Sale agreement

The sale agreement is the first binding document in most Kenyan land and house purchases. It comes after the buyer's searches and before the transfer, and it is usually drawn up by the seller's advocate and checked by the buyer's.

It must be in writing. The Law of Contract Act and the Land Act both say no one can sue on a contract to sell an interest in land unless it is in writing, signed by all the parties, and each signature is witnessed by someone present at the signing. A verbal deal, a receipt or a chain of text messages is not enough to enforce a land sale in court.

What it usually contains.

• the parties, with ID or company details, and the exact parcel or LR number;
• the price, the deposit, and how and when the balance is paid, often through the advocates or against a bank's undertaking;
• the completion date and what each side hands over on completion: the original title, the signed transfer, consents, clearance certificates and vacant possession;
• who pays which costs, such as stamp duty, valuation, registration and legal fees;
• conditions, such as Land Control Board consent or the buyer getting a mortgage;
• what happens if either side defaults.

The Law Society Conditions of Sale. Many Kenyan agreements say the sale is subject to the Law Society of Kenya Conditions of Sale, so far as they do not conflict with the agreement itself. These standard terms fill gaps the agreement leaves. Courts have applied them to hold that a party who wants to end the sale for the other side's delay must first serve a completion notice giving a final period to complete.

Agricultural land. Under the Land Control Act, a sale of agricultural land in a land control area is void unless the local Land Control Board consents. The application must be made within a fixed period after the agreement is made (see the figures box), and the High Court can extend that period. The Court of Appeal has read it as a deadline to apply, not to receive the consent. The Act's definition of agricultural land broadly covers land outside municipalities, townships and trading centres, so it matters for many plots in Kiambu, Machakos and Kajiado.

From agreement to transfer. After signing, the buyer pays the deposit and the seller's side gathers consents and clearances. The property is valued for stamp duty, which is charged on its value and must be paid before the transfer can be registered. Stamp duty is charged at a higher rate in municipalities and gazetted towns than elsewhere (see the figures box). On completion the balance is paid, the transfer is lodged at the land registry, and the buyer becomes the owner only once it is registered.