From many stories that we have heard and read, it is clear that many Kenyans are losing millions to land scams. With the popularity of land as an investment choice, many people are sacrificing a lot to own that piece.
And I understand them completely. Land as an asset can give you crazy returns if done right. Moreover, it provides security to your money against economic reversals such as banking crises.
To help you stay safe, here’s a simple, easy-to-understand guide on common red flags to watch out for when buying land in Kenya. I have also included some practical tips to protect yourself.
Common Red Flags to Watch Out For in Land buying
1. Questionable Identity of the Seller
- Seller declining to meet you in person — if the person selling you land is avoiding any face-to-face meetings. Regardless of any excuse, I would suggest you approach carefully. A question to ask yourself is why would a person seeking to profit from the sale of their land not want to meet you?
- If the owner is ‘unreachable,’ most conmen will tell you that the owner is too busy or works in government & can’t find time to meet you. Instead, they claim to be acting on behalf of this ‘unavailable’ owner. Please tread carefully.
- Land sale through unregistered companies — in the current age of the internet, any serious company can get registered online in a few clicks. If you notice that the seller is a company and it is unregistered, avoid further discussions. To verify the registration status of the company, get a lawyer to do a company search (CR12). This confirms if the company is in good legal standing & if it is registered.
- Suspicious & Changing Directors — In your background check, if you notice a frequent change of directors, I advise leaving the deal here. Moreover, if the directors have had previous land dispute issues, please walk away. In real estate, trust is the name of the game, & if you can’t trust them, don’t give them your money.
- Change of company name — when a company has had name changes several times, proceed with caution. Most of these companies do this to lure the public. And because their previous name has been through legal issues, they get a new one.
- Mismatching seller records — make sure that the ID of the seller matches the details on the title deed. And land records such as land rates. Or if the property has water connections, ensure the name of the person paying the bills matches the seller. If it doesn’t get a clear answer from the seller.
- Missing Consent from a Spouse — If you are buying matrimonial property, make sure the other spouse is on board. Insist on meeting them & getting to know if they okay with the decision.
2. Incomplete or Suspicious Documentation
- Seller fails to provide complete title deed — if the seller is unable to provide clean title records, stop the buying here. This is a clear sign that they can’t verify their identity. Or show how they are connected to the land. Proceeding at this point with the purchase is plainly risky.
- The seller doesn’t allow due diligence — if the seller is adamant to let you and your lawyer review crucial documents, RUN! Genuine efforts to frustrate your due diligence journey should not be taken lightly. What are they hiding?
- No Sale Agreement — you should never hand over your cash with a formalised Sale Agreement. In case of any dispute, this will cushion you as it details the terms of the transaction.
- Fake Title Deed — A fake title deed is the ‘reddest’ flag there is. You should, in fact, report this to the authorities to avoid anyone from getting defrauded in the future. To verify the authenticity of your title, conduct a land search at the Ministry of Lands.
3. Pressure to Pay Quickly
- Seller demands full payment before any paperwork — you should never pay in full before you have verified the ownership details. Or completed the due diligence paperwork. If you notice the seller rushing you to pay, it could be a red flag.
- Refusal of an arranged payment undertaking — any genuine seller would be comfortable allowing a lawyer to hold on to the funds until the sale is complete. This is what we call escrow. The lawyer, being a neutral party, will safeguard both interests. And reduces your chances of getting duped.
- Subjective refund policy — when a seller insists that there are no refunds in the deal, take extra precaution. Especially if such a clause in the sale agreement only holds you to fault. Land fraudsters are getting creative. And have found ways of profiting from contractual breaches.
4. Suspicious Ownership Issues
- A chain of brokers — brokers are really important to land buying & selling. However, if you notice a long chain of brokers that doesn’t clearly lead to the real owner, be careful. Always make sure you are dealing with the landowner directly, even if brokers are in the picture.
- Land with inheritance disputes — if the land you are buying belonged to a deceased person, always make sure that legal succession issues are completed & documented. Moreover, go above and beyond to verify if all family members involved with the deceased are okay with the sale.
In Africa, our history of polygamy can at times mean that more than one family has claim to the property. That is why you don’t take due diligence lightly. It would be problematic if, after purchasing the land, another family came forward to sue you.
- Unclear ownership details — this step necessitates a land search at the Ministry of Lands. I strongly advise checking the green records to see the full history of the land.
Are there any loans taken against it? Is there a history of disputes? This is where you learn all there is pertaining to the past of the land you are going to buy. It is like the DNA test of the land parcel.
5. No Qualified Professionals Involved
- Seller rejecting legal involvement — if the seller discourages onboarding any land professionals, be careful. Whether it is a lawyer or a land surveyor, you need their input before purchasing.
- A lawyer helps with documentation & avoiding legal pitfalls in sales agreements. They also assist in verifying title deeds, company details, & holding money as an escrow.
- A land surveyor is equally important. They help in confirming the exact size, location, and boundaries of the land. Plus, checking of the physical beacons.
