KENYA Law and Practice Contributed by: Anne Kinyanjui and Bonface Abuya, DLA Piper Africa, Kenya (IKM Advocates)
2.4 Real Estate Due Diligence The purchasers’ advocates conduct due dili - gence as follows: • review the title document to confirm the land - owner and property details; • conduct a title search at the land registry to confirm the property details, including exist - ing encumbrances; • undertake a search at Survey of Kenya to confirm the boundaries and permitted use of the property – the purchaser may also appoint a surveyor to identify the property on the ground and confirm the boundaries and size; • peruse the report by the Commission of Inquiry into the Illegal/Irregular Allocation of Public Land, 2003 to ascertain whether the property is adversely mentioned; • peruse all notices published by the NLC to ascertain whether the title is due for revoca - tion due to any illegalities in acquisition; • peruse the gazette notices published by the Ministry of Lands and Physical Planning to ascertain whether the property is listed for conversion; • ascertain whether the property falls under the SPA and, if applicable, whether sectional titles have been or will be obtained for units of the property; • physically inspect the property to confirm the absence of squatters, suitability for purpose and compliance with environmental laws; and • perform searches on the seller to confirm identity and capacity to contract – this may include a company search, where applicable. Increasingly, purchasers are also instructing professionals such as surveyors and planners to undertake in-depth due diligence over prop - erties to determine whether properties are on a road reserve, airport land, forest land or public
utility land and to confirm beacons and bounda - ries. 2.5 Typical Representations and Warranties Representations and Warranties On the purchaser’s insistence, the seller may issue representations and warranties to the effect that: • the seller is the legal owner of the property; • the seller has full authority to enter into the contract for sale; • the property is not situated on public land or in a buffer zone or road reserve; • the seller is not engaged in any litigation relat - ing to the property; • there are no notices issued by any govern - mental authority for compulsory acquisition of the property; and • the seller is not in breach of environmental laws. Representations, warranties and their surviv - al periods are not prescribed by law; they are negotiated by the parties. A seller may cap their liability as at the date of the agreement for sale, while a purchaser may negotiate to extend the seller’s liability until the date of transfer or a rea - sonable period after the date of transfer. A seller may also cap their financial liability to the pur - chase price amount. Enforcement of Representations and Warranties The agreement for sale gives the purchaser the option to: • terminate the agreement in the event of mate - rial misrepresentation or breach of a warranty; or • claim damages if the breach is not material.
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