In brief

• There is no escrow statute in Kenya. A developer or seller can lawfully collect deposits with no proof of ownership, no proof of approvals, no completed construction and no obligation to hold the money separately from its own, and the bill that proposed to change this has not been enacted.
• Recovering money after a collapse is slower and dearer than most buyers imagine. On World Bank data, enforcing a contract in Kenya takes roughly 465 days at a cost approaching half the value of the claim, which is why prevention, not litigation, is the real protection.
• The one escrow mechanism that exists in Kenyan law is the advocate’s client account, where money is held separately from the advocate’s own under the Advocates (Accounts) Rules, released only against agreed conditions, audited annually, and backed by professional discipline and a statutory compensation fund.

The question arrives in our inbox in almost the same words every month, usually from abroad. Is there a way to hold the money safely while the deal goes through? Behind it sits a sensible instinct. In the United States and the United Kingdom, a property deposit sits in escrow with a neutral third party until the conditions of the sale are met, and buyers assume Kenya must have something similar. It does not. No Kenyan statute requires a deposit to be held in escrow, licenses escrow agents for property transactions, or stops a developer spending your deposit the day it arrives. This article explains what that gap looks like in practice, what the documented collapses have in common, and the one mechanism Kenyan law does provide for holding transaction money safely, which is the advocate’s client account. It is written for the buyer at home or abroad who is about to pay the largest deposit of their life to people they have never met.

The gap in the law

Kenyan law regulates almost every professional who touches a land transaction, the advocate, the valuer, the surveyor, the estate agent, and yet it does not regulate the holding of the purchase money itself. A developer selling off plan can lawfully take deposits before it owns the land, before approvals exist and before a single column rises, with no obligation to keep the money in a separate account, no requirement to prove how it is spent and no compensation fund behind it if the project fails. Proposals to change this, including an amendment bill that would have required developer licensing and protected deposits, have been made and have not become law, and the business press continues to call for an escrow statute precisely because none exists. Until Parliament acts, the position is simple and worth stating without decoration. The law will punish fraud after the event, but it does not stop your money disappearing in the first place. Whatever protection a buyer enjoys is the protection built into the transaction documents, which means it is chosen, or lost, before the first shilling moves.

What the collapses have in common

The case record is extensive and the patterns repeat. Parcels sold twice or three times on forged titles. Registration numbers that turn out to belong to land in a different county. Projects marketed with doctored drone footage and artists’ impressions aimed deliberately at buyers in North America, Europe and the Gulf, who cannot drive past the site on a Saturday. Developers who collect deposits, charge the same land to a bank, and leave the buyers and the lender holding competing claims. Companies that fold and reappear under new names, selling the next project to the next diaspora WhatsApp group. The sector’s reference case, the Banda Homes collapse, reportedly took in about KSh 1.5 billion in deposits from hundreds of buyers. And when it goes wrong, the remedy disappoints, because enforcing a contract in Kenya takes roughly 465 days at a cost approaching half the claim on World Bank data, and a defendant with no assets makes even a victory worthless. The conclusion our practice has drawn from watching this for years is not that buying is unsafe. It is that the safety must be engineered into the payment mechanics, because nothing in the general law engineers it for you.

The advocate’s client account, and why it is different

The one mechanism in Kenyan law that does what an escrow account does is the client account every practising advocate must keep. Its rules are old, strict and enforced. Under the Advocates (Accounts) Rules [link], in force since 1966, money a client entrusts to an advocate must be banked in a designated client account, kept separate from the advocate’s own money at all times, applied only for the client’s instructed purpose and accounted for to the shilling. Compliance is not voluntary. Every advocate files an annual accountant’s certificate, breach is professional misconduct that ends careers, and behind the system stands the compensation fund the Advocates Act establishes, from which a client who loses money through an advocate’s dishonesty may be reimbursed. No developer’s collection account, no agent’s paybill number and no relative’s M-Pesa offers any of this. When purchase money sits in a client account, it is not the seller’s money and it is not the advocate’s money. It is yours, held to defined conditions, and it moves only when those conditions are met.

How a protected completion actually runs

The mechanics matter as much as the account. The deposit, customarily ten per cent, is paid not to the seller but to an advocate expressly as stakeholder, a word worth insisting on, because a deposit held by the seller’s advocate as agent for the seller may be released to the seller at once, while a stakeholder holds it for both parties until completion or an agreed failure event, and must return it if the condition fails. The balance follows the same logic. It lands in the client account before completion and is released against the complete set of registrable documents, so the seller is paid when, and only when, the buyer can be registered as owner. Between firms, the machinery runs on professional undertakings, promises between advocates that the courts enforce summarily against the advocate personally, which is why they are given sparingly and honoured almost always. For an off-plan purchase, where total protection is impossible, the same tools reduce the exposure, with staged payments released against certified construction milestones rather than a single deposit, and the agreement drawn so that what has been paid is secured, so far as the project’s structure allows, against the land itself. The buyer who signed our purchase protocol in the guide to buying land from abroad has already met this architecture, and a registered power of attorney, explained in our article on signing Kenyan documents from abroad, is how it is operated from another continent.

What to ask before any money moves

Three questions, asked before payment, do most of the protective work. Who exactly will hold this money, in what account and on what written terms, and if the answer is the developer’s operating account or a director’s personal number, the answer is no. Is the deposit held as stakeholder, in those words, in the sale agreement. And what are the stated conditions for each release of funds, because a condition that exists only in conversation does not exist. A buyer who cannot get satisfactory answers to these three questions has learned something more valuable than any discount being offered for paying quickly, and the sellers our clients should be dealing with answer all three without discomfort. Our article on what a developer must have in place before taking a deposit sets out the seller’s side of the same test.

What happens next

Elsewhere in this series, our article on dual citizenship, the KRA PIN and Ardhisasa sets out the paperwork of eligibility for the buyer abroad in the order the steps must be taken. For a purchase you want protected now, the structure in this article is set up as part of the retainer, and the place to start is a conversation.

Frequently asked questions

Is there an escrow service for property purchases in Kenya?

There is no statutory escrow regime in Kenya. The mechanism the law provides is the advocate’s client account, in which purchase money is held separately from the advocate’s own funds under the Advocates (Accounts) Rules and released only against the conditions the parties have agreed.

Is it safe to send money to Kenya to buy land?

Yes, if it is sent to the right place on the right terms. Money should move into an advocate’s client account under a written retainer and a sale agreement that states when and against what documents it is released. Money sent to a seller, a developer or a relative directly has no legal protection at all.

What does it mean for a deposit to be held as stakeholder?

It means the advocate holding the deposit holds it for both parties, not for the seller, and may release it only on completion or on the failure event the agreement defines. A deposit held as agent for the seller can be passed to the seller immediately, which defeats its protective purpose.

What happens if an advocate misuses client money?

Misuse of client money is professional misconduct leading to disciplinary proceedings and strike-off, and it is prosecutable as a criminal matter. The Advocates Act also establishes a compensation fund from which a client who suffers loss through an advocate’s dishonesty may be reimbursed, a backstop no developer’s account offers.

Why not pay the developer directly in instalments?

Because no law obliges the developer to protect what you have paid. Instalments paid straight to a developer are unsecured lending to a company you cannot supervise. Staged payments released from a client account against certified milestones achieve the same cash flow for the developer while the unspent balance remains yours.

Peter Maina is a Partner of Peter Maina & Company Advocates. This article states the law as at 27 October 2026. It is general information, not legal advice. To have your purchase funds held and released through a protected completion, reach out on e-mail peter@pmlaw.co.ke or WhatsApp +254 714 644 080.