KENYA Trends and Developments Contributed by: Abdullahi Garane, Grace Mando, Elaine Murgor and Derrick Asalah, Garane & Somane Advocates
much-needed certainty to what was previously a source of confusion and litigation. • Section 17 provides that upon registration of a sectional plan, a corporation is automatically con - stituted, comprising all unit owners. This corpora - tion owns the reversionary interest in the common property and is responsible for its management. This is a major improvement over the old sublease model, where developers often retained control through subservient management companies long after completion. • Section 43 imposes robust pre-sale disclosure obligations on developers. Before selling any unit or proposed unit (an off–plan unit), the developer must deliver to the purchaser a comprehensive set of documents, including the purchase agreement, by-laws, management agreement, title documents, details of any charges and the sectional plan. This significantly strengthens buyer protection com - pared to the limited disclosure that existed previ - ously. • The Sectional Properties Regulations, 2021 further operationalise the Act. Rules 18 and 19 provide detailed procedures for registration and related matters, while Schedule 2 sets out comprehensive standard by-laws that govern the corporation. These by-laws establish clear rules for meetings, voting, maintenance of common property, service charges and dispute resolution, creating a trans - parent and democratic governance framework that was largely absent under the old regime. Collectively, these provisions deliver greater security of title, remove developer dominance after comple - tion, standardise management and enhance transpar - ency for off-plan purchasers. However, one notable implementation gap remains: the Act mandates the conversion of all existing long-term subleases into sectional titles based on approved geo-referenced plans. Many unit owners and management compa - nies are still unaware of this requirement or have not yet complied, meaning the full benefits of the new regime have not yet reached all stakeholders of vari - ous developments across the country. General Consumer Protection Under the 2012 Act Buyers also benefit from the Consumer Protection Act, 2012, which prohibits misleading advertising,
unfair contract terms and false representations. It gives consumers the right to accurate information about the product or service and provides remedies where developers fail to deliver as promised. In the context of off-plan sales, this can cover issues such as inaccurate brochures, hidden charges or unreason - able forfeiture clauses. While helpful, this is a gen - eral statute and does not contain the specific tools required for complex, multi-year off-plan transactions such as:
• mandatory escrow accounts; • milestone-linked payments; or • developer licensing.
In practice, buyers remain heavily reliant on the strength of their individual sale agreements and the integrity of the developer. Judicial protection – evidence from the courts Kenyan courts have shown a clear willingness to pro - tect buyers when developers breach their obligations. In the 2021 case of Nizarali Pradhan Sumar & Another v VK Construction Limited , the court awarded a full refund of the purchase price, reimbursement of repair costs, and compensation for lost rental income after the developer failed to deliver units of the promised quality and standard. This decision reassures investors that judicial recourse is available and that courts will not hesitate to hold developers accountable for material breaches. Similar outcomes have been seen in other disputes involv - ing delayed completion or substandard finishes. That said, litigation is time-consuming, expensive and emotionally draining, which is why stronger preven - tive regulation remains essential. Investors should view court protection as a last resort rather than a primary safeguard. Defining features and legal characterisation of off- plan contracts In an off-plan sale, the contract is executory, and its performance depends on future events. As Dr Naar Fatiha observes in her article “The Specificity of the Off-plan Sales Contract”, the defining feature is that “the object of the contract does not exist when the
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