CONVEYANCING LAW AND PRACTICE

Bachelor of Laws Class 2006

Ndombi wa nasimiyu
Introduction:
Conveyancing is the area of an Advocate’s business that deals with the alienation of an interest in
land from one person to another by means of an appropriate instrument or document.
Conveyance is an instrument transferring an interest in land from one person to another. Examples
of conveyances are:
 Mortgage or Charge
 Transfer
 Lease
Relationship between Conveyancing and other branches of law
1. Land Law
It is right to say that Conveyancing overlaps with land law. Land law gives us the principles that
define rights and interests in land and has been referred to as “Law at Rest”. Conveyancing on the
other hand deals with procedure or the practical legal mechanisms by which those rights and
interests are transferred from one person to another. It is “Law in Motion”
2. Law of Contract
Conveyancing law and the law of contract: interests in land give rise to contractual obligations
e.g. a lease, mortgage or charge.
3. Law of Equity
The law of equity is also relevant to Conveyancing law and practice in so far as equitable rights
and remedies are concerned. The remedies include specific performance, injunctions,
rectification and rescission. If one has made an error in an instrument and that instrument has
been registered, in order to rectify the error, rectification is needed to remedy the error. It becomes
necessary to have the instrument of rectification.
Specific performance applies where there is a seller who has entered in agreement with a person to
sell land to that one person and then goes and signs another agreement with another purchaser for
more money. If the first purchaser discovers, he can go to court to seek an order for specific
performance, asking the court to compel the seller to transfer the land to the first purchaser
under the agreement for sale.
4. Succession Law
Some understanding of the law of succession is also necessary in dealing with transactions
involving personal representatives. The law operates to make it possible to transfer land
(transmission) to the beneficiaries. Conveyancing specifies the exact documents that we need
to draft in order to vest the interests of the deceased to the beneficiaries.
5. Company Law
Knowledge of company law is equally important in dealing with companies involved in
Conveyancing transactions.
SCOPE OF CONVEYANCING:
The scope of Conveyancing covers the various procedures for certain land transactions. It deals
with practical issues such as how one negotiates and concludes a lease, mortgage, charge, transfer
or other transaction and how the relationship between the parties to the transaction is determined.
Conveyancing therefore deals with the various stages of a transaction. These include:
The scope of Conveyancing then is: -
 Preliminaries
 Investigation of title e.g. searches and examination of documents of title
 Drafting – Documentation which is the legal framing of documents. It is the art of legal
drafting.
 Contractual stage – this stage involves negotiation of terms

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  Completion stage involving also registration- this is the stage where documentation is
complete and what remains is to take the documents for registration. If it is a transfer for
example the seller’s advocate should now give all the documents signed to enable the
buyer’s advocates to go and register the documents, the buyer’s advocate should now pay
the buyer’s purchase price.
 The construction or interpretation of documents
 Conveyancing may also involve litigation
Execution, attestation, stamping and registration of documents.
Conveyancing also involves the construction or interpretation of documents. For example in a lease
keeping the premises in good state of repair may mean painting the house, replace locks and so on.
This is part of the covenant to repair. It is about construing the covenant to repair.
Conveyancing may also involve litigation, e.g. where a transaction fails and parties resort to the
court process for determination and enforcement of their rights.
REGISTRATION SYSTEMS: These are forms of documentation
In Kenya we have five land registration systems:
1. Registration of Documents Act 1901, RDA (Cap 285) 1st Document
2. Land Titles Act 1908, LTA (Cap 282)
3. Government Lands Act 1915, GLA (Cap 280)
4. Registration of Titles Act, 1920, RTA (Cap 281)
5. Registered Land Act 1963, RLA (Cap 300) and the Sectional Properties Act No 21 of
1987 which is applicable under the RLA.
The form of documentation is governed or determined by the statute under which a particular piece
of land is registered.
REGISTRATION OF DEEDS AND REGISTRATION OF TITLES
The land registration systems are of two types.
1. THE REGISTRATION OF DOCUMENTS OR DEEDS
The RDA, LTA and GLA fall under this type.
The scrutiny is there but not as thorough as when one is scrutinizing a title. The State is just
acknowledging that a conveyance was registered but beyond that they are not vouching for the
validity of that transaction at all. It is just a record. The registration of deed system only serves
as evidence that the transaction took place. One here has to trace the good root of title as there
are no guarantees, it is up to one to establish the valid title of the person purporting to transfer title.
2. THE REGISTRATION OF TITLES
The RTA and RLA fall under this type
The scrutiny under a Title is thorough and the state guarantees a title. That it is a valid
document and that one can rely on it. The RLA register is clear that what you see is what you get
and one should not even worry about who had the title before unlike in the registration of deeds
where one has to worry about who owned the deed before.
The RDA 1901 was the simplest and first of all the documents dealing with land in Kenya. Section
4 talks of the compulsory registration of all those documents conferring or purporting to
confer, declare, limit or extinguish any right, title or interest whether vested or contingent, in
or above immovable property and Section 5 about its being optional. It provides that any other
document may be registered at the option of the person holding the same but the registrar require
such a document to be registered for the reason to be stated by him in writing e.g. where the
document has blank erasures, alterations which have not been attested. The documents that are
registered at the option of the person holding them include building plans, wills, powers of
attorney and deed polls.
The Land Titles Act covers only covers property at the Coast only the 10 mile coastal strip. Given
under an agreement of the Sultan of Zanzibar and the Sultan of Oman, it was available for
alienation by the British and was owned by some families who had it freehold or had freehold

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interests. Since the system of registration was rudimentary, even the way boundaries were
demarcated was rudimentary so the demarcation was not systematised.

Government Lands Act, 1915 – dealt with all the land in the hinterland. The Crown Lands
Ordinance was replaced by the GLA and any titles registered under the RDA 1901 had to be
registered afresh under the GLA. The GLA introduced a more refined system of the register where
there were deed plans in the registry.
Methods of Registration under LTA and GLA
The methods of registering is the same. Even the way the documents are drafted under these two
regimes are the same. Conveyancing is by the way of a deed, signed, sealed and delivered.
Registration of Titles Act [RTA]–
The form of documentation under the RTA follows the statutory forms. Section 33 RTA prohibits
the Registrar of Titles from registering under the Act any document or instrument which is not in
statutory form. Many advocates have borrowed some of the language and phraseology from the
GLA and LTA for example “… this instrument is made on the …. Between Susan hereinafter
referred to as the landlord on the one part and George hereinafter referred to as the tenant on the
other part.” This is English phraseology that is common in both the GLA and LTA
Registered Lands Act, cap 300 Laws of Kenya
It is different from all the other Acts, form of documentation is statutory, enacted in 1963 and it
is intended that eventually or land will come under this regime. However for purposes of
practicality we may never get all the land registered under the RLA. This Act was intended to
make it possible for any property owner under this Act to be able to transact without having to rely
overly on an advocate. Section 108 (1) is to the effect that statutory forms must be used to
register any transaction under this Act. It provides that every disposition of land , a lease, or a
charge shall be effected by an instrument in the prescribed form or in such other form as the
registrar may in nay particular case approve, and every person shall use a printed form
issued by the registrar unless the registrar otherwise permits. Therefore the law requires that
where advocates want to depart from the statutory forms, they must obtain consent from the
Chief Land Registrar to use their own format. The Chief Land Registrar may issue an approval
in the form of a letter if he is satisfied that the form meets the standards. The Chief quotes a
reference number which will always be required to be shown on the format to the effect that the
chief registrar has approved the format under the quoted number e.g. CLR 3 VOL XXIV.
The instruments must contain a true statement of the amount or value of the purchase price
or loan or other consideration if any and an acknowledgement of the receipt of the
consideration.

Procedural and Substantive Law governing various registration systems

LTA – the procedural is found in the Act itself but the substantive law is found in the ITPA and this
also applies to the GLA. For example, if one wants to know the remedies of a lender under the
GLA, they will not be found in the GLA but under Section 69 of the ITPA. The provisions
containing substantive rights are found in the ITPA.
RTA – the procedural law is contained in the RTA but where there has been a conversion, the GLA
still applies especially in relation to matters that occurred before the property was transferred to the
RTA regime. The substantive law will still be found in the ITPA. Where the RTA and ITPA are
silent on a given matter related to the land, the common law will apply.
Registered Land Act – The Act itself contains both the procedural and substantive law.
Section 163 states that:-
“subject to the provisions of the RLA and save as may be provided by any written law for the
time being in force, the common law of England as modified by the doctrines of equity shall
extend and apply to Kenya in relation to land, leases and charges registered under the Act and

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interests therein but without prejudice to the rights, liabilities and remedies of the parties under
any instrument subsisting immediately before such application.”
Section 164 provides that the ITPA 1882 ceases to apply upon first registration under the RLA
except in relation to any dealing entered into before the date of first registration. This is a
self-contained code. You don’t need to consult any other regime.
SECTION 53 RLA GIVES THE RIGHTS AND DUTIES OF LANDLORD.
AGREEMENTS IMPLIED IN A LEASE ON THE PART OF THE LESSOR.
a) To ensure quite possession and enjoyment during the period of the lease without any
lawful interruption from or by the lessor or any person rightfully claiming through
him so long as the lessee pays the rent and observes and performs the agreements and
conditions contained or implied in the lease and on his part to be observed and
performed.
b) It is an implied duty on the lessor not to use or permit to be used any adjoining or
neighbouring land of which he is the proprietor or lessee in any way which would
render the leased premises unfit or materially less fit for the purpose for which they
are leased.
c) The lessor has a duty to ensure that where any part of a building is leased it is kept in
good repair. This includes the roof, main walls and main drains, and the common
passages and common installations.
d) Where any dwelling house, flat or room is leased or room is leased furnished, the
lessor has a duty to ensure that the house, flat or room is fit for habitation at the
commencement of the tenancy.
e) The lessor has a duty to keep the premises fit for habitation if at any time the leased
premises are destroyed or damaged by fire, civil commotion or accident not
attributable to negligence of the lessee, his servants, or his licensees.

SECTION 54 OF RLA
THERE IS AN IMPLIED AGREEEMENT ON THE PART OF THE LESSEE:-
a) To pay rent reserved by the lease at the times and in the manner specified.
b) To pay all rates, taxes and other outgoings which are at any payable in respect of the
leased premises during the continuance of the lease unless the same are payable
exclusively by the lessor by virtue of any written law.
c) To keep all buildings comprised in the lease and all boundary marks in repair except
where part only of the building is leased or where a dwelling house is leased furnished.
d) To keep the leased premises in repair where part only of a building is leased or where
a dwelling house is leased furnished except the roof, main walls and main drains and
the common passages and common installations
e) To keep the furniture in good condition as it were at the commencement of the period
where the lease is of furnished premises ,fair wear and tear only excepted and to
replace such articles as are lost, destroyed or so damaged as to be beyond repair with
articles of equal value to those so lost, destroyed or damaged.
f) To permit the lessor or his agent with or without workmen or others at all convenient
times and after reasonable notice to enter on the lased premises and examine their
condition.
g) To repair or otherwise make good any defect or breach of agreement for which the
lessee is responsible and of which notice has been given by the lessor to the lessee
within such reasonable period as may be specified in the notice.
h) Not to transfer, charge, sublease or otherwise part with possession of the leased
premises or nay part thereof without the previous written consent of the lessor, but
which consent shall not be unreasonably withheld.
Where the Act is silent, ITPA does not apply but one goes straight to the common law.

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Obtain Conveyancing precedents – precedents of documents that have been registered.
Copies of precedents under each Act
Transfer under the RTA
Conveyance under the GLA
Mortgage under the GLA
Charge under the RTA
Charge under the RLA (Format approved by the Chief Land Registrar)
Lease under the GLA
Lease under the RTA
Lease under the RLA ( approved by the CLR)
Title Documents themselves.
Grant under RTA
Certificate of Title under RTA
Certificate of Lease under the RTA

EXECUTION OF DOCUMENTS AND ATTESTATION OF SIGNATURES

By execution we mean signing of the documents and by attestation we mean witnessing of the
documents.
ITPA Sections 59 and 123
RTA Sections 50-51 and 58
RLA Sections 109-110,
Section 109 provides that very instrument evidencing a disposition shall be executed by all
persons shown by the register to be proprietors of the interest affected and by all other
parties to the instrument. there is a proviso to the effect that the registrar may dispense with
execution by any particular party [other than the transferor or transferee] where he considers
that the execution is necessary.
Subject to section 124 [2] an instrument shall be deemed to have been executed only: -
a) By a natural person, if signed by him;
b) by corporation :- if sealed with the common seal of the corporation, affixed thereto in the
presence of and attested by its clerk, secretary or other permanent officer and by a member
of the board f directors, council or other governing body of the corporation.
Section 110 Provides that unless dispensed a person execution an instrument shall appear before
the registrar or such public officer or other person as is prescribed and unless he is known to the
registrar or the public officer or other person, shall be accompanied by a credible witness for the
purpose of establishing his identity.
113-117 and the 4th Schedule; Rule 7 RL Rules the provisions under the LTA and GLA do not
contain provisions governing execution and attestation, were they are silent we apply the ITPA.
We look at the Judicature Act which directs us to ITPA. Where all the statutes are silent, we look
at the common law.
Under the ITPA if a Mortgage is created under Section 59 of ITPA it has to be signed by the
mortgager and attested by two witnesses one of whom must be an advocate under Section 69(4)(a).
The reason for this requirement is given in Section 69(1) the reason being that the advocate is
required to explain Section 69(1) to the mortgagor, this is the section that grants a mortgagee the
statutory power of sale. The Advocate must sign a certificate stating that he has explained S 69(1)
to the mortgagor.

Section 69(4)(a)
The other transaction under ITPA is a gift of land as opposed to a sale where someone is paying a
purchase price, this may take place e.g. where a father gives land to his daughter and the
consideration is love and affection as no money is changing hands. The gift must be effected by the

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donor executing an instrument and his signature must be attested by at least two witnesses. Gift of
Land is under Section 123 of ITPA.
In the case of other instruments the ITPA is silent and only provides for mortgage and gift of land.
It is silent on execution and attestation of other instruments such as leases, easements etc and
therefore we turn to the common law as modified by equity.
Under the Common Law every document is signed by all the parties to the transaction and the
signatures are witnessed/attested. In certain cases, attestation is considered unnecessary, e.g. in the
case of transfer (sale) where there are no covenants to or agreements, entered into by the purchaser,
in such a case, only the vendor’s signature is required. The same reasoning applies if it is a
discharge..
If it is a re-conveyance or re-assignment of mortgage only the signature of the lender is required.
The mortgagor’s signature is not required since the purpose of there-conveyance is merely to re-
transfer the property after due payment of the mortgage debt by the borrower who has duly
performed all the covenants on his part. The mortgagee is just exercising his right to redeem his
property.
CONVEYANCING BY WAY OF DEED
Conveyancing under both the LTA and GLA is by way of Deed. A deed has 3 main essentials.
1. Signature – it binds the party that signs the document and therefore one can be sued on
the contract. By signing one is opening themselves to the legal consequences of not
obeying the contract.
2. Must be under Seal – this links the parties signing the documents and gives validity to
the document. It also prevents fraud. Under Section 2(1) of the Law of Contract Act
(Cap 23) provides that “No contract in writing shall be void or unenforceable by reason
only that it is not under seal.”
3. Deed Delivery – this is so that the interest must pass, there must be delivery. In
England we have a system of land where land is registered and another system where
land is not registered. In a system where there is no registration, the property in an
instrument passes with the delivery of that instrument or deed but if that instrument
requires to be registered, the property will not pass just by the delivery of the
instrument, it must be registered. Under Kenyan law, where a transaction requires to
be registered, the deed must be registered for an interest in land to vest. Registration
allows evidence to be adduced in court concerning that instrument.
Delivery does not therefore constitute an effective disposition for registrable transactions;
Registrable transactions are transactions which are required by law to be registered.
Sections 99-101 of the GLA nd Section 58 of the LTA are to the effect that property passes by
registration of the appropriate instrument.
EXECUTION BY CORPORATIONS
In the case of corporations which are required to have a common seal, execution of documents
is done under the common seal of the corporation. The seal is affixed in the presence of either
2 Directors of the Company or a Director and the Company Secretary.
There are other corporations that are not required to have a seal or they may have a seal but
their Memorandum and Articles of Association allows them to have attorneys sign the
documents on behalf of the corporations. Corporations which are not required to have a
common seal will usually have their documents executed by a duly constituted Attorney of the
corporation or an officer of the corporation who is authorised to execute documents on behalf
of the corporation by the corporation’s charter.
The National Bank of Kenya is one corporation where a duly constituted attorney may sign on
behalf of the corporation.
EXECUTION UNDER THE RTA
The RTA is silent on execution. In practice, however, both or all parties to a transaction sign
the instrument. In some cases, only one signature is required e.g. discharge of charge where the

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 borrower has repaid all the monies due and the property is no longer encumbered. Here, the
signature of the borrower is not required. The same argument goes for a transfer and only the
seller’s signature is necessary.
ATTESTATION UNDER THE RTA
When it comes to attestation, the RTA contains specific instructions
1. Under the RTA the state guarantees title; The state is saying that as far as your rights are
concerned, your interests are safeguarded and the state is liable if there is an error in the
register, the register is valid and that there are no mistakes and on that basis you are being
guaranteed that what you are seeing is valid. When you suffer loss because of an erroneous
entry in the register, the state is liable and therefore has to ensure that the instruments are
properly done. Because the State has that interest, it has to make sure that those
documents that will be registered must be witnessed by credible persons. Parliament has
appointed credible persons and for pruposes of witnessing
The following officers are authorise to witness signing
Judge or Magistrate
Registrar of Titles
Notary Public
Advocate
Justice of the Peace
Registrar of Deputy Registrar of the High Court
Administrative Officer (e.g. D.O., D.C. etc)
Documents executed in the United Kingdom and Common Wealth
They can be executed by a
Judge or Magistrate
Notary Public
Commissioner for Oaths
Mayor or Recorder or Chief Officer of any City or Municipal Corporation.
For documents executed in Uganda and Tanzania:

Attestation is by persons authorised to witness documents executed in the UK and Commonwealth

with the addition of an administrative officer.

For documents executed in any other place:

This can be executed by a Kenya Consular officer, consular agent or pro-consul or acting consular
officer, consular agent or pro-consul, exercising his function in that place. You could also have any
other person specially appointed by the President in that behalf.

ATTESTATION UNDER THE RTA

Attestation is not required for documents executed by the President in his official capacity this is
under the RTA Section 58(3).

Attestation is also not required for documents executed under the Common Seal of a Company
within the meaning of the Companies At (Cap 486) and the RTA Section 58(3). Note that if a
company under the RTA is signing a Charge then one of the witnesses must still be an Advocate.

In the case of a charge, if the chargee is to exercise its statutory power of sale, one of the witnesses
must be an advocate ITPA Section 69(a)

EXECUTION UNDER RLA

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Section 108 states that every disposition of land, lease or charge shall be effected by an instrument
in the prescribed form.

Section 109 states that every instrument must be signed by both or all parties to the instrument.

However, the proviso to Section 109 gives the registrar power to dispense with this requirement
except for the signature of the transferor or transferee. But not in the case of a transfer but in the
case of any other instrument. Discharge forms under the RLA are only signed by one party mainly
the Chargee. Previously the printed discharge forms for RLA had provisions for signature for the
Chargee and the Chargor but presently the new forms do away with the signature of the Chargor.

VERIFICATION UNDER RLA

The State guarantees title

If there is Error in register resulting in loss the state provides for indemnity under Sections 144-147
except for the first registration as stated under Section 144(1)

Signing of the documents under the Act must therefore be witnessed by prescribed persons.
The terminology under RLA does not talk of execution and attestation but talks of verification
which is a bit more than just execution.

Documents are divided into 3 categories

The RLA requires more than just witnessing the execution of a document. It also requires
verification of the execution of the document:
Section110

Section 110 requires the person executing the document to appear before the Registrar or such
public officer or other person as prescribed.

Where the person execution the instrument is unknown to the Registrar, public officer or other
person, he must be accompanied by a credible witness.

The witness or prescribed officer must satisfy himself/herself as to the identity of the signatory and
ascertain whether he/she freely ad voluntarily executed the document.

The prescribed officer is then required to complete a certificate to the effect that they have
identified the person signing and that the person signing has freely and voluntarily executed the
document.

The identification of the signatory and the completion of the Certificate signifies verification.

Instruments executed in the Commonwealth

1. Judge
2. Magistrate
3. Justice of the Peace
4. Notary Public
5. Commissioner for Oaths
6. Administrative Officer

Instruments executed in a Foreign Country

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British Consular officer or pro-consul or such other person or class of persons as the Minister may
determine
Notary Public

Instruments executed in Kenya:

Judge/Magistrate
Registrar and Deputy Registrar of the High Court
Registrar-General, Deputy Registrar-General
Administrative Officer
Superintendent of Prisons
Advocate
Bank Official
The RLA was intended to be a simple Act that can be understood by the citizens and should be
executed even without the aid of an Advocate.

Under the RLA there is no requirement as is the case with the ITPA regime that if it is a charge that
is being charged that one of the witnesses must be an advocate. However in practice it the
Advocates who normally attest.

VERIFICATION UNDER RLA

Where the instrument is a charge, the witness need not be an Advocate as is the case with charges
under the RTA and mortgages under the LTA and GLA

RLA Section 65(1)(a) this makes provision for a special acknowledgement signed by the charger
that he understands the effect of Section 74.

In practice however, the witnesses are usually advocates.

Simplifying the verification under the RLA seems to be a weakness of the Act as most of the
verifying persons might not be in a position to do so.

Under Section 110 the Registrar has power to dispense with verification where:
 Such verification cannot be obtained; or
 It can only be obtained with difficulty and the Registrar has to be satisfied that the
document has been properly executed; or
 In any other case in his opinion the document has been properly executed.
 The registrar is required to record his reasons for dispensing with verification.

Giving the Registrar this kind of authority seems to be a weakness especially in this age of
fraudulent land transactions.

EXECUTION UNDER POWER OF ATTORNEY

 A power of attorney is a document authorizing a person to do the acts of another.

 The power may be limited and may refer to particular acts or it may be unlmited and
general in its form.

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  When the document of the power of attorney is registered, it is under Cap 285 in the
Registry of Documents, the document must also be registered in the land registry relating to
the property that is the subject matter of the transaction. This also means that when the
attorney is signing the charge, his power of attorney particulars must be given in the
instrument.

 A power of attorney must be executed by the Donor of the Power and thereafte4r stamped
and registered in the Register of Powers of Attorney.

 In the case of land transactions, the power of Attorney must also be registered at the land
registry where the property is registered.

EXECUTION UNDER POWER OF ATTORNEY

The following provisions are on powers of attorneys

 The GLA – Section 108
 The RTA Section 50-51 Form M (Revocation of Power – Form N)
 The RLA Sections 114-117; Form L17 is the Statutory Form; Revocation Form if RL 18

STAMP DUTY

The Stamp Duty is a form of revenue for the Government.

Section 5 provides that every instrument set out in the Schedule to the Act, irrespective of where it
was signed as long as it relates to property in Kenya, shall be chargeable with stamp duty specified
in the said Schedule.

Under Section 6 of the Stamp Duty Act documents executed in Kenya and which require stamping
must be stamped within 30 days of execution. 30 days from the date of the document.

For documents executed outside Kenya, Stamp Duty must be paid within 30 days of receipt of the
documents in Kenya. This becomes a matter of fact as the date the document was received in
Kenya has to be proved.

Section 20 states that failure to pay Stamp Duty constitutes an offence for which a fine is payable.

A document which requires to be stamped but which is not stamped cannot be produced in evidence
in court in civil proceedings.

STAMPING OUT OF TIME

The collector has the authority to allow stamping of a document where he is satisfied that the
omission or neglect to stamp did not arise form any intention to evade payment of Stamp Duty or to
defraud, and the circumstances of the case justify leave being given to stamp out of time.

Where such leave is given, the instrument is stamped on payment of the unpaid stamp duty and of a
penalty unless the Collector waives the penalty on being satisfied that the circumstances warrant
such waiver.
REFUND OF STAMP DUTY

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The Act gives the Collector power to refund Stamp Duty if he is satisfied that an instrument has
been erroneously assessed with duty or penalty.

The application for a refund must be made within 1 year after the date of payment of that duty.

Under the GLA and the RLA, no document required by law to be stamped shall be accepted for
registration unless duly stamped. This is under Section 117 of GLA and Section 111 of the RLA.

The instruments that are required to be stamped include:

Transfer, lease, charge, mortgage, discharge, re-conveyance of mortgage, insurance policy,
debenture and Memorandum and Articles of Association.

The amount of Stamp Duty depends on the transaction in question, that is, whether it is a transfer,
lease, charge, etc.

The assessment of Stamp Duty is based on the consideration stated in the instrument.

CONVEYANCING LAW & PRACTICE

Lecture 3

STAMP DUTY CONTINUED

Section 10 of the Stamp Duty Act – any factor or circumstance affecting the stamp duty must be
stated in the instrument, which means that the instrument must identify itself to begin with because
that affects Stamp Duty. Secondly the document must also show the consideration, it must show
the value of the subject matter. In a Transfer consideration is the sale price, consideration in a
Charge will be the loan, under a Lease the rent is the consideration and therefore any matter
affecting the stamp duty must be stated and consideration is one of those matters.

Failure to declare the correct amount for stamp duty is an offence.

Calculating Stamp Duty:

Transfers are divided into two categories

1. Urban Land – land in the municipalities - rate of stamp duty is 4%
2. Agricultural land Outside the Municipality. – the rate of stamp duty is 2%

If for example the Purchase Price on agricultural land in the municipality is KShs. 2,000,000, the
rate is 4% and therefore the amount of stamp duty payable would be KShs. 80,000/-

For a agricultural property in a rural area the purchase price is KShs. 1,000,000 at the rate of 2% the
amount of Stamp duty payable on transfer will be 20,000/-

Under a Mortgage/Charge the stamp duty amount is based on the amount secured and the rate is
KShs. 2/- per 1000/- or 0.2% (0.002) . for example if the Mortgage amount is KShs. 5,000,000/- at
the rate of 0.002% the stamp duty chargeable will be 10,000/-

For a further Mortgage/Charge the rate is 1KShs. Per 1000 – 0.001 or 0.1% If for example there
was a further mortgage of KShs. 2,000,000/- the Stamp Duty payable will be KShs. 2000

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The difference between a further charge and a second charge, further charge is an additional
facility provided by the same lender whereas a 2 nd charge another institution is giving the loan but
charges the same property.

For a second Mortgage/Charge the rate will be 0.2% because it will be like a fresh charge.

The rate for an equitable mortgage or charge the rate is the same as that of a further charge which is
.1%

For a Discharge of Charge or re-conveyance of mortgage it is 50cents for every 1000/- which is
0.05% or 0.0005.

The difference between a legal charge and an equitable charge lies in the way both charges are
created. An equitable charge/mortgage is created by a simple deposit of the document of title
without more this deposit of the document creates an equitable charge/mortgage, this kind of
transaction does not require registration. A legal mortgage is created by Deed which must be
registered and when it is registered it is notice to the public.

The RLA does not have an equitable Charge because it is the register that is conclusive of
ownership under the RLA and this gives rise to the phrase that the RLA Title is only prima facie
evidence of Title.

THE LEASE

Stamp Duty on the lease is based on the annual rent that is payable. We have two categories
1. Lease for a period exceeding one year but less than 3 years and the rate is KShs. 10/-
per 1000 or 1% (0.01). For instance if we have rent per year as 1.2 million the stamp
duty chargeable will be KShs. 12,000/-.

2. Lease for a period exceeding three years the rate is Kshs 20/- per 1000 which is 2% or
(0.02) so the stamp duty chargeable here would be 24,000/-.

Where one has a rack rent or fluctuating rent, you use the figure for the highest rent.

THE GIFT INTER VIVOS

This is a gift that is given by a donor during his lifetime. For Stamp Duty we need a consideration
of a monetary figure but under gift the consideration is love and affection and so we value the
property to calculate the stamp duty. The rate to be applied will be 4% or 2% depending on
whether it is in the Municipality or outside the Municipality. In the instrument creating the gift it
must fulfil the requirements of Section 10 of the Stamp Duty Act.

TRANSMISSION

A transmission is a transaction where property passes by operation of law and the particular method
we have here is where property passes after death of the owner. Where there is a testate or intestate
succession. The executor gets a grant of probate and an administrator will have letters of
administration intestate.

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The rate that will apply when an heir wants to transfer his share of the property to a 3 rd party will be
4% or 2% depending on where the property lies.

REGISTRATION FEES

There are Sections that make provisions for payment of registration fees. At any rate the two
statutes are Section 117 of the GLA and Section 156 of the RLA. The essence of S. 117 is that no
document shall be registered unless the registration fees have been paid. And S. 156 is to the same
effect. Under subsidiary legislation, the exact amount is provided under the GLA the subsidiary
law is the Government Lands Registration Fees Rules, under the RTA the subsidiary law is the
Land Titles Registration Fees Rules. Under the RTA the 2 nd Schedule and under the RLA it is
under the 5th Schedule and if it is under Registration of Documents Act Cap 285 you go to the
registration of documents fee registration.

Land Control Act Cap 302 – the consent of the land control board. Section 2 which defines
Agricultural Land.

Section 6 – list transactions that require LCB Consent, it has also list of transactions that don’t
require consent.

Section 8 dealing with the procedure for obtaining consent.

Section 13 – Effect of the decision of the land control board or land appeals board

Section 9 – transcribe the whole Section which gives situations in which land control Board consent
ought generally not to be given.

Section 24 – transcribe

Rates Clearance Certificate

Section 86 of the Registered Land Act Cap 300

Section 33 of the RTA

Land Rent Clearance Certificate

Section 86A of the RLA

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