One of the biggest challenges that the Real Estate Market faces in Kenya has traditionally been the fear of title deed authenticity. Fake transactions have created fear to investors who remain completely exposed to a registry system and a state that cannot provide indisputable titles of ownership.
Land disputes are extremely common even when genuine titles are issued from the land registries, usually targeting to blackmail investors or because of lack of information or even manipulated by politicians who are trying to use land issues to fish for votes. Occasionally, private landowners or investors have to face illegal actions from people who illegally invade their properties creating damages, delaying projects and causing huge losses.
The rising number of land invasion cases all over the country and especially in the coastal region by people who are acting as squatters laying ancestral claims to private property is completely destroying any sentiment of ownership security that is a mandatory provision by the state. Obviously, we are not talking about cases of illegal ownership without relevant titles.
In the civilized world, whenever there is a dispute, there is law and courts where people can go to claim their rights, based on documentation, facts and not on illegal actions of violence. Anyone who holds any title which has been legally acquired has to be protected by the state and those who threaten his rights have to be punished.
Uncertainties over validity of title deeds are threatening the real estate sector in Kenya, at a time when it is going through a tough two-year period. Every time that the government is executing orders to repossess title deeds over irregularities, the industry is thrown into further confusion. When accusations are rife about the presence of cartels at Ardhi House which are citing irregular allocation and lack of legitimate interest in the issuance of titles almost everyone who owns property and has a title is hesitant and worried because of doubts raised on the validity of land documents in their possession.
Investors, local as well as foreigners are afraid to purchase property for fear of the acquired title deeds either turning out fake or being revoked over alleged illegal allocation. Land issues have been used traditionally for political gains either by distributing titles or by revoking titles in order to satisfy specific group of people and attract their votes and support.
On top of the existing problem of titles a new huge issue is now creating more fears and creates further turbulence to the property market. As the government intensifies demolition of buildings erected on riparian land, property market professionals are increasingly voicing their concerns over the economic and legal impact of the exercise that has attracted praise and condemnation in equal measure from Kenyans.
All experts including the Architectural Association of Kenya (AAK), Kenya Property developers Association (KPDA) and ISK, fully support the spirit behind the demolitions and the issues from building which have been erected on riparian land but are also concerned that the flattening of buildings is being done heartlessly without minding innocent victims who stand to lose their livelihoods.
The demolitions should consider the implications and the injustice to all the innocent, like second and third generation buyers and tenants. Under this environment, how will ordinary citizens or new investors trust the authenticity of documents issued by the government since it is not clear anymore which permits are valid or the process to validate them. So far the government has announced that it will demolish more than 4,000 illegal buildings in Nairobi alone, with demolitions expected to be extended to Kiambu, Mombasa, Kisumu, Kisii, and Kajiado.
Who is really responsible for all these buildings which obtained permits, approvals to build, consents to transfer and sell the properties they built on riparian land if it isn’t the state? The truth is that now the state decided to demolish what was built legally with permits and licenses issued by its own authorities.
The government should be held to account for these omissions and should take full responsibility when documents are issued by its agencies instead of transferring the responsibilities and liabilities to those who receive legal documents from it.
A holder of a genuine title deed has rights to its enjoyment during his life and his rights are passed to his/her dependents upon death. Legally, people who invest in real estate obtain a deed as a type of transaction paper to prove ownership of the title. The state has to be able to guarantee that owners of legal title deeds can do whatever they please with the property as long as they do not breach property laws. A title deed can also be used as security for transactions such as securing loans or guaranteeing borrowing by another party.
If the validity of titles is disputed, then financial institutions cannot accept them as collateral and that completely destroys the future of the real estate industry which is based on available finance globally. The value of property in real estate changes with time and having the legal document as a registered owner guarantees benefits in time of sale. If ownership is not secured for the bearer of titles either because the state failed to secure the process of land title issuing or if it failed to stop illegal construction on riparian land on time, then properties have no real value. Anyone may lose his property rights regardless of the way it was purchased.
Until the government manages to provide a secure and safe environment for property transactions and legal construction in the country, the whole industry and every shilling that has ever been invested in property is jeopardized and can be lost in the future. Investors will stay away from this extremely volatile market and the country will not see the benefits of a booming real estate market for a long time.
By Kioleoglou Kosta
Civil Engineer/REV Valuer by Tegova
Director Avakon Ltd