KENYA Law and Practice Contributed by: Anne Kinyanjui and Bonface Abuya, DLA Piper Africa, Kenya (IKM Advocates)
4.7 Enforcement of Restrictions on Development and Designated Use Physical Planning Laws Section 72 of the Physical Planning Act ena - bles the County Executive Committee Member for Physical and Land Use Planning to issue an enforcement notice to an owner, occupier, agent or developer of land ( “Recipient” ) if a developer commences development without a develop - ment permit or if any conditions of the develop - ment permit are not complied with. The enforce - ment notice will prescribe the remedial action to be taken by the Recipient, who will face impris - onment and/or be subject to fines if they do not comply with the notice. Environmental Laws Section 108 of the EMCA enables NEMA to issue environmental restoration orders instruct - ing the Recipient to refrain from causing harm to the environment and/or prescribing remedial action to restore the environment to its original state. The order may also impose fines against persons contravening environmental laws, or may award compensation to those affected by environmental degradation or pollution. The ELC may also issue environmental restoration orders. Section 112 of the EMCA allows courts to grant environmental easements and conservation orders to preserve environmental resources. Furthermore, part XIII of the EMCA spells out environmental offences. The consequences of committing environmental offences include rev - ocation of the relevant licences, imprisonment and hefty fines. Construction Laws Rule 28 of the National Construction Authority Regulations, 2014 empowers the NCA to set up a committee to investigate complaints against
contractors and any developments if they are suspected of contravening the law. The com - mittee may recommend the deregistration of a contractor or the revocation or suspension of its licence. Where a contractor is deregistered, all construction contracts being executed by that contractor will be terminated immediately. Dealings in Agricultural Land Failure to obtain LCB consent for the develop - ment of agricultural land may render all related transactions void. 5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets The main vehicles for investment in real estate are limited liability companies (LLCs), limited lia - bility partnerships (LLPs) and real estate invest - ment trusts (REITs). LLCs are the most common and preferred investment vehicles, but LLPs are beginning to gain traction. 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity LLCs LLCs are the most common and preferred investment vehicles, and are regulated by the Companies Act 2015. LLCs have corporate per - sonality, and the liability of the members is lim- ited. Given this, an LLC may own property, enter into contracts, and sue and be sued in the name of the company. LLCs are tax residents in Kenya and are sub - jected to tax at the rate of 30%. The taxable income is calculated as the gross revenue less allowable expenses which were wholly and exclusively used in the production of income. Subsequent distribution of dividends by an LLC
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