KENYA Law and Practice Contributed by: Anne Kinyanjui and Bonface Abuya, DLA Piper Africa, Kenya (IKM Advocates)
date of the agreement for sale, while a purchaser may negotiate to extend the seller’s liability until the date of transfer or a reasonable period thereafter. A seller may also cap their financial liability to the purchase price amount. Enforcement of Representations and Warranties The agreement for sale gives the purchaser the option to: • terminate the agreement in the event of material misrepresentation or breach of a warranty; or • claim damages, indemnity or other contractual remedies if the breach is not material. Representation and warranty insurance is not com - mon in Kenya. 2.6 Important Areas of Law for Investors In addition to those discussed in 1.1 Main Sources of Law , the following laws are also significant: • the Stamp Duty Act, Chapter 480, which prescribes stamp duty payable on the purchase of immovable property; • the Urban Areas and Cities Act, Chapter 275, which provides for the classification, governance and management of urban areas and cities; • county by-laws; and • the laws governing investors’ real estate invest - ment vehicles, including the Companies Act, Chap - ter 486 governing operations of companies and the Limited Liability Partnership Act, Chapter 30 (the “LLP Act”) governing limited liability partnerships (LLPs). 2.7 Soil Pollution or Environmental Contamination The starting point is the polluter-pays principal, so primary liability does not automatically attach to a buyer merely because they have acquired contami - nated property. However, a buyer may still face regu - latory and practical exposure as the current owner or occupier of the property, especially if contamination is ongoing or remediation is required for the continued use of the land. Accordingly, it is critical for a buyer to manage this risk by environmental due diligence and
contractual protections such as disclosures, indemni - ties and remediation obligations on the seller. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law Permitted Use The Physical Planning Act and county laws govern zoning and planning at the national and county levels, respectively. The use or development of land must be in accordance with the National and County Physical and Land Use Development Plans. The permitted use of a parcel of land is usually indicated on some title documents. Where this is not the case, the permitted use can be ascertained by a search at the land reg - istry or survey of Kenya, or by inspecting documents relating to the application and approval of change or extension of use. Development Agreements It is possible to enter into development agreements with relevant public authorities in order to facilitate a project; see 4.6 Agreements With Local or Govern- mental Authorities . 2.9 Condemnation, Expropriation or Article 40 (3) (b) of the Constitution allows the state to compulsorily acquire land for a public purpose, subject to the fair and prompt compensation of the interested persons. Section 107 of the LA prescribes the process of compulsory acquisition, which takes place in four stages as follows. • The pre-inquiry stage: (a) The cabinet secretary, or the County Executive Committee member of the national or county state agency, wishing to compulsorily acquire the land submits a request for acquisition to the NLC. (b) The NLC requests a verification meeting with the state agency, which provides a list of the affected parcels of land and the owners, title search details, cadastral maps of the affected areas, a resettlement action plan and a list of persons affected by the acquisition. (c) The NLC may reject the request if the constitu - tional requirements are not met. If the request Compulsory Purchase Compulsory Acquisition
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