SECTIONAL PROPERTY ACT

The Sectional Properties Act 2020 and Regulations 2021 are laws in Kenya that allow the division of buildings into units owned by individual proprietors and common property owned by unit proprietors as tenants in common. The Act simplifies sale transactions, reduces costs, eliminates administrative challenges, and enhances revenue collection. The Regulations outline the registration of sectional plans and conversion of long-term leases to sectional titles. The Act applies to freehold land and leasehold land with a minimum residual term of 21 years.

Compliance requirements include proper geo-referenced and approved parcels of land, and the conversion of long-term leases to sectional titles is ongoing. The Act and Regulations aim to optimize the use of limited land resources in Kenya, particularly in high population density areas.A sectional development is a building plan that consists of two or more units, prepared by a surveyor from a building plan approved by the county government. The plan requires a land search, construction permit, floor plans, and physical structures. The registration of the plan is lodged at the land registry, and a management corporation is incorporated. The land registrar must submit the registered plan to the county government for apportionment of rates within 21 days.

The consequences of registration include closing the mother title register and opening a separate register for each sectional unit. Certificates of title or lease are issued for each unit, and interests registered against the mother title are endorsed on the sectional title documents. Each sectional unit owner is responsible for payment of land rent and rates for their individual unit. The management corporation manages the common areas on behalf of the unit owners.

Once a management corporation is registered, the existing management company must transfer all assets and liabilities to the management corporation within one year, and the company will be wound up in accordance with the Insolvency Act. Long-term leases registered under the Land Reform Act (LRA) must be converted into sectional units.