Of Certificates and Ballots

Guest post by Samuel G. Njenga

Did u know that the Kenyan Government only recognizes title deeds and allotment letters as bona-fide documents to show proof of ownership of land? And by the way, from our previous lessons, the allotment letter is just an offer and the expectation after receiving the offer is to accept it by way of paying the charges therein.

So, when you purchase a plot from a land buying company and all you receive is a certificate from the said company, then please take note that the government does not recognize that you own the plot. In fact the agreement may only say that you own a plot excised from the mother title so and so.

The origin of these certificates and ballots was by land buying companies whereupon the company would buy a big chunk of land, or would be allotted by the government. The shareholders of the company would then buy shares and you’d find a share would mean one or several parcels of land. Ideally, the shareholders would ballot for the available pieces, hence the ballot card and numbers. Thereafter, they’d pay some charges to be shown the parcel (s) and process the titles via the buying / ranching company. We have heard of Embakasi, Githunguri, Kihiu Mwiri, Kiganjo, Dandora farmers, Mboi Kamiti, Nyakinyua etc, all ranching companies that would apply this concept. Till today, you’ll find members who never paid the requisite charges to acquire title deeds still holding on to original documents (very old receipts, ballots & certificates) as proof of ownership. I once saw a mzee who had framed a certificate and held it so dear it was kinda comical. But then, they are / were original owners and any sale would mean a transfer is executed at the company offices.

Fast forward to today. Some guys will buy huge chunks of land, subdivide physically and sell using certificates. My biggest question has always been why a serious investor in land would behave like that. But purchasers are also to blame; why do you buy a plot with a certificate worst of all from an individual? This is plainly lazy on the part of the guy selling.

In some cases, the concept is acceptable like the Mhasibu case where they sell a concept and members buy into the concept. When cash enough to commit to the deal has been received, the deposit is paid and the balance is paid upon completion by those interested. Title processing comes much later after members have fully paid and subdivision is completed. Notice the advantages of such a concept in the fact that members fully enjoy economies of scale because the bigger the land, the cheaper it becomes. Again, when well negotiated, the members acquire the plots at a cost which is way below the market prices.

For the former case where an individual just buys a huge chunk and sell plots with certificates, take note of the risks therein:

1. For the individual / company selling, if they decide to use the land as collateral, who would stop them? I have heard cases where dubious fellows use the land as collateral only for the purchasers to be left in a fix when the fellow defaults. You’ll end up lining up with a bank somewhere where the bank claims lenders interest and the purchasers claim purchasers’ interest.
2. For the purchaser, you can never use the land as collateral because no bank will accept those certificates. The ownership of that property only reaches the purchaser upon transfer of the title in their name.

I have also witnessed interesting cases especially in Ruiru (Murera Area) where guys subdivide land into tiny plots measuring 60ft by 40ft and sell using certificates. What purchasers should know is that you can never get a title with that size of a plot around that area. In fact the smallest piece you should buy must be a minimum 40ft by 80ft or equivalent area. My advice is that we avoid these certificates at all cost. However, whenever purchasing any land in those schemes, then it is wise to demand for those original documents as part of due diligence.

Next we’ll look at joint property ownership and the legal implications.

What is a FAKE TITLE DEED?

Guest post by Samuel G. Njenga

A deed is a signed agreement especially about the ownership of property or legal rights. A Title deed is a legal document providing somebody’s right to property and subsequently ownership.

Then what is a deed plan? This is a signed plan by the Director of Surveys showing the precise particulars of a surveyed piece of land. It shows the details as in the shape of the plot, the distances and bearings all-round the plot, scale of plotting, Deed plan number, land reference no., size of the plot in hectares, signature of the Director of Surveys, the date of authentication by the Director of Surveys and above all it shows if the plot is a New Grant or an extension of lease. This is practice is under the provisions of Registration of Titles Act (RTA). This deed plan once it is duly prepared, it is attached to a certificate defining the current owner and any endorsements by the relevant Registrar in the event the property has changed hands or there are encumbrances therein whatsoever relating to the plot.

What about a mutation? Under the Registered Land Act (commonly referred to as Cap 300) the mutation form shows how a bigger land (mother) mutated into smaller pieces and the details of the proprietor (Names, ID, box number and signature). It further shows the date the surveying was done. It also details the subdivision details (existing roads, LR numbers of the resultant plots, the exact measurements of the plots and their areas in hectares). Other signatures therein include the one of a licensed / district surveyor and the land registrar who prepared the resultant titles. This document is ordinarily forwarded to survey of Kenya for purposes of amending the RIM (Registry Index map) which basically keeps track of all subdivisions in a specific area.

Then what is the meaning of the word “fake”? To make something false appear genuine.

From the foregoing therefore, a fake title deed is a false replica of a genuine Title deed where it could have all the attachments but does not relate to any physical piece of land. Equally it purports to confer a right that doesn't exist.

In early 1990's there was the infamous 13th floor of Ardhi House where false documentation was done to support surveys and issuance of Title deeds by the unsuspecting authorities. This floor was in reference of a room in River Road Nairobi. After all Ardhi house goes up to 12th floor. The fraudsters could therefore generate documents including allotment letters, Part Development Plans (PDP) and all that appertains to excision of land from the Government land (GL). They could even go ahead and file these documents in the files of the Ministry of lands using inner house staff of the Ministry at a small fee. That is the point where corruption sets in the process. It even becomes difficult for the Ministry to trace the entry point of the fake documents in the Ministry’s genuine files. Where allocation of a genuine plot is substituted with the “fake” one it becomes even more complex to unearth the conversion stage from a genuine Title deed to a fake one.

Would a naked eye be able to identify a fake title? From the aforementioned info, it gets very tricky because most fake titles are replicas of the original, meaning the details therein are the same. How then can you tell it is fake? It is pretty hard, but the easier approach is to tell a fake owner because obviously the ‘owner’ should have other document especially the ID card. We also have document experts who can verify the title. Most security companies / experts can verify IDs. Banks when financing land deals use experts to detect forgeries of titles and IDs. If you carry out proper due diligence you should get to know if the owner is the real one and if the documentation is proper.

By the way, other than fake titles, whenever then you transact with plots, take time to carry out proper due diligence to establish the history and more importantly the conception process of the plot. Only then you will tell the plot was grabbed or was acquired the right way. Else you could invest on a road reserve where caterpillars of the Ministry of Roads will be your obvious guests. In this case no compensation by the state will come your way as the rights of the society surpasses individual interest.

A green card is a document that holds original records of all transactions relating to a piece of land/plot. This means at the issuance of a new title, it must be preceded by opening a card for it. Any subsequent transactions relating to the plot/land are recorded there. Normally when a subdivision is done, a green card will be opened for each sub-plot  Maybe the seller had reached the stage where the card had already been opened but the title not yet issued. However, that is the last and the easiest process when subdividing land. The green card is applicable to the registered Land Act and is resident at the district land registry level.

We also got the white card applicable to Registration of Titles Act, mostly leases and is resident at Ardhi house as well as at the district level; they are usually put together in binders.

Finally, do you know that an official search at the land registry office is not sufficient due diligence?? I’ll expound more in the next topic as we look at how to carry out a comprehensive due diligence you can carry out to protect yourself from getting conned when purchasing land.

Our next lesson will be on paying due diligence before investing in real estate.