.

ii. Clearance Certificates

iii.

Consents

Realm of controlled transactions

Other consents - Commissioner of Lands, Railways, Local Authorities, and Lessors.

iv. Stamp Duty and consequences thereof in various transactions

v. Power of Attorney(s)special, specific and general

vi. Registration.


6/159


Inside the Lands Registry

Text: Ojienda Chapter 2

Statutes:

Valuation for Rating Act (Cap 266) generally

Rating Act (Cap 267) - S.21

Stamp Duty Act generally

Land Control Act (Cap 301)S.2-9.

Law of Contract Act-S.3

LRA

Case law :

Barclays Bank PLC Vs. OBrien (1994) 1A.C. 180

Labelle Intern Ltd Vs. Fidelity Bank Ltd (2003)2 E.A 540

Mucheru Vs. Mucheru (2002) 2E .A456

Bains Vs. Chogley (1949) 16 K.L.R. 27

Articles :Moriarty (1984) LQR 376

Cooper (2003) OUCLJ 201

Hopkins,N Conscience, Discretion and Creation of Property Rights (2006) 26 Leg Studies 475

Hopkins ,N Acquiring Property Rights from Uncompleted Sales of land 61 MLR

C. THE PRE-CONTRACT PERIOD

This is a journey through the period before the execution of the contract. The role and duties of

the lawyer is explored with emphasis on sale of land.

The student is to be taken through the period before the conveyancing and be able to demonstrate

that acting on the clients instructions the student will be able to identify the clients goals and be

able to advise the client from the point of view of a seller, a buyer, a mortgagor, a mortgagee, a

lessor and a lessee. Distinction is to be made between an Advocate qua Advocate and an

Advocate qua negotiator: The Advocate is never the client. Role of other parties to a

conveyancing transaction is also discussed especially of Surveyors, Planners, Architects,

Valuers, Estate Agents, e.t.c.


7/159


The student must appreciate the necessity for a good working relationship with the client and the

need to instill confidence in the client as to his capabilities as a conveyancer.

Parties to a transaction

Purchaser - Vendor, Lessee-Lessor, Mortagee-Mortgagor, Surveyors, Planners

Advocates, Valuers, Estate Agents & their respective roles

The Initial Client Interview

Instructions and brief

Investigation of title

Pre contract inquiries and mis-descriptions

Searches, necessity of Official& Personal, historical, pre-contract, pre & post

registration Deduction of title and requisitions.

Inspection of property

References

Text : Robert Abbey & Mark Richards pp 88-158

Ojienda Chapter 4

Statutes : RTA-s.79

RLA-ss.30,36,43

GLA-s.127LTA-s.31

Legal Notices No146-153 of 2005

See also:

Estate Agents Act Cap 533

Advocates Act Cap 16Remuneration Order

Case law :

Barclays Bank Plc Vs. OBrien(1994) 1 A.C 180(on initial interview and duty to advise)

Mortgage Express Ltd VsBowerman& Partners (1996) 2 All E. R 836

Rajdip Housing Development Company vs J. WaciraWambugu CACA 4 of 1991

Mapis Investment (K)Limited vs Kenya Railways Corp. CACA 14 of 2005

Shah vsAkiba Bank Limited 2005 2KLR 424, 2006 2 EA 323

Gitwanyi Investment Limited vsTajmal Limited and 2 Others 2006 2 EA76


8/159


AG vs KCB Limited &Afraha High School (2004 eKLR)

D. THE CONTRACT STAGE

The element takes the student through the preparation and execution of the contract documents

for conveyancing purposes. An appreciation of the law of obligations or contract law is

demanded. An enforceable contract with regard to disposition of interest in land is reviewed.

The form and substance of the agreement is considered. The student is expected to make an

independent judgment in the characterization of the parties to the transaction as well as contents

of the Sale Agreement whilst being conscious to the freedom of the parties to contract as they

may wish.

Law of contract and basic requirements of an enforceable contract generally.

Drafts and engrossments.

General conditions of sale.

Law Society Conditions 1989 Edition

Special Conditions of Sale

Various Purchasing situations and obligations of Advocates.

Particulars of Sale

Property

Fixtures and fittings and the doctrines of annexation and maximum user

Consideration

Deposits, as a special condition

Nature

Stakeholders and Agents

Forfeiture

Possible Reforms

Professional undertakings, general rules of undertakings, breach and misconduct,obligations imposed by undertakings, which is bound by undertaking, ambiguous

undertakings, etc.

Completion

Completion notices and time of the essence clauses.

LSK completion - Postal or Physical


9/159


Auctions

Transmissions

Executors and Administrator

Insolvency

Court ordered transmissions

Compulsory acquisition

Texts:

Ojienda Chapter 3

Robert Abbey & Mark Richardssp52-87,261-291

Handout: Check lists for both advocate for buyer & for seller

Statutes:

Law of Contract Act Cap 23 -s.3

ITPA ss.53-55

RLA S.38 (3) & Law Society Conditions of Sale

Case law: Barclays Vs Messenger (1989) 3 All E R 492(deposits)

Universal CorpnVs Five Ways Properties (1997) 1 All E. R

MuchiraVsGesima Power Mills Ltd (2004) 2 E.A 168

E. SUBLEASES & SECTIONAL PROPERTIES

F. TRANSFERS STAGEVarious Transfer Instruments/Deeds

RLA Transfers

Indentures of conveyance

Indentures of Assignment

Leases and subleases

Deeds of transfer; ad hoc or statutory format?

Title documents (issuance, loss and replacement) Survey and subdivision sales

Development Conveyancing.

G. MORTGAGES AND CHARGES

Definitions , distinctions and terminology

charge and mortgage


10/159


equitable or legal

further and second

Duties and responsibilities of the Lenders/Borrowers Advocates. Third party

mortgages/charges

Covenants in a mortgage/charge and import thereof

Remedies of the mortgagee/chargee

under RLA

under ITPA

Reconveyances, reassignments, discharges

Statutes:

RLA- S.65

ITPA - S.58,S.69,S.98,S.100

RTA - S.46, 47, 48, 49

RLA - S.81

Case Law and Articles:

Ngeny vs. KCFC Ltd (2002) 1KLR 295

Labelle Intern Ltd vs. Fidelity Commercial Bank (2003) 2E.A. 541

Simiyuvs. HFCK Ltd (2001) 2 E.A. 540

Eros Chemist Ltd vs. Trust Bank Ltd (2000) 2 E.A. 552Maranyavs. NBK Ltd (1995-8) 1 E.A. 177

Cuckmere Brick Co. Ltd. vs. Mutual Finance Ltd (1971) 2 All R.R. 633

Sajabivs.Amreliwalla (956) E.A. C.A. 71

Aberdare Investments Ltd vs. HFCK Ltd (1999) 2 E.A. 1

Royal Bank of Scotland VsEtridge(2001) 4 All E R 449

Fehlberg, B TheHusband,the Bank, the Wife and her Signature (1994) 57 MLR

H. LEASES AND LI CENCES

Definition and Distinction

Essentials of a Lease

Implied Conditions & Express Covenants

Assignment and Determination


11/159


Regime of the Rents Acts

Duties of the Conveyancer

Texts:

Chesires Modern Law of Real Property PP.381-512

Robert Abby & Mark Richards pp 291-24

GibsonsConveyancing 20th

edpp 391-525 (Further reading)

Statutes :

RLA S.3, 45-64

RTA S.40,41,42,43,44 and 45

ITPA S.5 105-117

Rent Restriction Act (Cap 296) Laws of Kenya

Landlord & Tenants (Shops, Hotels and Catering Establishments) Act Cap 301)

Case Law:

1. Street vs. Mountford (1985) A.C.

2. Birmingham Vs. Ross (1883) 38 Ch-D 295

3. Aldin vs. Latmer 1894 Ch. 437

4. Facchini Vs. Bryson 1952 T.L.R. 1386

5. Hetch Vs. Morgan 1957 E.A. 741

6.

Runda Coffee Estate Vs. Ujagar Singh 1962 E.A. 564.7. Sykes Vs. Midland Bank Executor & Trustee (1970) 2 All .R. 471

Caveats and cautions, RTA S.57, RLA S.131,132,133,134 & 135

Easements, profits, restrictive agreements, and way leaves, extinction of interests

in land, extension of leases

I. PARTS OF A PURCHASE DEED

1. DOCUMENTS UNDER GLA, RTA & LTA

Commencement and Date, note parties and their description

Recitals

Operative Part

Covenants & Declarations


12/159


Testimonium

Execution & Attestation.

2. DOCUMENTS UNDER RLA

Parcels clause

Date

Execution & Attestation

K. CONSTRUCTION OF A CONVEYANCE DEED AND RULES GOVERNING

CONSTRUCTION OF DOCUMENTS

Specific and general rules governing construction of document

L. REMEDIES IN CONVEYANCING

Statutory,common law or equity?

Damages & Rescission

Specific performance and related equitable remedies

Statutory Rectification ,statutory damages,indemnification& other statutory

remedies

Statutory indemnity

Cautions and Caveats as pseudo remedies

Texts : I.C.F.Spry(supra)

Statutes : Section 143 RLA

Section 69 ITPA

Course I nstructors: J. Louis Onguto& E.KokiMbulu& Eunice Arwa


13/159


CONVEYANCING LAW & PRACTICE

INTRODUCTION

Conveyancing has been defined as the process by which legal title to property is transferred

(Abbey & Richards, 2000, 18).The Council of Licensed Conveyancers in England and Wales on

the other hand defines Conveyancingas the legal process of transferring a house or flat,

commercial property orpiece of land from one owner to another. Both definitions may however

be limiting as Conveyancing involves more than just drafting and registering documents.

Conveyancing may also involve a simple modification of title or even an involuntary transfer of

an interest e.g. sale by a mortgagee.It may thus be more appropriate to define Conveyancing as

the art or science of conveying or effecting the transfer of legal property or modifying interest in

relation to property by means of a (written) document. The three critical ingredients are thus the

process, the legal titleand the transferor modification.

The process is what is basically referred to as Conveyancing practice or protocol which refers

to the branch of advocacy in real property transactions or the procedural side of the coin of

which the law of property is the substantive side. The legal title or interest to be transferred or

modified must be legal in the strictest sense of the word. The transferee must be seized of a legal

title. Consequently, protocol or process will demand that a Conveyancer investigates and

ascertains that the title to be transferred or modified is legal.


14/159


Conveyance describes the document used to effect the conveyancing, and Conveyancer

describes the qualified professional or specialist lawyer retained by the parties to a transaction to

deal with the paper work and finances. His role is to represent the buyer or seller or the

mortgagor. He must however be qualified in line with the decision of the Court of Appeal in the

unreported case of National bank of Kenya Ltd Vs Wilson Ndolo Ayah & Another (eKLR

2009).

National Bank of Kenya Ltd v Wilson Ndola Ayah [2009] eKLR

In this suit the respondent prayed for, among other reliefs, a declaration that a charge and Deed

of Guarantee, both in favour of the appellant, dated 23rd

July 1990 and 17th

October, 1990,

respectively were null and void ab initio, and that the sums of money they purportedly secured

were irrecoverable. Both documents were executed by the respondent for the benefit of a

company known as Bungu Investments Ltd, and were drawn by one V. Nyamodi, advocate.

At the trial, the Court found as a fact that on the respective dates the two documents were drawn,

V. Nyamodi did not hold a current Advocates Practicing Certificate, and was therefore not

qualified to draw those documents in view of the provisions of section 34 of the Advocates Act,

Cap 16 of the Laws of Kenya.

Section 34 provides that No unqualified person shall, either directly or indirectly, take

instructions or draw or prepare any document or instrument

(a) Relating to the conveyancing of property; or

(b) For, or in relation to, the formation of any limited liability company, whether private

or public; or

(c) For, or in relation to, an agreement of partnership or the dissolution thereof; or

(d) For the purpose of filing or opposing a grant of probate or letters of administration;

or

(e) For which a fee is prescribed by any order made by the Chief Justice under section

44; or

(f) relating to any other legal proceedings; nor shall any such person accept or receive,

directly or indirectly, any fee, gain or reward for the taking of any such instruction or for

the drawing or preparation of any such document or instrument: Provided that this

subsection shall not apply to


15/159


(i) any public officer drawing or preparing documents or instruments in the

course of his duty; or

(ii) any person employed by an advocate and acting within the scope of that

employment; or

(iii) Any person employed merely to engross any document or instrument.

(2) Any money received by an unqualified person in contravention of this section may be

recovered by the person by whom the same was paid as a civil debt recoverable

summarily.

(3)Any person who contravenes subsection (1) shall be guilty of an offence.

(4) This section shall not apply to

(a) A will or other testamentary instrument; or

(b) A transfer of stock or shares containing no trust or limitation thereof.

Following the trial courts findings as aforesaid, the court concluded that the instrument of

charge and deed of Guarantee aforesaid were null and void ab initio, with the result that the

money they secured which had grown from the initial figure at Kshs. 10 million to Kshs.

57,308,137/50 was irrecoverable. The court gave judgement in terms and thus provoked an

appeal.

Mrs. V.Nyamodi did not hold a practicing certificate as at the date she drew the two documents.

She was qualified as an advocate having successfully gone through law School. However,

qualifying as an advocate is quite different from qualifying to practice as an advocate.

Neither the Advocates Act nor any other written law makes provision with regard to the validity

or otherwise of such documents. The Stamp Duty Act, Cap 480 Laws of Kenya, unlike the

Advocates Act, makes provision, in section 19, making an unstamped document inadmissible in

evidence. The Legislature, we think, not only made the document unregistrable but also made the

document invalid for any other purpose before stamping.

Section 9 makes provision for qualifications for practicing as an advocate, and the qualifications

include having in force a current practicing certificate. No person shall be qualified to act as an

advocate unless

(a) He has been admitted as an advocate; and


16/159


(b) His name is for the time being on the Roll; and

(c) He has in force a practicing certificate; and for the purpose of this Act a practising

certificate shall be deemed not to be in force at any time while he is suspended by virtue of

section 27 or by an order under section 60 (4).

The Court of Appeal held that:

It is also noteworthy that the Advocates Act itself makes provision for the recovery of the fees

paid to such an advocate. So the innocent party is reasonably covered, although in our view

provisions similar to section 19 of the Stamp Duty Act should have been included in the

Advocates Act to remove any doubt as to the validity of documents drawn by unqualified

advocates. It is public policy that courts should not aid in the perpetuation of illegalities.

Invalidating documents drawn by such advocates we come to the conclusion that will discourage

excuses being given for justifying the illegality.

A failure to invalidate the act by an unqualified advocate is likely to provide an incentive to

repeat the illegal Act. For that reason alone the charge and instrument of guarantee in this matter

are invalid, and we so hold.

GenerallyConveyancers duties are wide and varied and are not limited to merely drafting

the conveyance and registering the same.The duties include:

Advising clients on buying and selling process + effect of transferring an interest

in land

Investigating title

Drafting the K with sale details, offers, leases, transfer

Liasing with lenders, estate agents, Advocates, etc

Paying taxes e.g. Stamp duty, land rent, VAT, CGT, Rates

Keeping records of payments and finally preparing a completion statement

Perfecting the documentation including proper execution, completion and

registration

DUTIES OF ADVOCATES IN CONVEYANCING TRANSACTIONS


17/159


Generally- the role of a conveyancer is to represent the parties. Read S 34 (1) (a)of the Advocates

Act- no unqualified person shall either directly or indirectly take instructions, draw or prepare

any document or instrument relating to the conveyancing of property.

Vendors Advocate

Obtain information on:-

Full names of the parties, full particulars of the property, the price, whether any deposit is

required, details of encumbrances (if any), whether the property is vacant, expected date of

completion, prepare the sale agreement, obtain original title document from vendor, approve

transfer/conveyance, procure execution of transfer/conveyance, receive and account for the

proceeds of the sale to vendor., obtain rates, rent clearances, consents where required, obtain

discharge of charge/reconveyances.

Purchasers Advocate

Obtain information on:-finances taxes and legal costs and expenses of the conveyance,

scrutinizing of title documents, investigation of title, approving sale agreement, preparation of

transfer/conveyance and engrossing the same, attending to execution of the conveyance or

transfer where necessary, stamping and lodging of documents where necessary, obtaining and

paying the purchase price to the vendors advocates.

The worst mistake a practicing conveyancer can make is to fail to spot something fraudulent. A

conveyancer must not be negligent. Attestation of signatures without verifying could constitute

negligence. The need to verify if the practitioner on the other side is qualified is really important.

So are searches at government land registries.

A thorough understanding of the key conveyancing protocols is also important. (E.g. where

advocate for the buyer calls for original title documents and clearances without offering cheque

for purchase SUM to the sellers advocate or ensuring that requisite undertakings are given by the

buyer's financers.)

An understanding of the Law Society Conditions of sale, current practice notes and guidelines is

also important.


18/159


Conveyancing practitioners also have a duty of confidentiality to their clients. There is also the

obligation to act in the best interests of the client. There is need to verify a client's identity before

commencing any transaction particularly if the client is new or unknown to the advocate.

There is also need to ensure that there are no conflicts of interest and also to ensure one has

proper instructions from the clients. Sometimes it may be necessary to confirm your instructions

in writing at each stage of the transaction and especially just before an exchange of money or

documents. If any one writes to confirm instructions there can be no dispute at a later stage. It is

also important to keep full and detailed attendance notes record telephone conversations with the

client as well as meetings in the office or outside the office with the client. Make diary entries of

important dates such as completion dates or search priority records.

Reflection:What skills and knowledge will one need as a conveyancer?

The process of transfer or modification of interest must be by way of a written document. This is

a statutory requirement as the transfer or modification is deemed only to be complete once

registration has been effected as demanded by the relevant statute. It is noteworthy that the

transfer or modification can be to oneself [cf. Assents and transmissions].

Can an advocate act for both parties?

General principle is that one should avoid acting for both vendor and purchaser where there is a

conflict of interest or where such a conflict is likely to arise. This view has been restated by the

court in the case ofKing woolen M il ls and another v. Kaplan and Stratton Advocates6

In this case, the firm named Kaplan and Stratton had acted for both the borrower and the lender

in a borrowing transaction. The firm had prepared all the relevant documents, including the

security documents.

Subsequently, the borrower had defaulted on repayment and had questioned the validity of the

security documents. Subsequently, Kaplan and Stratton had purported to enforce the said security

and the appellant sought a grant of injunction to stop the firm. The Court of Appeal held that

since Kaplan and Stratton Advocates were aware that there was likely to arise a conflict between

the lender and the borrower, and since having acted for both parties they were in a position to be

6Civ. App. No.55/93


19/159


privy to information pertaining to the appellants case, they would not purport to enforce the said

securities to the prejudice of the appellants.It is thus evident that an advocate should not purport

to act for a client during the trial process where a conflict of interest exists or is likely to arise.

Both parties should consent.

To appreciate conveyancing protocols better one ought to be familiar with the other branches of

law dealing with real property [Land Law], Obligations [Contract law] and remedies/restitution

[equity]. An appreciation of these branches of the law is thus necessary as advice to client will

run and cross through literally all of them in any ordinary conveyancing transaction.

[Reflection: what is the relationship of the other branches of law in particular the law of contract,

the law of torts, the law of equity, the law of real property to conveyancing law and practice?]

A Conveyancer must however not only be knowledgeable but also ethical and defensive.

See: JumaMuchemi V WaweruGatonye HCCC No.853 of 2002 NBI

Momanyi V H atimy 2003 KLR 545

HISTORY

Conveyancing law in Kenya, like other branches of law has drawn its history mainly from

English Law. Up till 1535 the English medium of transferring an interest in land was vide the

primitive method of surrendering to the Lord of Manor the subject parcel of land and his

Lordship in turn granted the same to the transferees nominee. The earliest and most important

form of conveyance however was thefeoffment. This involved no formalities save in the form of

a ceremony known as livery of seisin(delivery of possession). The feoffment was an assurance

note made by thefeoffor(owner of land) that he had given his right over an estate to the feofee.

The assurance note was accompanied with aformal public delivery of possessionin the presence

of witnesses mainly feudal lords. The law then also recognized facts of leases, assignments,

exchanges and partitions. [Note the enactments of 1535 Statute of Uses and 1536 Statute of

Enrolments, the 1677 Statute of Frauds which introduced the requirements of writing, execution

and attestation, the Real Property Act 1845, Land Transfer Act 1875, Vendors & Purchasers Act

1874 and finally the most important of them all the 1925 Law of Property Act which like the

Registered Land Act Cap 300 Laws of Kenya was intended to simplify conveyancing.The 1925


20/159


statute established a formal register and also introduced state indemnity to those deprived of their

land or title.

Reflection:The conveyancing instrument to be drafted depended on the interest to be transferred

and the statutes played no role:true or false?

The history of conveyancing in Kenya can be traced to the turn of the 19th

Century. Like most

laws, the relevant statutes were also transplanted the last being the Registered Land Act in 1963

which was an even imitation of the Law of Property Act 1925 (U.K).

The first relevant conveyancing statute enacted in Kenya was the 1901 Registration of

Documents Act (RDA). Section 4 of the Act requires/d that documents conferring property

interest be registered within the month of its making to ensure its availability in evidence.

Registration of a transaction under the RDA guarantees no title but is merely evidence of the

occurrence of a transaction. Under the RDA certain conveyancing documents are still registered

to give efficacy to some conveyancing transactions. These documents include; Trust Deeds,

Powers of Attorney and Building Plans. Next was the Land Titles Act 1908 (LTA) which was

intended to help deal with the haphazard deserted parcels at the Coastal strip of the country.

The LTA also guarantees no title. In 1915 the Government Lands Act (GLA) was enacted to deal

with conveyancing and land titles in the interior hinterland. It introduced a more systematic

approach to registration and provided for Deed Plans for all parcels of land to the registered. The

title under the GLA was usually the last Indenture of Conveyance (Freeholds) or

Assignment (Leaseholds).In 1920 the Registration of Titles Act (RTA) was enacted. It was

based on the Australian Torrens system as to systematic certainty of title. It provided for

registration of and guarantee of titles. It attempted to make conveyancing simple by introducing

statutory conveyancing form albeit not mandatory.The title document under the RTA is either

a Grant or Certificate of Title or a Lease.

The Registered Land Act (RLA) enacted in 1963 tried to modernize conveyancing. The Act

borrowed heavily from the 1925 English Law of Property Act. Unlike the RTA, the RLA made

the use of statutory conveyancing forms mandatory(S.108). Thetitle document under the RLA

was a Title Deed/Land Certificate (for absolute proprietorship) or Certificate of Lease (for


21/159


leaseholds) or a Certificate of Sectional Property if it is a property under the Sectional Properties

Act. Both were issued at the request of the registered proprietor and upon payment of the

requisite fees. The Land Registration Act of 2012 was later enacted to repeal the RLA LTA

RTA GLA and ITPA.

Reflection: what is the Torrens System? Of what relevance is it today nearly 150 years since a

non-lawyer in Sir Robert Torrens cropped up with it in Australia?

FORMALITY OF WRITING IN CONVEYANCING

One cannot buy land the way one would buy a newspaper or a loaf of bread. The contract must

be in writing executed by both parties and attested. This is a mandatory statutory

requirement.1Section 3(3) of the of the Law Contract Act provide that:

(3) No suit shall be brought upon a contract for the disposition of an interest in land unless-

(a) the contract upon which the suit is founded-

(i) is in writing. (ii) is signed by all the parties thereto; and

(b) the signature of each party signing has been attested by a witness who is present when

the contract was signed by such party:

Provided that this subsection shall not apply to a contract made in the course of a public auction

by an auctioneer within the meaning of the Auctioneers Act,nor shall anything in it affect the

creation of a resulting, implied or constructive trust.

(4) subsection (3) shall not apply to a contract made in the course of a public auction by a

licensed auctioneer within the meaning of the Auctioneers Act,1996 nor shall anything in that

subsection affect the creation or operation of a resulting, implied or a constructive trust.

Under Section 44(1) of the LRAevery instrument effecting any disposition under the Act shall

be executed by each of the parties consenting to it, in accordance with the provisions of this

section. And this is by of appending a persons signature on it or affixing the thumbprint or oth er

mark as evidence of personal acceptance of that instrument.

1Section 3 of Law of Contract Act Cap 23 Laws of Kenya
http://127.0.0.1:8080/app/view_cap.asp?CapID=389http://127.0.0.1:8080/app/view_cap.asp?CapID=389http://127.0.0.1:8080/app/view_cap.asp?CapID=389http://127.0.0.1:8080/app/view_cap.asp?CapID=389


22/159


The formality of writing serves three purposes: Evidentiary, Protective and Forensic. The

formality of writing performs the forensic (of or used in court of law) function in providing

simple yet conclusive evidence of the fact of agreement. The Statute of Frauds 1677expressly

provided that the requirement of writing was intended to guard against the fraud.

Formality of writing also performs a useful evidentiary function in encouraging precision and

recordingthe result for posterity. Writing helps to avoid disputesas to what interest has been

or is intended to be conveyed. Remember too that land can generate an array of interests from its

original form in the freehold estate.

Thirdly, it is argued2 that the formality of writing performs the protective function of giving

parties a chance to reflect and think on the deal before executing a binding contract that they may

wish so shortly before the ink is dry to renegeon. It is stated that if the agreement was to be oral

there would be no time for reflection on the deal per se. This function has been reinforced further

by the requirement of independent legal advise to be given by a qualified conveyance.Under

The Evidence Act there are some agreements that must be in writing.

Reflection: Are these arguments conclusive?e.g.has writing gotten rid of fraud in

conveyancingand how often do we make sensible decisions orally?]

Formality of Registration in ConveyancingConveyancing is complete only once registration is effected. Registration is the keeping of

records of land transactions in the Lands Register. It involves registration of both the title and as

well as the interest. What is registered is usually the title or ownership to land and any instrument

dealing with land or the disposal thereof. The purposes of registration include:-

enabling the Government to keep track of user and easier collection of revenue;

simplifying dealings in land registration and also avail certainty and security of title

or tenure;

Reduction of unnecessary litigation in matters relating to land.

Enables easy dealings in land transactions

2Moriaty, 1984 LQR 376) (Ojienda,2008)


23/159


Security of tenure: A registered proprietor acquires an indefeasible tile against the whole world.

The security of tenure acquired through registration also gives the property, owner a right to

indemnity from the Government where there is fraud or an error in the Register. See LRA 81-84

Ss, but note the qualification in S. 80(1).

Reduction of unnecessary litigation: The registered owner can transact or settle his land

without the fear of being sued to challenge his title because upon registration, he acquires an

indefeasible title against the whole world.

Prevention of re-fragmentation of land: Registration helps to determine whether or not a

particular piece of land can be sub-divided because his tide details pertaining to the land, such as

acreage, will have been noted in the Register.

Facilitation of Government property tax administration: Through registration, the

Government is able to identify persons/property owners on whom to levy tax in respect of a

particular piece of land and also keep track of the Government's planning programmes.

Efficient administration and facilitation of the loan system: The security of title which flows

from registration makes it possible for property owners to obtain loans from financial

institutions. A prospective purchaser has more faith dealing with an owner whose land is

registered.

Prevention of concealed dealings in land: Registration gives publicity to land transactions.

Since the register is a public document and is therefore open to the public, it is possible to

ascertain who owns what interest in land.

Upon registration of the land or conveyance the registered proprietor acquires an indefeasible

title against the whole world [cf. Section 24 of the Land Registration Act No. 3 of 2012].

Registration is effected at the relevant Lands Registries.

Care must be taken that the conveyancing instrument is not only presented at the proper Registry

but is also signed/registered by the proper Registrar.

What is registered? Title (land) andinterest (servitudes,encumbrances,quasi-encumbrances).The

latter includes charges, leases, easements, profits, restrictive agreements or covenants3. The

3(see Tulk v-s Moxhay [1843-60] All E. R 9)


24/159


former involves the estates namely allodiums, fee-simple, freeholds and leaseholds which also

rank as limited interests.

Effect of Registration

Pursuant to Section 24 of the LRA the registration of a person as the proprietor of land shall vest

in that person the absolute ownership of that land together with all rights and privileges

belonging or appurtenant thereto; and the registration of a person as the proprietor of a lease shall

vest in that person the leasehold interest described in the lease, together with all implied and

expressed rights and privileges belonging or appurtenant thereto and subject to all implied or

expressed agreements, liabilities or incidents of the lease.

One becomes an absolute owner of the ti tle or in terest r egistered. [Reflection: How absolute is

absolute?]

Pursuant to section 25 of the LRA The rights of a proprietor, whether acquired on first

registration or subsequently for valuable consideration or by an order of court, shall not be liable

to be defeated except as provided under the Act, and shall be held by the proprietor, together

with all privileges and appurtenances belonging thereto, free from all other interests and claims

whatsoever, but subject

(a) to the leases, charges and other encumbrances and to the conditions and restrictions, if

any, shown in the register; and

(b)Overriding interest (S. 28 LRA)

See also: National Prov. Bank Limitedvs- Hastings (1964) Ch 9

Mbuivs- Mbui (2005) I E. A 256

Marigi Vs Marigi 1996 LLR 463

Ogongovs.Ogongo CACA 29/2003

Esiroyovs- Esiroyo (1973) E.A.

Effect of Non-registration

Non-registration means simply that there is no interest passedat least in rem. See however Section

30 (3)a certificate of title or certificate of lease shall be prima facie evidence of the matters

shown in the certificate, and the land or lease shall be subject to all entries in the register.


25/159


Section 26LRAprovidescertificate of title to be held as conclusive evidence of proprietorship

unless obtained by way of fraud or misrepresentation or where it has been acquired illegally,

unprocedurally or through a corrupt scheme.

See also Rogan Kamper vs. Grosvenor 1977 KLR 123, Clarke vs.Sondhi (1963) E.A.,

Merali vs. Parker (1956) 29KLR 26, Bains -Vs- Chogley (1949)

Reflections: On a proper construction of Section 30 of the LRA, rightsconcerningland give no

proprietary quality unless registeredtrue & false? cf.

S. 30(3) LRA.

Registration only creates more to the whole world and no more.

Cautions and caveats effect of,

Overriding interests

Abstract matrimonial property rights

Echariavs- Echaria C.A.C.A 75/2001

Kivuituvs- Kivuitu C.A.C.A 26 of 1985

Lord Melvin Blackburn Vs Lady Blackburn ( Malindi HCCC No. 87 of 2007)

Married Womens Property Act 1882. S. 17

Adverse possession

Wambuguvs.Njuguna 1983 KLR 172

Proprietary estoppel.

TengHuanvs.SweeChuan 1992 1 WLR 11

NB

Registration at the Companys Registry under Section 96 of the Companies Act (Cap

486) is required where a Company creates a Charge over its parcel of land. Companies

Form 214. use of,

Registration at the Registrar of Co-operative Societies.

Purpose in both instances:

- Create a secured creditor vis--vis insolvency

- Notice to prospective Debentures- holders.


26/159


Under Section 44(1) of the LRA every instrument effecting any disposition under the

Act shall be executed by each of the parties consenting to it, in accordance with the

provisions of this section. And this is by of appending a persons signature on it or

affixing the thumbprint or other mark as evidence of personal acceptance of that

instrument.

Reflections on Registration:Where is registration effected? Who effects it? When is it

deemed to have been effected? What is registration subject to? What is (must be)

registered?

INSIDE A LANDS REGISTRY:A CONVEYANCERS NIGHTMARE OR PYRRHIC?

1. Filled Valuation Forms lodged with the Collector of Stamp Duty for purposes of valuation

Particulars of property Form filled by conveyancer

Valuation for Stamp Duty Requisition Form filled by the Collector

and sent to Chief Government Valuer for valuation. This is only applicable

where the document is a transfer or Deed of Conveyance

2. Document stamped and dutypaid at the Banks (KCB/NBK) then document lodged for

registration

3. Document presented in duplicate together with all relevant requisite documents e.g. original ofthe governmentsvaluation report, consent, clearance certificate, original title,e.t.c

Fill out application for registration in quadruplicate.

Pay registration fees. 500/=

4.UponPresentation of document and a day book number given entered into a register and date

and time of presentation endorsed on the document for purposes of priority

-See Sec 27 RDA4

The time of presentation of doc ,not execution or date thereof , counts to pass interest.

5. taken to audit and Government Auditor ascertain stamp/duty,taxes-rent,rates, have been paid.

6. Left for matching with the Deed or Parcel filesfrom the strong room

4Section 27 of the RDA cap 285, the day upon which a document is presented for registration shall be deemed to be the date ofregistration.


27/159


7. Registration proper commences with the Registry- in charge of marking the documents for

action in

a register known as the A book

First is verificationof document by an officer in the registry: detection of any defects

Second is Inspectionof the title by an officer to ensure title is clear and registration can

proceed

Third is Entryof particulars of interest being acquired.

8. Document is then passed to relevant Registrar for execution and ultimate registration

Registrar vets it again and then signs in approval or rejection with reasons

9. In epilogue:

Document is photocopied (except RLA documents)

Sealed with Land Registrys Seal (except GLA documents)

Released to owner.If RTA,RDA,GLA or LTA the Registry keeps a photocopy,if RLA the

Registry keeps the original and releases the counterparts.

Reflection:Why does it take more than 14 days to complete such a simple looking process?

PRE CONTRACT PERIOD AND INVESTIGATION OF TITLE

Of Estate Agents

Ordinarily any contract of conveyance will have two parties: the Vendor and the Purchaser, the

Chargor and Chargee, the Lessor and Lessee. The third outsider is always the Conveyancer.

However most of the conveyancing transactions have also been known to have another outsider

in the form of an agent who brokers the conveyancing deal. Brokers are now statutorily

recognized under the Estate Agents Act (Cap 533) Laws of Kenya. Their role is to identify a

party to a conveyancei.e. the Purchaser or Vendor or the Financier, at a commission.

The Estate Agents Act was enacted to provide for inter alia the registration of persons who by

way of business negotiate for or act in the selling or purchasing or letting of land or buildings

erected thereon. Section 2(3)of the Estate Agents Act expressly exempts advocates from the

provisions of the said Act. Advocates do not need to be registered under Section 13to practice as

estate agents. Advocates by dint of the provisions of the Advocates Remuneration Order

Articles 27 (Sales) and Article 30 (Mortgages) can also be agents even though they do not meet


28/159


the stringent qualifications outlined in the Estate Agents Act. Advocates are exempt from the

provisions of the Act under S 2(3)(Advocates can be estate agents).

For any one to earn a commission as an Estate Agent one must be registered under the said

Estate Agents Act: See Omollo J. A. in Rajdip H ousing Development Company L imi ted vs. J.

W. Wambugu t/a Wambugu& Company Advocates C.A.C.A 4/1991.See also the case ofMapis

I nvestment (K) L imi ted vs. Kenya Railways Corporation C.A.C.A 14 of 2005and section 18of

cap 5335.

It is otherwise a positive transgression of the law to practice as an estate agent when one is not

registered6and the message passed by the Court of Appeal in the MapisCaseis that a transaction

may be declared null and void and unenforceable ex turpicausa.The commission is earned when

the transaction is actually successful and is either as agreed or per the scale provided under the

Estate Agents (Remuneration) Rules 2002.

Rajdip H ousing Development Company L imited vs. J. W. Wambugu t/a Wambugu& Company

Advocates

The seller asked the advocate to instruct an estate agent to get a buyer for property at the asking

price of 100 million. The advocate instructed the broker who got a buyer for 200 million. Then

the advocate moved a step further and managed to secure 225 million. When the seller realized

what happened he went to court and claimed unjust enrichment and instructed the advocate to

refund 25 million. The court of appeal alluded to the fact that advocates should actually earn

commission.

Facts of the case

Rajdip housing the appellant entered into a sale agreement dated March 30th

1990 to sell to

Ufundi co-operative property situated along Uhuru Highway at a consideration of Ksh. 225

million. Wambugu&Co. Advocates acted as advocate for the appellant while Mr. Satish

5 Section 18 provides(1) After the expiration of six months from the commencement of this Act or such further period as theMinister may, by notice in the Gazette, allow either generally or in respect of any particular person or class of persons(a) no individual shall practice as an estate agent unless he is a registered estate agent;(b) no partnership shall practice as estate agents unless all the partners whose activities include the doing of acts by way of suchpractice are registered estate agents;(c) No body corporate shall practice as an estate agent unless all the directors thereof whose duties include the doing of acts by wayof such practice are registered estate agents.(2) Any person who contravenes subsection (1) shall be guilty of an offence and liable to a fine not exceeding twenty thousandshillings or to imprisonment for a term not exceeding two years or to both.6Ibid


29/159


Gautama acted for the Society. It was a term of the Sale Agreement that 125 million represented

the developments and expenses and the balance of the purchase price of 100 million would be

paid by installments as stipulated in the agreement. The advocates of the appellant refused to

forward some of the money (25m) to the appellants as part of the sale price claiming that fees of

some firms needed to be settled. These included fees of Lobi firm as commission agents for the

purposes of securing a purchaser and negotiating on the purchase price of the property. The

appellant contended that the advocate had no authority to negotiate the sale of its property or to

bind it in any way without its agreement nor had it held them out as having such authority. The

advocates argued that the agreement was ambiguous and therefore extrinsic evidence was needed

to show the intention of the parties. The court was of the view that an instrument must be read

most strongly against the party who prepares it and offers it for execution. This is the rule in the

maxim verbafortiusaccipiuntur contra preferentem. Also unless otherwise shown the

presumption is that the advocates for the vendor prepare the Agreement of Sale.

Reflection: Are Advocates to be subjected to the Estate Agents (Remuneration) Rules 2002 or

the Advocates (Remuneration) Order when calculating their commissions as Advocates qua

Agents? Are Advocates deemed qualified per seunder the Estate Agents Act? What happens

when an estate agent misappropriates money deposited with him and which constitutes part of

the purchase price?

It must however be noted that the role of a Conveyancer and of the Agent must always be

separated. An Advocate must as a Conveyancer keep off the negotiations and show the least

interest. Likewise an Advocate must not allow an Agent to take over his role e.g. conduct an

investigation of the title on behalf of or for the Advocate. Besides estate agents, a conveyancing

transaction may also invite other innominateparties. A conveyancer and or a party to the

conveyance may require the services of a Valuer,an urban planner, a surveyor, an architect

to ensure the success of the transaction.

Land valuer

Land valuers must be qualified under the Valuers Act- Cap 532. They value the property

especially if the purchase is financed by a bank.


30/159


Planners (control of developments and subdivisions within local authorities)

Planners must be registered under the Physical Planners Registration Act no.3 of 1996.

Architects

Architects must be qualified under the Architects and Quantity Surveyors Act (Cap 525). Create

the architecture of the development.

Quantity Surveyors

They must be qualified under the Act above. They estimate the quantities and cost of the

materials labour and time of the development.

Land Surveyors

They must be qualified under the Survey Act (Cap 299). They determine boundaries and

mapping. They are useful when subdividing the property.

Reflection: In what instant will you advise your client to engage the services of each of the

above professionals?

Of the Initial Client Interview

Prior to the formation of an enforceable contract an Advocate will have an initial client

interview. The purpose of the initial client interview is to firstly gather all the relevant facts

pertaining to the intended transaction and secondly afford crucial advise to the client on

transactions generally and the particular transactions specifically. There is utter need to prepare

well for the interview. The facts and instructions to be ultimately obtained at the initial client

interview will depend on each transaction but ordinarily one will be interested in:-

Details of the parties: names, capacity, advise on co-ownership [cf. Barclays Bank PLC vs.

Obrien (1994) 1AC 180, Shah V Akiba Bank L imi ted (2005) 2 KLR.At the initial interview,

look at their capacities. For instance if the client is a minor, you advise the client to use a trustee.

If transferred to the minor there are repercussions because the minor will not be able to transfer


31/159


the property or deal with the property as he/she may please. Or in certain circumstances the

trustee may even misuse the property.

The issue of joint tenancies where such systems are recognized by registration systems.

Distinguish joint tenancy and tenants in common. In joint tenancies the interest is bound and if a

tenant dies then the other tenants gets the share of the deceased tenant. A lawyer can be sued if

unmarried couples are advised to take up joint tenancies. In co-ownerships if advising a

mortgagor it is critical to ask the wife to obtain independent legal advice as this came from many

common law cases like:Barclays bank PIC v. Obrien,in this case the House of Lords held as

against the court of appeal, a wife who hasnt obtained independent legal advice any such

mortgage will be void but only as against the wife. This is the law, but you ask as a legal advisor

arent you giving legal independent advice?

Details of the proposed conveyance:parcel number, fixtures, consideration. As an advocate you

need to know the plot number, if the land only is being sold or there are fixtures.

Authorization to disclose details and information about related transactions: Cf. Mortgage

Express Ltd vs. Bowerman& Partners 1996 2 Al l E R 836.The authorization from the client

that you may disclose information related to the other members in the chain or the parties. There

is the duty of confidentiality and you need permission first. You need to ascertain and get formal

authorization. If the client denies this permission what should the advocate do? Breach the duty

of confidentiality or let go of the brief. Here you try and advise the clients of the repercussions in

that if the information isnt disclosed the transaction could take longer than expected. There is a

duty by the advocate to uphold the dignity of the client, because if you keep everything in

confidence most of the time the client would come back to you. If the property is charged to a 3rd

party you ought to be in a position to disclose the amount the client is borrowing. In the case of

Mortgage Express L imi ted v. Bowerman& Partners 1996 2 Al l ER 836it was held the advocate

doesnt just protect the client but also 3rd

parties for the sake of earning fees. You shouldnt

encourage such fraud just to earn your fees.

Details on pre contract enquiries.Especially acting for seller. Here you are bound to receive pre

contract inquiries which are searches that inquire on the physical structure of the property. When

acting for the buyer at the initial interview you dont really tell your client to go and investigate


32/159


but if its the seller you even have an evaluation report. Advocates must be equipped with all

these information so that you arent sued for negligence.

Discussion on conflict of interest: when acting for buyer/ seller it is a general principle of

professional conduct that an advocate must not act for two or more clients where there is a

conflict of interest between those clients. There is no specific bar against acting for a buyer and

seller provided there is no conflict of interest. The advocate must however not be involved in the

negotiation of the sale price of the property. It is also advisable to get the written consent of both

parties for an advocate acting for both the seller and the buyer. Acting for Lender and

Borrower: Acting for lender and borrower is generally permitted provided the chargee is an

institutional lender which provides charges on standard terms in the normal course of its

activities, e.g. a bank or building society. This in the vast majority of residential transactions, the

advocate for the borrower/purchaser will be the same as the advocate for the lender

The nature of the advise you offer the client must be independentt [ Cf. Barclays Bank PlcVs

Obrien 1994 Al l E R, Royal bank of Scotland VsEtr idge 2001 4 Al l E R 449]

Discussions on fees.-All relevant client care information, together with information on fees to be

charged must be confirmed in writing at the start of the conveyancing transactions. Its possible

to agree on the advocates fees for the whole transaction. It is also important to inform the client

the right to increase the advocate's charges should the transaction prove to be unduly

complicated or protracted. In this way, the advocate does not bind themselves to a fixed

unalterable fee. It may be necessary to reassure the client by saying that in the vast majority of

cases, no increase is, necessary. An advocate must inform the client in writing the estimate of

fees and should also advise the client immediately in writing if the figure is to be revised.

Discussions on financing and financial implications of the transaction:advice on deposits,

stamp duty, undertakings

Details on the title documents:Obtain copies of the title document.

Reflection:...When men die at war it is usually because of lack of proper preparation ...Sun Tzu

300B.C.How prepared isyou for your initial interview?


33/159


What is the principle of Independent Legal Advise all about? Cf. purpose of transaction,

nature of documents as well as their terms and effect, giving client option of making the choice

and advise on liability premised on the documents

Of the Investigation of Title (and Property)

Investigation of title (and property) is the process through which a Conveyancer determines

whether the client is going to ultimately acquire a good marketable title. The Conveyancer is

obliged by practice to ensure that what is being disposed of and or what is being acquired is a

good marketable title. For three basic reasons title (and property) are investigated.

Firstlythe caveat emptor(Buyer beware) rule imposes an obligation on any person intending to

acquire an interest in property to investigate the same. A Seller is under no obligation to disclose

patent defects but he is under an obligation to disclose such latent defects as he may be aware of

[Reflection: What are patent defects? And latent defects? Can you figure out some examples of

either?].

Secondly, the well settled principle of law that a bona fide Purchaser for value without notice

acquires a good title to property unaffected by matters of which he had no notice also dictates

that the title (or property) is investigated in order for a party to have the protection afforded by

the law to such bona fide Purchasers for value without notice: see Oliver V Hinton 1899 2 Ch D

264, Section 3 of the Conveyancing Act 1881, Section 199 of the Law of Property Act 1925.

The thirdreason for investigating a title (or property) is that prudence and practice demands the

same of a Conveyancer as well as of his client. The client wants to be certain that it is obtaining a

good and marketable title. Failure to do so may result in a successful claim for negligence in the

event of loss on the part of the client. It may thus be said that investigation of the title (or

property) is part of defensive conveyancing. Vendor- deducing of title, disclosure of latent

defects: This is the responsibility of the vendor. Vendor is expected to deliver on the promise that

he has good title to the property. This duty is imposed on the vendor because it is expected that

the devolution of interest in a property is best known to the vendor.

The Vendor deduces the title by submitting an abstract of title. This is a brief history of the

property showing how the interest in the property moved from one person to another, the

encumbrances and any other thing that may affect the property. It is also called an epitome of

title in many jurisdictions- a schedule of documents and other relevant information which


34/159


constitute the title together with copies of these documents. LSK Conditions of Sale- cond. 9

requires the abstract to be presented by the vendor within 14 days of the date of the agreement.

Immediately after receiving the abstract/epitome of title it is the duty of the purchaser to conduct

an investigation of the title. The purchaser is expected to go to the following places:

Land Registry (remember the location of the registries for the various registration

Acts)

Company Registry- where the property is/was owned by a company

Probate Registry-where transfer is by succession

Local Authority- to establish planning hindrances, notices, rates payment

Survey Department to establish boundaries.

Physical Inspection of the property- to ensure the measurement, description,

boundaries, improvements etc correspond with what is in the title. Also to establish

patent defects.

Court records- if there has been a dispute over the property.

Ideally, investigation of title (or property) will be conducted prior to the contract being

executed. Post-contract investigations of title may however also serve the purposes.

[Reflections: what dangers would post-contract investigations of title pose to the Conveyancer

and or his client? Distinguish between patent defects and latent defects.]

There are basically threemediums of investigating the title or property. These are searches, pre-

contract inquiries and requisitions.

(a)Searches

Like registration, searches also shield against fraud. Searches are enquiries carried out usually

by the Purchasers or Chargees or Leassees Advocate in the government departments so as to

check ownership of the interest as well as planning, environmental and encumbrances and other

related matters which affect ownership of the interest being transferred or given and which

matters are noted or ought to be noted on the title register.


35/159


It is effectively the purposeful inspection of title records or register at the relevant (Lands)

Registry. The modern Conveyancer is more concerned with the Lands Registry Search though it

is advisable that the other searches are not ignored. Such other searches will include searches at

the Companies Registry to confirm existence of the Vendor or solvency of such Vendor, search

at the Local Authority Registry to ascertain any planning hindrances or notices search at the

Survey Department to reconfirm or identify boundaries.

With regard to the Lands Registry searches, the statutes recognize both official and unofficial or

hand (personal) searches. An official or postal search is one made by an Official of the relevant

lands Registry at the behest of a party upon payment of the requisite search fees and the results

of such official searches are guaranteed by both the registry and the Government as accurate. A

Certificate of Official Search is always issued for such searches. The personal or unofficial or

hand search on the other hand is made by a member of the public by inspecting the relevant

register, parcel or deed file availed by the Lands Registry staff. Currently only Lawyers and

Advocates are allowed to conduct personal or hand searches. The official search may have the

advantage of a government guarantee and indemnity for any loss resulting or sustained by reason

of a defective official search, but is also has its disadvantage in that the Registry staff may not be

able to discern and avail all the relevant information. Such failure to discern and avail

information may not necessarily amount to a defective search to qualify for indemnity. The

Official Search on the other hand has one great advantage that one is able to collect the

information required without discrimination.

In conducting a search one ought to get details of ownership, of special conditions, of the tenure,

of the rental, of the user, of encumbrances and quasi-encumbrances (i.e. caveats). Expect

however to meet such hiccups as missing registry deed or parcel files.A third type of Lands

Registry Search ordinarily not conducted is the historical search. This refers generally to a

search on the history of the subject parcel of land. Such history will be found in the

correspondence file and not the parcel or deed file. The correspondence file contains all the

details about the origin of each parcel of land from the allotments to any subsequent subdivisions

and indeed to the root of the title. The correspondence file is comprised of the internal

correspondence between the various sub-departments of the Lands Department. It may thus be


36/159


ranked confidential and it is important that an official request is made to the Commissioner of

Lands.

The availability of the correspondence file has however helped in discerning good and

marketable titles as was in the cases of Gitwany Investment Limited vs- Tajmall Limited

and 2 Others ( 2006 2 E A 76)and Skyview Properties Limitedvs- Attorney General & 2

Others (NBI HCCC No. 1622 of 2001 unreported) . The Court of Appeal however seems to

hold the contrary as in Pashito Holdings Limited &AnorVs Paul NderituNdungu& Others

[1997] eKLRthat one shouldnotinvestigate a title beyond the register at the lands registry. See

also Justice KimarusobiterinAttorney General Vs Kenya Commercial bank Limited ,

Afraha High School Limited & 2 Others [2004]eKLRthat historical searches are unwarranted

and unnecessary for being an affront to the principle and concept of registration.[ Reflection: do

the statutory provisions allowing official searches effectively also allow a historical search to be

conducted? Need one limit himself to statutory searches only? Are you intellectually independent

of your clients control as an officer of the court and law and thus the consequences of your

clientsacts must be viewed by you in the larger probably publics interest as well?]

The result of Searches will disclose information in relation to the Vendor/Mortgagor and or the

property. It may be necessary to disclose and discuss such information to the client as this may

impact on the decision to purchase or take the security. Good practice however demands that

you engage the other party or require the other party or his Advocates to confirm position of the

findings i.e. wills the detected encumbrances be discharged?

NB: read- s.39 RDA and s.34 LRA

(b)Pre Contract Inquiries

Pre Contract inquiries are also a medium of investigating the title (or property). They are

preliminary inquiries relating more to the physical condition of and location of the subject

property as well as the proposed contractual document itself. A Purchaser will ordinarily want to

know the physical condition and extent of the property. For this the Purchaser will conduct a

personal inspection of the property or deputize his agent (e.g. a valuer). The inspection is

conducted to help ascertain not only the value of the property but also to detect physical and

patent defects, ascertain those in occupation, ascertain the boundaries and also to check on the


37/159


fixtures and fittings, if any. Naturally these are matters not covered by searches and pre-contract

inquiries will thus be made after such physical inspection to help plug in the gaps.

Pre contract inquiries thus relate to matters touching on the physical condition of the property as

well as other matters not covered by searches. They are as important as searches. The

Purchaser, for example, buys the property as it stands and the Vendor is under no duty to

disclose any physical defects in the property. The Purchaser must be advised by the

Conveyancer of this and must be further advised that in order to protect himself or herself he or

she should have the property fully surveyed and inspected before the contract is signed. Some of

the pre contract matters one will bother himself with include development prospects and

planning permission matters of the property and adjoining property, access to the property,

boundaries of the property, water supply, physical defects detected or suspected, disputes

existing in court over property, tenants in occupation or absent, etc. The full extent of the pre

contract inquiries will depend on each particular transaction and property. When acting for the

Vendor it is important not to presume any answers to pre contract inquiries but to consult with

the client and answer accurately as possible. Answers if unequivocal and relied upon but turn out

to be untrue can lead to a suit in damages both against the client and his Advocate providing the

answers especially where the Advocate decides to step out of his role as Advocate and accepts

direct responsibility towards the third party: Gran Gelato Limitedvs- Richcliff (Group) Ltd

[1992] 1 All ER 865. See also Cross Js holding inNational Provincial Bank Ltd Vs Hastings

1965 AC 1175 that persons dealing with unregistered land must obtain same information

outside the register in the same manner and from the same sources as people dealing with

unregistered land would obtain it.

(c)Requisitions

The purpose of requisitions on title besides aiding the process of investigation of title is to help

give the Purchaser title in accordance with the contract for sale. Requisitions relate to matters

which arise not on the basis of the search or simple physical inspection of property but through

the inspection of the title document or abstract availed. The requisitions are in the form of

forthright questions arising after a perusal and deduction of the title document. Deduction will

relate to tenure or the property, execution of the title document, identity of and description of


38/159


theproperty, underpaid stamp duty, identity of the encumbrances if detected on the face of the

title.

The LSK Conditions of Sale (1989) at Condition 10 provide for the requisitions or objections to

be made after the contract has been executed and in any event not later than fourteen (14) days

after delivery of the abstract, title deed or a copy thereof. However as requisitions do not enable

the Purchaser to have a second bite of the cherry in respect of matters which were overlooked at

the time of execution of the contract, good conveyancing practice would tilt towards conducting

requisitions prior to the execution. A Vendor is however under an obligation to fully and

correctly answer the requisitions.

Additional Notes

Why do searches?

The caveat emptor rule remains a cornerstone of conveyancing. It is prudent that a buyer will

need to find our as much as possible about the subject property before contracts arc exchanged.

The seller to some extent and under common law also has a duty to disclose any material

subsisting encumbrances. .A prudent buyer needs to discover as much as possible about the

property being purchased.

This is the obligation of the buyer's advocate. The buyers advocate must conduct pre-contact

searches and all preliminary enquiries. The advocate must carry out all appropriate searches and

enquiries before advising the buyer to sign any contracts to purchase property. Advocates must

bear in mind that if they fail to carry out every appropriate search, they will be liable in

negligence for any loss suffered by the client as a result of their negligent conveyancing. The

advocate must also advise the buyer of the need for a physical search or inspection of the subject

property prior to the exchange and the signing of any contracts. In Kenya, searches can be

divided into official and unofficial searches. In all searches, nominal fees are paid.

Personal searchesentail an actual examination of the deed files or register. A personal search

may be carried out by anyone. Normally advocates use their conveyancing clerks to do this. A

search will reveal details of all transactions registered against or in respect of the title.

Official searchesconstitute of an application to the registrar of lands to supply the person

applying with certified copies of details of the register (RLA). The registry by accepting to do so,


39/159


takes responsibility of investigation of the title. Certified copies are admissible in court and -

conclusive of the entries in the register of deed file in the event of litigation.

The Significance of Searches

Searches may appear simple and routine, but they are vital for successful conveyancing.

An omission of a search could lead to unpleasant surprises. These include;

a) Discovering that documents lodged for registration cannot be registered because of

restrictive entries such as caveats, caution, prohibitions or restrictions on tide.

b) Discovering that the title is encumbered.(Charges)

c) The proposed vendor may turn out not to be the registered proprietor of the subject

property. The unpleasant surprises may turn out to be a matter of professional negligence

against the advocate. There is also the issue of embarrassment.

Other necessary searches include;

Investigations of the correspondence file to establish if Land Rents have been paid over the

years. Huge outstanding land rent arrears owing to the government by prospective vendor could

affect a sale/purchase transaction. An investigation of the status of payment of rates at local

municipal offices is also essential.

Physical Search or Inspection of the PropertyA buyer should always be advised to inspect the subject property prior to exchange or signing of

contracts. The reasons for this are five fold;

Why check the state and condi tion of the property.

In general the seller is under no obligation to reveal defects in the property. There is normally no

warranty given about the state of the property and consequently all buyers should obtain their

own survey report before contracting to purchase property. The caveat emptor rule (let the buyer

beware), applies to conveyancing transactions. In most cases, sale agreements will stipulate that

the buyers accept the property in the physical state it is in at the exchange of contracts. A prudent

buyer will therefore use the services of professional advisers such as surveyors or valuers to

assist in inspecting all the buildings.


40/159


(ii ) To check who is in Actual Occupation of the Property

This is critically important as the seller may not be the person in actual occupation of the

property and others could be entitled to occupy the property not withstanding that they are not

co-selling. It is of most importance to check that there are no undisclosed occupants within the

property who could claim rights of occupation and thereby delay or defeat completion. As well

as physically inspecting the property, a buyers advocate will also raise written enquiries about

who is in occupation (e.g. tenants.)

(ii i) To check boundar ies

A buyer will want to be sure that the contract correctly describes the property and the boundaries

on the ground are the same as those shown in the title and in the contract.

(iv) To check on ri ghts and easements affecting or benefi ting the properl y.

A physical inspection of the property will assist the buyer establish the rights of others, such as

path ways and gates. Any easements adversely affecting the property should be referred to the

seller without delay for clarification.

(v) Tocheck f ix tur es and f itt ings contracted to be sold are in the subject property just pr ior to

the exchange

The buyer will want to be sure that items to be sold actually exist and are within the subject

property. (Water tanks, electrical fence, etc)

Advice on Survey

A purchaser / mortgagee/chargee should always be advised to have a survey carried out before

exchange of contracts because of the caveatemptor principle, 'let the buyer be ware.' It is for the

buyer to discover all the physical defects in the property and these may not be apparent from the

clients own inspection. A client may sometimes be reluctant to incur additional expenses in

survey fees. It is however the advocate's responsibility to advise the client that this is money well

spent. Failure on the advocate's part to give this advice could amount to professional negligence.


41/159


A physically defective property may of course be unsafe to occupy but there are financial

implications for the purchaser as well.

The market value of a property will be reduced if a property is in poor condition and so the

purchaser may be paying more than he/she should. This may also adversely affect the purchaser's

ability to mortgage the property or sell it at a later date. There is also the danger of non-existent

properties. These are all considerations that must be drawn to the client's attention. Basic

valuation by a registered valuer constitutes one of the simplest and cheapest forms of survey. It

constitutes a visit and physical examination of the property to establish the property's value on

the open market and its physical delineation.

A valuation report is important especially if the property is to be charged to secure a loan. A

mortgagee's surveyor/valuer owes a duty of care not only to the lender but also the borrower who

relies on the report. A copy of the valuation report should be made available to the borrower.

Special considerations when valuing include; neighbouring properties, drainage, infrastructure,

location, the zoning and development policy by municipal authorities of the property area are

also key.

[Reflection: What remedies are available to a recipient of inaccurate answers to pre-contract

inquiries or requisitions?]

EXECUTION & ATTESTATION

Execution is the signing of documents the purpose of which is to authenticate and acknowledge

the same. Signature on the other hand is the writing or otherwise affixing a persons name or a

mark to represent his name by himself or by his authority with the intention of authenticating a

document as being that of, or as binding on the person whose mark or name is so written or

affixed. Initials, thumb prints (left thumb for men, right for women) are deemed to be

signatures but the mere typing of a name is not (See: Lord Denning in Goodman Vs J. Eban

1954 1QB 550, see alsoFirst Post Homes Ltdvs- Johnson [1995] 4 All. E. R. 355, Section

3(6) of the Law of Contract Act (Cap 23) Laws of Kenya). Section 44 of the LRA provide for

execution of documents.

Natural persons can sign by themselves or by their duly constituted Attorney(s). Companies

and other juristic persons will execute the document as per the provisions of their respective


42/159


constitutions, memoranda, charter or the constituting statute as necessary. Such juristic persons

may also execute documents through their duly constituted Attorneys. A close perusal of these

constituting or establishing documents or statutes is thus important. Look at sections 43-48 of the

LRA.

Whilst the actual conveyancing instruments must be signed by the proprietor or his duly

constituted Attorney, a Sale Agreement may be signed by he who has apparent or ostensible

authority and not necessarily actual authority. [ Reflection: In the recent case of Shem

ObondiVsSeemford Holdings Limited, the Court of Appeal seems to have suggested that

apparent or ostensible authority has no place in modern day commerce. Do you

agree?]Documents will be signed at the signature block which appears at the very end of the

conveyancing document. It is however prudent that to achieve the aim of execution and also to

guard against unscrupulous practitioners, parties be encouraged to initial or sign every page of

the document.

Attestation is the proper witnessing of a signature or execution. It simply means to bear witness

to a fact. The person witnessing the execution must be present as the executant ascribes his mark.

The object is to help guard against fraud and thus a party to a deed cannot attest to its execution.

A Vendor ought not witness the Purchasers signature and vice versa. So seriously is the issue of

attestation taken that the Court of Appeal in LamchandFulchand Shah vs. - I & M Bank

Limited C. A. C.Appl. No. 165 of 2000 decreed that where there is a question of proper or

improper attestation then the Advocate who purportedly witnessed the execution must be made a

party to the suit. The conveyancer must thus take care and ensure the document has been

executed in his presence. [Reflection: who should attest the execution?]. A document executed

by a company does not necessarily require to be attested: see Coast Brick vs-

PremchandRaichand 1966 E. A. and Eccon Construction & Eng