Buying an Apartment in Nairobi: Off-Plan Risks, Share Certificates and Sectional Titles Explained

In short, an apartment in Kenya is held in one of three ways, and the difference decides what you own, whether a bank will lend on it and whether you will be able to sell it. A sectional title is a registered title to the unit itself and is what you should insist on. A long-term sublease with a share certificate was the old way and is now in a legal limbo. A share certificate on its own is not a title at all. Off-plan adds a fourth question, which is whether the building will be finished and whether your deposit survives if it is not. This article explains each, sets out the checks to run before you pay, and says what to do when a developer lets you down.

The moment you are in

You have found a two bedroom in Kilimani, or a three bedroom in Lavington, or a unit in a development in Syokimau which is still a hoarding and an artist’s impression. The agent has sent you a brochure, the developer has sent you a reservation form, and somebody has used the words share certificate or sectional title without explaining either. You want to know what you would be buying, whether it is safe, and what happens to your money if it is not.

Three ways an apartment is held in Kenya

An apartment is a slice of a building on a single parcel of land, and Kenyan law has had three answers to the question of how one person owns a slice.

The first and oldest is the share certificate. The land and the building are registered in the name of a management company, each buyer receives shares in the company and a letter saying the shares entitle the holder to occupy unit 4B. Nothing is registered at the land registry in the buyer’s name. The buyer owns shares in a company, and the company owns the building. A share certificate on its own is not a title to land, it does not appear on any search, no bank will lend against it, and a buyer relying on one is relying on the company’s directors behaving well for the rest of his life.

The second is the long-term sublease. The management company holds the head title and grants each buyer a registered sublease of his unit, usually for the term of the head lease less a few days, together with a share in the company. This was the standard structure in Nairobi for thirty years. The sublease is registered, it is searchable and banks lent against it, and it is the structure most apartments built before 2021 still sit on.

The third is the sectional title under the Sectional Properties Act, 2020. The building is divided by a registered sectional plan into units and common property, each unit receives its own certificate of title or certificate of lease in the owner’s name, and the owners together form a corporation which holds the common property and runs the building under registered by-laws. The unit title is a title like any other, it is searched on Ardhisasa under its own number, it is charged to a bank in the ordinary way and it is transferred in the ordinary way. This is what you should be buying.

What the 2020 Act changed, and what it left unsettled

The Sectional Properties Act, 2020 came into force on 28 December 2020 and did two things which matter to a buyer. It required all new apartment developments to be registered as sectional units, so a developer selling today is unable lawfully to sell you a share certificate and a promise. And it gave the owners of existing long-term subleases two years to convert them into sectional titles, a window which closed at the end of 2022 with no extension gazetted.

What the Act did not do is say what happens to a sublease which was never converted. Whether an unconverted sublease is now unregistrable, voidable or simply awaiting conversion has not been decided by a court as at October 2026, and registries have in practice continued to accept conversion applications after the window closed. The honest position is this. An unconverted sublease is a title with a question mark over it. Banks have noticed, and most now lend only on sectional titles. Buyers have noticed, and a unit on an old sublease sells slower and for less. So if you are buying an existing apartment, the first question to the seller is whether the unit has been converted, and if it has not, the conversion is his problem to solve before you complete, not yours to inherit afterwards. We make the sale agreement conditional on it.

Buying an existing apartment, the checks

1. The unit’s own title. Search the unit under its sectional number, not the mother title, and confirm the seller is the registered owner and the unit carries no charge, caution or restriction. Our article on verifying a title deed sets out the full method.
2. The corporation. Ask for the registered by-laws, the last audited accounts of the corporation or management company, and a statement of the service charge account for the unit. Arrears run with the unit, and a building whose corporation is broke is a building whose lifts will stop.
3. The mother title. Even on a sectional unit, the parcel beneath the building has a head title, and if it is leasehold its term and its land rent matter to you. A head lease with thirty years to run is a unit with thirty years to run.
4. Rates and rent. Rates on the unit are cleared at the county, and land rent on a leasehold parcel at the Ministry, before the registry will move the transfer.
5. Parking and stores. Confirm whether the parking bay and the store are part of the unit on the sectional plan, an exclusive use area under the by-laws, or nothing more than a habit. Many Nairobi disputes are about a parking space nobody owns.
6. Alterations. A balcony enclosed or a wall moved without the corporation’s approval is a problem which arrives with the unit.

Buying off-plan, where the risk lives

Off-plan means you pay for a unit which does not exist yet, on the strength of a developer’s promise to build it. Kenya has no escrow law for property, no requirement for a developer to hold your deposit apart from his own money and no compensation fund when he fails. Section 43 of the Sectional Properties Act requires a developer to hand the buyer the sale agreement, the by-laws, the title and the details of any charge before selling a unit, and section 57 makes the failure an offence carrying a fine of up to twenty million shillings, but nothing in the law stops a developer spending your deposit on a different project, or on the bank which charged the land before you arrived. The Banda Homes collapse took an estimated KES 1.5 billion in deposits from buyers whose only security was a reservation form, and the company had changed its name more than once along the way.

So an off-plan purchase is a due diligence exercise on the developer and the land before it is a purchase of anything, and the checks are these.

1. Who owns the land. Search the mother title. It should be in the developer’s name or, where a landowner has gone into a joint venture with the developer, the joint venture agreement should give the developer the right to sell the units and say how the landowner is paid. A developer selling units on land he does not own and has no registered right to sell is the commonest off-plan fraud in the country.
2. Whether a bank is ahead of you. A charge on the mother title means the bank owns the building before you do. It is not fatal, since most developments are financed, but the bank must have agreed in writing to release your unit from the charge on completion, and your money should be going towards the release rather than into the developer’s general account.
3. The approvals. Development permission from the county, approved architectural and structural plans, the NEMA environmental licence and registration of the project with the National Construction Authority. Ask for each document, not for the developer’s assurance. A project without approvals is a project which stops the day an inspector visits.
4. The developer. The company’s incorporation, its directors and beneficial owners from the registry, and its record. A developer whose previous projects were delivered is a different risk from a company incorporated last year by directors who ran a different company under a different name.
5. The sale agreement. A developer’s standard agreement is written for the developer. We amend it. The completion date is fixed, the penalty for delay is stated and payable, the specifications are scheduled so the finished unit is the unit sold, the defects liability period is real, the right to vary the plans is limited and any variation in size adjusts the price, and if the developer fails to complete you get your money back with interest rather than a credit note against a project which does not exist.
6. The money. This is the one which decides everything. The deposit and every instalment should be paid to an advocate’s client account and released to the developer against certified stages of construction, foundation, slab, roof, finishes, so the money arrives as the building rises. A developer who insists on receiving your money directly, up front, into his own account, is asking you to lend him the price of a flat unsecured. We do not act on those terms, and the developers who are worth buying from do not need them.
7. The developer’s advocate’s fee. Most developers require the buyer to pay the developer’s advocate for preparing the unit documents, commonly KES 50,000 to well over KES 100,000. The fee buys you nothing, because the advocate acts for the developer, and you need your own. Budget for both.

When the developer does not deliver

The building stops at the third floor. The completion date passes and the developer offers a new one. The finished unit is smaller than the one in the brochure, or the parking has gone, or the title takes three years to issue. What you are able to do depends almost entirely on what you signed and where your money went, which is why the previous section matters more than this one.

Where the agreement was properly drawn and the money sits in a client account, the remedies are real. The unreleased money comes back. The delay penalty is claimed. Where the developer will not perform, the agreement is rescinded and the deposit recovered, with interest, and where the developer holds the land we lodge a caution on the mother title to stop it being sold from under the buyers. Where the agreement was the developer’s own form and the money went into his account, the remedy is a suit for the money against a company which has already spent it, and if the company is insolvent you are an unsecured creditor standing behind the bank. The courts do order specific performance and refunds, and buyers do win, but a judgment against an empty company is a piece of paper. Prevention is the whole of the product, and it costs a fraction of one percent of the price.

Selling an apartment you already own

If you own a unit on a sectional title, you sell it as you would any land, and our article on the cost of buying sets out what each side pays. If you own a unit on a long-term sublease, expect the buyer’s advocate and the buyer’s bank to ask for conversion before completion, and start it now rather than when you have a buyer waiting, because conversion involves the corporation, a surveyor and the registry and takes months. If all you hold is a share certificate, the honest position is you are selling shares in a company, the buyer will struggle to finance the purchase, and the value of what you hold depends on whether the management company is persuaded or compelled to register the building as sectional property. It is a project, and one we run for owners as a group, because a single owner rarely has the standing to force it alone.

Costs and time

An apartment attracts the same stamp duty as land, 4 percent in Nairobi, and the same scale of advocate’s fees, both set out in our cost article. A resale on a sectional title completes in sixty to ninety days. An off-plan purchase completes when the building does, and the title issues after the sectional plan is registered, which on a well-run project is within months of practical completion and on a badly run one is a source of years of correspondence. For clients buying through the firm the checks above are included in our conveyancing fee, which is 2 percent of the price with a minimum of USD 1,000 and covers the due diligence, a written report with a go or no go recommendation, the negotiation of the developer’s agreement and the conveyance through to the unit title in your name. All fees exclude statutory disbursements and VAT.

Questions we are asked every week

My apartment has a share certificate, not a title deed. Is this a problem if I want to sell?

Yes. A share certificate is not a title to land and most banks will not lend on it. If the unit sits on a registered sublease, convert it to a sectional title before you go to market. If there is no registered sublease at all, the building has to be registered as sectional property first, which is a project for the owners together.

Is buying an off-plan apartment in Nairobi safe right now?

It is safe where the land is verified, the approvals exist, the agreement is amended and the money sits in a client account released against construction. It is unsafe where you pay a developer directly on his own form. The difference is not the developer’s reputation. It is the structure.

The developer has delayed for a year. What are my options?

Read the agreement first. If it fixes a completion date and a penalty, claim the penalty and, if the delay is long enough, rescind and recover the deposit with interest. If it does not, the position is weaker and turns on the general law of contract, which is why the agreement is negotiated before signing rather than read afterwards.

Is it possible to get a mortgage on an apartment?

On a sectional title, yes, from any bank. On a long-term sublease, from fewer banks each year. On a share certificate alone, in practice no.

Who pays to convert a sublease to a sectional title?

The owner, and on a sale the seller, since it is his title being regularised. We make the sale agreement conditional on conversion or adjust the price for the buyer to carry it.

Do I need Land Control Board consent to buy an apartment?

No. The Land Control Act applies to agricultural land, and an apartment in a municipality is not agricultural land.

I am abroad. Is it possible to buy an apartment in Nairobi without travelling?

Yes, under a registered power of attorney with your advocate running the checks and the money in the client account. Our article on buying property from abroad sets out the process.

Next step

Send us the developer’s brochure and reservation form, or the seller’s title and the unit number, by e-mail to peter@pmlaw.co.ke or WhatsApp through +254 714 644 080. We reply within one working day with the checks the purchase needs, what the unit is held on and a fee quote. Nothing is charged until you instruct us.

Peter Maina is a Partner of Peter Maina & Company Advocates, Hazina Towers, Nairobi. He is an Advocate of the High Court of Kenya practising in conveyancing and real estate, corporate and commercial, and capital markets law, and acts for buyers, sellers and developers of residential property in Nairobi and the coast.