The Sectional Properties Act 2020

On 28 December 2020, the Sectional Properties Act, 1987 (the Repealed Act) was repealed and replaced with the Sectional Properties Act, 2020 (the New Act) which now aligns with the Constitution, 2010 and the 2012 Land Laws. It is an improvement from the 1987 Act.

The Act applies in respect to land held on a freehold title or on a leasehold title where the unexpired term is not less than 21 years and there is intention to confer ownership. The Act deals with the division of buildings into units to be owned by individual proprietors.

Summary of the act

1. Preliminary
2. Preparation and Registration Of Sectional Plans And Units
3. Establishment Of The Corporation
4. Provisions Relating To Residential Units
5. Miscellaneous Provisions

Clauses:

1. The preliminary provides for the short title, the application of the Act, and interpretation of the definition of terms in the Act. The Act shall only apply to land held on a freehold title or on a leasehold title where the unexpired residue of the term is not less than 21years and there is an intention to confer ownership. Some of the terms defined include a developer, unit, management agreement, purchase agreement, sectional plan, corporation, court, etc.
2. This part deals with subdivision of buildings into units, registration of sectional plans, Certificate to indicate share in common property, Incidental rights of owners of common property, etc. liability of the owner of a unit, requirements of sectional plans, boundaries of sectional units, certificates to accompany sectional plans, application for sub-division, etc., of a unit, conversion to units, easements in favor of the owner, against the owner or restrictions exist without mention.
3. This part deals with the establishment of the corporation where matters covered include Actions by or against the Corporation, Liability in tort, Duties, and Powers of the Corporation. Disposition and dealings affecting the common property, Registration of transfers of common property, Voting rights, and where the owner is incapable. Board of management and meetings of the Corporation, Bylaws and their enforcement, Administrative expenses, Interest on outstanding account, Recovery of money, Recovery of costs, Investments, Information on request, Handing over of documents, Insurance and policies, Exclusive use areas, Covenants benefiting parcel, Procedure for granting restrictive covenants
4. The provisions relating to units include the sale and renting of units, management agreement, and the notice to give up possession
5. Miscellaneous provisions regard Termination, the effect and sale of sectional property, Dissolution, Assessment, taxation, and liability of the Corporation. The Right of entry, Service of documents and notices, Change of address for service, Fees for documents. The Offences and penalties, Waiver, release, etc., as well as relevant Regulations and Repeal

A Comparison Between the 1987 and 2020 ACT.

The sectional title vs long term leases:

A sectional unit is space situated within a building and includes its proportionate share in the common property. They include apartments, flats, mansions, townhouses, or even offices. It is described in a sectional plan by making reference to the floor, wall & ceilings within a building. Confirmation of ownership is by a certificate of lease (for leasehold property) or through a certificate of title (for freehold property)

A long-term lease is any lease for more than 21 years intended to confer ownership of apartments, flats, masionettes, town houses or even offices. Long term leases will require conversion by the developer, the Management Company or the Owner, which means all long-term sub-leases that are intended to confer ownership of an apartment, flat, maisonette, town house or an office that were registered before the commencement of the 2020 Act shall be reviewed to conform to Section 54 (5) of the Land Registration Act, 2012.

Any lease for more than 21 years intended to confer ownership should be converted within 2 years of the commencement of the Sectional Properties Act, 2020.

Conclusion

The objective of the new Act remains the same, the division of buildings into units to be owned by individual proprietors. The common space, to be managed through a corporation established under the Act, is owned by the unit owners in proportionate shares as tenants in common. The new Act will definitely escalate real estate ownership in Kenya.

The implementation process will require approval of building plans by County governments, sectional plans by the Survey of Kenya, and registration of titles in land registries. Experience shows that a lack of, or inadequate technical capacity to expedite submissions and ensure quality in these institutions, undermined the success of the 1987 law.