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From the blog

The actual process of taking a mortgage in Kenya.

An actual diary of a person who is taking a mortgage to buy a vacant plot and build a residential house on a leasehold land registered under the Registered Titles Act CAP 281 (now repealed) of the laws of Kenya.

 

Activity Start date End date Total duration Reason Persons responsible
Signing of the offer for mortgage with the bank. September 2016 January 2017 4 months Back and forth.

There are like 15 or more different conditions to be met. The bank needs to minimise its risks.

Mostly the client
Signing of the sale agreement January 2017 January 2017 20 days Most sellers prefer cash buyers Sellers lawyer
Undertaking by the bank sent to sellers’ lawyer. The seller should provide some documents to enable the transfer. January 2017 May 2017 5 months Among the documents to be provided include;

1.       Original title

2.      Consent to transfer

3.      Consent to charge

4.      Rent & rates clearance certificate.

5.       Signed transfer forms

Sellers lawyer
Tendering for a building contractor February 2017 February 2017 1 month The QS and Architect provide a blank bill of quantities and an outline drawing to enable contractors to tender. They also evaluate the tenders and award the winning contractor with consultation with the client. Quantity Surveyor (QS) and Architect
Rates clearance certificate March 14 2017 April 26 7 weeks The process is as follows;

1.       Make the application at the County offices

2.      An “Invoice” is given to the applicant

3.      The applicant pays as advised by the county Government.

4.      The applicant waits for the rates clearance certificate.

County Government
Rent clearance certificate April 11 2017 April 26 2 weeks The process is as follows;

1.       Make the application at the lands office

2.      An “Invoice” is given to the applicant

3.      The applicant logs on to itax to print a KRA invoice

4.      Applicant pays at the bank to a KRA Account and returns the bank deposit slip to lands offices for receipting.

5.      The applicant waits for the rent clearance certificate.

Ministry of lands
Stamp duty valuation April 17 2017 Still on it 2 weeks and still counting The process is as follows;

1.       Make the application at the lands office

2.      The Chief valuer allocates the request to a valuer

3.      The valuer schedules a site visit to the plot

4.      Site visit

5.      Report writing.

6.      The report is sent back to the lands office by the valuer

7.      Endorsement of the report at lands office.

8.     An “Invoice” is given to the applicant

9.      The applicant logs on to itax to print a KRA invoice

10.  Applicant pays at the bank to a KRA Account .

11. Applicant takes the duplicate of the bank payment documents to the lands office for payment acknowledgement.

Buyer’s lawyer and Ministry of lands.
Construction approvals April 17 2017 June 9 2 months Application is done by a registered Architect

Documents required;

1.       Rent & rates clearance certificate

2.      Architectural and structural drawings

3.      Official search showing that the applicant is the legal land owner.

County Government
Consent to transfer April 28 2017 20th May 3 weeks The process is as follows;

1.       Make the application at the lands office

2.      Attach a rent & rates clearance certificate

3.      Pay the prescribed fees

4.      The Commissioner of Lands grants the consent for urban properties or the Land Control board grants consent for rural land.

Can be done together with the consent to charge but transfer first then charge.

 

Seller’s lawyer
Consent to charge April 28 2017 May 20th 2017 3 weeks The process is as follows;

1.       Make the application at the lands office

2.      Attach a rent & rates clearance certificate

3.      Pay the prescribed fees

4.      The Commissioner of Lands grants the consent for urban properties or the Land Control board grants consent for rural land.

 

Ministry of lands
Transfer and charging 22nd  May 2017 26th May 2017 1.    Consent to charge

2.    Consent to transfer

3.    Proof of Stamp duty payment. Both stamp duty on transfer and on charge.

4.    Original title

5.    Sale agreement

6.    Transfer agreement

7.    Prescribed fees

Ministry of lands
Payment to the seller by the bank 5th June 2017 27th June 2017 4 weeks 1.    All the documents described in the letter of offer for mortgage

2.    Contract documents between the borrower and an NCA certified Contractor

3.    Approved drawings

4.    Original title showing the land is transferred to the buyer and charged to the bank.

5.    A current search certificate of the land.

Bank

The next series of blogs will be on the actual construction.

We hope the parties involved will be gracious enough to provide photos in addition to the story.

A luta continua, vitória é certa” meaning, “The struggle continues, victory is certain”.

Kariùki Wawerù

PS. Kariùki Wawerù is the author of Kenya’s ONLY real estate book called “The ABC of Real Estate Investment in Kenya”. To have the book delivered to your door step, kindly call +254 723 477 035 or email info@kariukiwaweru.com

 

1 comment

  1. That is an awfully slow process and I wonder which bank your reference was dealing with.
    It should ideally take a maximum of 90 to go through a mortgage transaction from start to end.

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