ESTATE AGENCY &

THE LAW
 The Need to Regulate
One might wonder why we need rules and regulations in
Real Estate Agency?
01 Protection of the public (Ref. Estate Agents Act, Sec. 4 which mandates
the Board to protect the public.

02 Setting the standards for what is acceptable (and/or unacceptable).

03 Bring order in the industry.

04 Define the relationship between Agents and their clients, Agents

and the Government, and amongst themselves.
05 Safeguard the profession.
 The Relevant Laws
• The Constitution of Kenya, 2010

• The Estate Agents Act (Cap 533)

• The Land Act №. 6 of 2012

An Act of Parliament to give effect to Article 68 of the Constitution, to revise,
consolidate and rationalize land laws; to provide for the sustainable
administration and management of land and land based resources.

• Sectional Properties Act № 21 of 2020.

This Act provide for the division of buildings into units to be owned by individual
proprietors and common property to be owned by proprietors of the units as
tenants in common and to provide for the use and management of the units
and common property.
 The Relevant
Laws(Cont’d)
• The Land Registration Act №. 3 of 2012.
An Act of Parliament to revise, consolidate and rationalize the registration of
titles to land, to give effect to the principles and objects of devolved
government in land registration

• Land Control Act (Cap 302)

This Act provide for controlling transactions in agricultural land.

• Arbitration Act, № 4 of 1995.

The Act provide for dispute resolution through Arbitration.
 The Relevant
• Matrimonial Property Act № 49 of 2013.
Laws(Cont’d)
This Act provide for the rights and responsibilities of spouses in relation to
matrimonial property.

• Urban Areas and Cities Act, № 13 of 2011.

An Act of Parliament to give effect to Article 184 of the Constitution; to provide
for the, classification, governance and management of urban areas and cities; to
provide for the criteria of establishing urban areas, to provide for the principle of
governance and participation of residents.

• Law of Contract Act (Cap 23).

Act provide for application of English Common Law of Contract to Kenya.

• Distress for Rent Act (Cap 293)

This Act provides for distress for rent.
 Summary of relevant
provisions in selected laws.
 Constitution of Kenya,
• This is the Supreme Law (Art. 2). The Grundnorm.
•2010
Any law inconsistent with the COK is Void to the extent of the inconsistency. (Art.
2(4))
• Protection of right to property (Art. 40). State shall not deprive one’s property
arbitrarily. The protection excludes illegally acquired land. Art. 40(6)
• Economic and Social Rights. (Art 43) Every person has a right to accessible and
adequate housing and reasonable standards of sanitation.
• Clean environment (Art 42).
• Consumer Rights. Art. 46. Every person has a right to access services of good
quality, and information necessary to gain full benefits from goods and services;
and right to compensation on default.
Right to Privacy. Art. 31. Private information and communication not to be shared. Ref.
Data Protection Act
• Equality and freedom from discrimination. Art. 27(4). A person
shall not discriminate directly or indirectly against any person on
any ground, including race, sex, pregnancy, marital status,
health status, religion…etc. You can offer to let or sale a property
to say, Whites only, Kikuyus Only, Able-bodied only etc.

• Principles of Land Policy. Art 60. Land shall be held, used

managed- equitably; efficiently; productively and sustainably.
The principles include ( see comment).

• Classification of Land in Kenya. Art. 61. This can be Public Land

(Art. 62); Community Land (Art 63); or Private Land (Art 64)
 • Landholding by Non-Citizens. Art 65. This is a sticky issue as
foreigners seek to own land in Kenya.

• A non-citizen can only hold land on basis of leasehold tenure only.

• The period so granted shall not exceed 99 years.

• Any lease longer than 99 years shall be deemed to be not more

than 99 years.

• Body Corporate (Company, Partnership etc.) shall be treated as a

citizen if it is wholly owned by citizens.

• Trusts- Beneficial interest must be held by a citizen.

Cf. Land Control Act. Prohibits non-citizens from owning agricultural
 Power to regulate land use and property. Art. 66. The state may
regulate use of any land or any interest in or right over any land in the
interest of-
01 Defense;

02 Public safety;

03 Public order;

04
Public morality:
05 Public
January
health;
06 Land use planning. See Physical and Land Use Planning Act.
You cannot stop the state from planning land use.
Law of contract.
• A real estate agency contract is basically a contract between a property owner and an
intermediary for disposal, letting, leasing etc. of a property at an agreed commission.

• Contracts in relation to properties include- Sale Agreements; Tenancy Agreements et al.

What does the Law of Contract provide in regard to these type of contracts?
The Law of Contract Act domesticates English Common law on contracts.
• Section 3 (3) of the Act provides No suit shall be brought upon a contract for the
disposition of an interest in land unless—
• The contract upon which the suit is founded—
i.is in writing;
ii is signed by all the parties thereto;
iii The signature of each party signing has been attested by a witness who is present when the
contract was signed by such party:
Cf. Land Act Section 38.
Note: No suit can be brought before a court of law if the agreement wasn’t in writing.
Needed to cure the weaknesses of oral agreements.
Does a Sale Agreement have to be prepared by a Lawyer?
What are the basic elements of a Valid Contract-
• Offer and Acceptance. Is an Advert and offer for
sale? Invitation to Treat?
• Consideration.
• Intention to create legal relations.
• Capacity to Contract.
• Consensus Ad Idem. The meeting of the minds.

The Doctrine of Privity of Contract- Only parties to a

contract can enforce it.
However, in a contract of agency, an agent may
create relations between his principal and a third
party.
 LIMITATION OF ACTIONS ACT, CAP 22
• This Act prescribe periods for the limitation for actions.

• The Act sort of provides a deadline as to when one can seek redress arising out of
contracts.

• Actions that may not be brought after six (6) years- Sec 4 (1)
-Actions founded on Contract;
- Actions to enforce a recognizance;
-Actions to enforce an award;
-Equitable relief;
-Sum recoverable by virtue of written law.
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• Action may not be brought upon a judgement after twelve (12) years. Section 4(4).
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• Recovery of Land- No action to recover land may be brought after expiry of 12-years.
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(section 7)

• Actions to Recover Rent – Rent arrears are irrecoverable after expiry six (6) years from
when the rent became due and payable. Section 8

• Adverse Possession – Undisturbed occupation of land for 12-years one can claim
ownership. Section 13.
 Land control act, Cap 302
• This Act is meant to provide a mechanism for controlling transactions in Agricultural
Land.

• Agricultural Land in this case means –

Land that is not within—
-a municipality or a township; or
-an area which was, on or at any time after the 1st July 1952, a township
under the Townships Act (Cap. 133, 1948 now repealed); or
-an area which was, on or at any time after the 1st July 1952, a trading center
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-Land in the Nairobi Area or in any municipality, township or urban center
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that is declared by Nulla.
leo eget iaculis. the Minister, by notice in the Gazette, to be agricultural land for the
purposes of this Act,
Other than land which, by reason of any condition or covenant in the title
thereto or any limitation imposed by law, is subject to the restriction that it may not be
used for agriculture or to the requirement that it shall be used for a non-agricultural
purpose;
 • Actions that may not be brought after six (6) years- Sec 4 (1)
• -Actions founded on Contract;
• - Actions to enforce a recognizance;
• -Actions to enforce an award;
• -Equitable relief;
• -Sum recoverable by virtue of written law.

Action may not be brought upon a judgement after twelve (12) years. Section
4(4).

• Recovery
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12-years. (section 7)
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• Actions to Recover Rent – Rent arrears are irrecoverable after expiry six (6)
leo eget iaculis. Nulla.

years from when the rent became due and payable. Section 8

• Adverse Possession – Undisturbed occupation of land for 12-years one can

claim ownership. Section 13.

• Recovery of Proceeds of sale-How long should one take to pay a purchase

The following transactions are void unless a consent from the requisite
Land Control Board is obtained- Section 6

(a) The sale, transfer, lease, mortgage, exchange, partition or other

disposal of or dealing with any agricultural land which is situated
within a land control area;

(b) The division of any such agricultural land into two or more parcels
to be held under separate titles, other than the division of an area of
less than twenty acres into plots in an area to which the Development
and Use of Land (Planning) Regulations, 1961 (L.N. 516/1961) for the
time being apply;

(c) The issue, sale, transfer, mortgage or any other disposal of or

dealing with any share in a private company or co-operative society
which for the time being owns agricultural land situated within a land
control area,
A consent is not required where-

a)the transmission of land by virtue of the will or intestacy of a

deceased person, unless that transmission would result in the
division of the land into two or more parcels to be held under
separate titles; or

b)a transaction to which the Government or the Settlement

Fund Trustees or (in respect of Trust land) a county council
(Currently-County Government) is a party.
„Where consent is denied, any money paid is recoverable as a
debt. Sec. 6(3).
Land control act, Cap 302 (Cont’d)
 Land control act, Cap 302 (Cont’d)
In deciding whether to grant or refuse consent, a land control board shall—
i.Have regard to the effect which the grant or refusal of consent is likely to have on the
economic development of the land concerned or on the maintenance or improvement of
standards of good husbandry within the land control area;

ii.Act on the principle that consent ought generally to be refused where—

a)the person to whom the land is to be disposed of—
• Is unlikely to farm the land well or to develop it adequately; or
• Is unlikely to be able to use the land profitably for the intended purpose owing to its
nature; or
• Already has sufficient agricultural land; or

b)the person to whom the share is to be disposed of—

• Already has sufficient shares in a private company or cooperative society owning
agricultural January
land; or
• Acquisition by someone, who if he gains control of the legal entity, would likely lower
the standards of good husbandry on the land; or

c)Unfair Price - the terms and conditions of the transaction (including the price to be paid)
are markedly unfair or disadvantageous to one of the parties to the transaction; or
LCB should refuse consent in any case in which the land or
share is to be disposed to a person who is NOT— Section 9(1)
(c)

Thank You
A citizen of Kenya; or
A private company or co-operative society all of whose
members are citizens of Kenya; or
Group representatives incorporated under the Land (Group
Representatives)DrewAct,Feig1968 (Cap. 287); or
State corporation within
Business Head the meaning of the State

Corporation Act, 1986 (Cap. 446).

The decision of the Land Control Boards are final and shall
not be in any court. Section 8(2).
President has powers to prohibit or exempt any class of
controlled transactions. (Sec 23 & 24).
 Landlord and Tenant (Shops, Hotels And Catering Establishments)
The Act makes provision with(Cap 301)to certain premises (Controlled
respect
Tenancies) for the protection of tenants of such premises from eviction or
from exploitation.
Relates to commercial premises;
Creates the aBusiness Rent Tribunal
What is a controlled tenancy?
-It means a tenancy of a shop, hotel or catering establishment— Sec 2(1)
Which has not been reduced into writing; or
-Which has been reduced into writing and which—
-Is for a period not exceeding five years; or
-Contains provision for termination, otherwise than for breach of covenant,
within five years from the commencement thereof; or
-Relates to premises which the CS has Gazette as controlled tenancies,
based in rent payable or Value on the valuation Roll, irrespective of the period
of the leases. Sec 2(2)

Provided that no tenancy to which the Government, the Community or a

 • Why should you an agent avoid creating controlled tenancies?
(i) Requirement to maintain Rent Book. Where entries are countersigned by all the
parties.
Effect on sub-tenancies: These are not automatically extinguished when the head
tenancy come to an end.
(ii) Tenancy notices: If one party disputes a tenancy notice, the matter shall be
referred to a Tribunal irrespective of the T&C in the tenancy agreement;
- Notices on revision of rent;
-Termination of tenancy;
-Eviction;
-Levying distress
(iv) Low returns on investment. Any increase in rent if not mutually agreed must
be sanctioned by BRT.
-Has powers to fix service charge.
-Approve excision of extra land or build extra premises.
(v) Too much protection on tenants – can petition the tribunal against any action
by the landlord.
(vi) Delay in dispute resolution- Clogging of cases at BRT.
(vii) BRT has been accused of corruption
How to terminate Controlled Tenancies- Section 7
Maintenance – where a tenant fails to carryout
maintenance as per the tenancy agreement.
Rent Arrears – Persistence rent arrears for a period of two
months.
Substantial breach of obligation under the tenancy.
Sub tenancy – where such forms a minute portion of the
entire space.
Alternative accommodation – Landlord willing to offer
alternative and similar accommodation.
Landlord Occupancy – The landlord wishes to use the
premises for at least one (1) year. On condition that he
has held such interest for a period of more than five (5)
years.
Substantial reconstruction – The landlord would wish
substantially reconstruct the premises
 Rent restriction act,
The Act make provision for–
Cap 296
• Restricting the increase of rent, and the right to possession
• Restricting the exaction of premiums,
• Fixing standard rents,
• Protected tenancies;
Creates the Rent Tribunal.
• Protected Tenancies –
The Act shall apply to all dwelling-houses, other than—
a) Excepted dwelling-houses (A class of dwelling houses that a CS may
exempt from the operation of this Act by a notice in the Gazette);
b) Dwelling-house let on service tenancies;
c) Dwelling-houses which have a standard rent exceeding two thousand five
hundred shillings per month, furnished or unfurnished
Cont
..
• “standard rent” means—
• a)in relation to an unfurnished dwelling-house—
• If on the 1st January, 1981 it was let unfurnished, the rent at which it was lawfully so
let, the landlord paying all outgoings;
• If on the 1st January, 1981 it was let furnished, the rent at which it was lawfully so let,
less a sum at a monthly rate not exceeding one percent of the value (as determined by
the tribunal) of the furniture, excluding any soft furnishings, linen, cutlery, kitchen
utensils, glass-ware and crockery, and a sum not exceeding two percent of the value
(as determined by the tribunal) of any soft furnishings, linen, cutlery, kitchen utensils,
glassware and crockery, in respect of the furniture which was in the dwelling-house on
the 1st January, 1981, the landlord paying all outgoings;
• If on the 1st January, 1981, it was not let, or not erected, or the tribunal is unable to
determine whether or not it was on that date let or erected, a rent to be assessed by
the tribunal at a monthly rate of not less than one and one quarter (1.25) and not more
than one and one-half (1.5) percent of the cost of construction and the market value of
the land, the landlord paying all outgoings.
in relation to a furnished dwelling-house—
• If on the 1st January, 1981, it was let furnished, the rent at which it was lawfully so let, the
landlord paying all outgoings;
• if on the 1st January, 1981, it was let unfurnished, the rent at which it was lawfully so let
plus a sum at a monthly rate not exceeding one percent of the value (as determined by
the tribunal) of the furniture, excluding any soft furnishings, linen, cutlery, kitchen utensils,
glassware and crockery, and a sum not exceeding two percent of the value (as determined
by the tribunal) of any soft furnishings, linen, cutlery, kitchen utensils, glassware and
crockery, in respect of the furniture of the dwelling-house, the landlord paying all
outgoings;
• if on the 1st January, 1981, it was not let, or not erected, or the tribunal is unable to
determine whether or not it was on that date let or erected, the standard rent which would
be applicable if it were unfurnished, plus a sum at a monthly rate not exceeding one
percent of the value (as determined by the tribunal) of the furniture, excluding any soft
furnishings, linen, cutlery, kitchen utensils, glassware and crockery, and a sum not
exceeding two percent of the value (as determined by the tribunal) of any soft furnishings,
linen, cutlery, kitchen utensils, glassware and crockery, the landlord paying all outgoings;
Rent restriction act, Cap 296 Cont’d
a)Where the methods enumerated yield a rent which the tribunal
deems uneconomical or unfair-
a) The Tribunal may set such rent that it deems fair.
b) The Tribunal may use comparable lettings to set fair rent.

• You need leave of the tribunal to levy distress.

• One cannot charge an amount above standard and such extra
charge is recoverable.
How to terminate Protected Tenancies-
• Substantial Breach of tenancy;
• Failure of payment of rent when they fall due;
• Expiry of the term;
• Letting to another tenant on the basis of a quit notice by the tenant.
• Annoyance or nuisance by the tenant or occupant of the premises;
• Use of premises for illegal/immoral business;
• Subletting in excess of amount recoverable under the Act;
• Owner occupation or one’s children, spouse or employee. Provided a 12-months
notice is given. The premises shall not be re-let for 18-months unless the tribunal
approves.
• Premises required for execution of statutory duties. But the tenant has a right of
first refusal on re-letting.
• Assigning or subletting without consent.
• Landlord requires to reoccupy the dwelling. Notice of at least three months
required. Re-letting within 12-months – previous tenant has a right to re-occupy.
• Reconstruction or substantial repair- notice of 6-months. First option of
re-letting on completion.
• Where the tenant or spouse owns a house which isn’t under protected
tenancy and the landlord has issued 12-months quit notice. Alternatively
on six-months notice pay an agreed rent or tribunal to set annual rent at
10% of MV.
• Overcrowding.
• For occupation by another tenant who was wrongfully evicted (Why not
give an order for damages?)
 Matrimonial property act № 49 of 2013
Requirement for spousal consent in disposition of matrimonial property. Sec 93 of Land
Registration Act and Section 12 (1) Matrimonial property Act

Matrimonial Property- Section 6.

• S6(1) For the purposes of this Act, matrimonial property means—
a)the matrimonial home or homes;
b)household goods and effects in the matrimonial home or homes; or
c)any other immovable and movable property jointly owned and acquired during the
subsistence of the marriage.
• S6(2) Despite subsection (1), trust property, including property held in trust under
customary law, does not form part of matrimonial property.
• S6(3) Despite subsection (1), the parties to an intended marriage may enter into an
agreement before their marriage to determine their property rights. Pre-nuptial
agreements
• S6(4) A party to an agreement made under subsection (3) may apply to the Court to set
aside the agreement and the Court may set aside the agreement if it determines that
the agreement was influenced by fraud, coercion or is manifestly unjust
 Matrimonial property act № 49 of 2013

Matrimonial home" means any property that is-

• Owned or leased by one or both spouses and
• Occupied or utilized by the spouses as their family home,
• and includes any other attached property;

No eviction of a spouse without leave of court.