REAL ESTATE SECTOR - Africa Legal · PDF fileThe ˜rm has of˜ces in the Kenyan business centres of Nairobi and ... National and/or County Government. • Environmental Impact

Embed Size (px)

Citation preview

  • BOTSWANA

    ETHIOPIA

    KENYA

    MADAGASCAR

    MALAWI

    MAURITIUS

    NIGERIA

    RWANDA

    SUDAN

    TANZANIA

    UGANDA

    ZAMBIA

    K E N YA G U I D ESECTOR

    REAL ESTATE

  • A&K is the largest corporate law rm in East Africa and is generally considered the leading full service corporate

    law rm in Kenya. The rm has ofces in the Kenyan business centres of Nairobi and Mombasa. A&K is a member

    of ALN, an alliance of 12 independent top-tier African law rms. A&K works closely with its afliate ofces in

    Tanzania and the UAE.

    Areas of Practice

    Real estate, infrastructure, energy, natural resources (including oil and gas), mergers and acquisitions, capital

    markets, private equity, corporate and commercial law, competition law, banking and regulatory advisory work,

    insurance, trusts, tax, aviation, telecommunications, project nancing, privatisation law, public procurement,

    property development, labour and employment, litigation, arbitration and intellectual property.

    Anjarwalla & Khanna | ALN Overview

    ALN MEMBERS

    BOTSWANA (COLLINS NEWMAN & CO.)

    ETHIOPIA (MESFIN TAFESSE & ASSOCIATES LAW OFFICE)

    KENYA (ANJARWALLA & KHANNA)

    MADAGASCAR (MADAGASCAR LAW OFFICES)

    MALAWI (SAVJANI & CO.)

    MAURITIUS (BLC ROBERT & ASSOCIATES)

    NIGERIA (G. ELIAS & CO.)

    RWANDA (K-SOLUTIONS & PARTNERS)

    SUDAN (OMER ALI LAW FIRM)

    TANZANIA (ATZ LAW CHAMBERS)

    UGANDA (MMAKS ADVOCATES)

    ZAMBIA (MUSA DUDHIA & CO.)

    ADNAN KHAN PRINCIPAL ASSOCIATE

    AMYN MUSSAPARTNER

    FIDEL MBAYAPRINCIPAL ASSOCIATE

    KARIM ANJARWALLAMANAGING PARTNER

    NAFYSA ADAMPRINCIPAL ASSOCIATE

    SONAL SEJPALDIRECTOR

    JAINI SHAHASSOCIATE

    MARJORIE KIVUVA ASSOCIATE

    NICOLE GICHUHIASSOCIATE

    PAUL WANJOHIASSOCIATE

    SAAHIL PATEL ASSOCIATE

    JAMES NJENGAASSOCIATE

    FRED MOGOTUASSOCIATE

    AKASH DEVANI PARTNER

    MONA DOSHIPARTNER

    OMAR SAIDPRINCIPAL ASSOCIATE

    VIVIAN KERAGEASSOCIATE

    ZAINAB BACHOOSENIOR ASSOCIATE

    CAROLINE KARUGUSENIOR ASSOCIATE

    The A&K Real Estate Team

    REGIONAL OFFICEUAE (ANJARWALLA COLLINS & HAIDERMOTA)

  • This Real Estate Guide provides an overview of Kenyas real estate sector. It provides useful information to investors

    and stakeholders on legal aspects of the industry, such as applicable regulatory frameworks and basic taxes.

    Introduction

    The main laws governing the real estate sector in Kenya include:

    The Constitution of Kenya, 2010 which under Chapter Five provides a legal framework for transactions

    in land and the environment.

    Statutes:

    National Land Commission Act, 2012 (NLC Act) which provides for functions and powers of the

    National Land Commission (NLC) and its internal procedures;

    Land Registration Act, 2012 (LRA) which governs the registration of dispositions in land;

    Land Act, 2012 which consolidates all the different land laws in Kenya and provides for sustainable

    administration and management of land and land based resources;

    Land Control Act (Cap.302) (LCA) which establishes the Land Control Board (LCB) to regulate

    transactions affecting agricultural land;

    Landlord and Tenant (Hotels, Shops and Catering Establishments) Act (Cap.301) which provides for

    protection of commercial tenants from eviction or exploitation;

    Sectional Properties Act, 1987 which provides for the division of buildings into units, ownership of

    common property of buildings and for the use and management of units and common property;

    Distress for Rent Act (Cap.293) which provides for procedures for levying distress for rent in lease

    transactions;

    The National Construction Authority Act, 2011 which establishes the National Construction Authority

    and its powers and functions;

    Environment and Land Court Act, 2011 (ELC Act) which establishes the Environment and Land Court

    (ELC) and its powers and functions;

    Environmental Management and Co-ordination Act, 1999 (EMCA) which establishes the National

    Environment Management Authority (NEMA); and

    Physical Planning Act (Cap. 286) (PPA) which provides the procedures for the preparation and

    implementation of physical development plans.

    Other laws which have an impact on the real estate sector include:

    Land (Group Representatives) Act (Cap.287) which incorporates representatives of groups who have been

    recorded as owners of land under the Land Adjudication Act.

    Forest Act, 2005 which governs the establishment, development and sustainable management of Kenyas

    forests.

    Stamp Duty Act (Cap 480) which provides for the levying and managing of stamp duties.

    Proposed laws which will affect the real estate sector if enacted are:

    The Land Laws (Amendment) Bill, 2015 which seeks to amend the land laws to align them with the

    Constitution, to provide for procedures on evictions from land and for connected purposes.

    The Community Land Bill, 2015 which seeks to regulate the use of community land and its registration.

    The Physical Planning Bill, 2015 which seeks to amend the PPA to align physical planning laws with the

    Constitution.

    Legal Framework

    2

  • Institutional FrameworkThe key government agencies that regulate the real estate sector include:

    Ministry of Land, Housing and Urban Development

    In charge of providing policy direction and coordinating all matters related to

    land, housing and urban development.

    Land Registries

    Established under the Land Registration Act for maintaining land registers and undertaking

    registration of transactions in land in each registration unit.

    National Environment Management Authority (NEMA)

    Established under the Environmental Management and Co-ordination Act and whose

    function is to implement all policies relating to the environment.

    Department of Surveys

    Responsible for national

    surveying and mapping of

    land.

    Environment and Land Court (ELC)

    A superior court established under the ELC Act to hear and determine disputes relating to

    the environment and the use, occupation of and title to land.

    Land Control Board (LCB)

    Established under the Land

    Control Act to control

    transactions affecting

    agricultural land.

    County Governments

    Established under the Constitution and tasked with approving development

    projects within the counties. They also hold community land in trust for the

    local communities within their jurisdiction.

    National Land Commission (NLC)

    Established under the NLC Act to regulate the use of public land and

    formulate national land policy.

    3

  • Structuring Real Estate ProjectsExample of Large-Scale Real Estate Project Structured by A&K

    LAN

    D O

    WN

    ER

    CO

    NSTR

    UC

    TION

    C

    ON

    TRA

    CTS

    (APA

    RTM

    ENTS)

    LON

    G

    TERM

    LEA

    SES

    LON

    G TER

    M LEA

    SES

    DEB

    T FINA

    NC

    ING

    DEB

    T FINA

    NC

    ING

    EQU

    ITY FIN

    AN

    CIN

    GPR

    IVA

    TE EQU

    ITY FIR

    MS A

    ND

    DIR

    ECT FO

    REIG

    N IN

    VESTO

    RS

    COM

    MERCIA

    LBA

    NK

    SRETA

    IL DEV

    ELOPM

    ENT

    (OFFSH

    ORE EN

    TITY)

    SHO

    RT

    TERM

    LEASES

    INTERN

    ATIO

    NA

    L AN

    D

    LOCA

    L RETAILERS/TEN

    AN

    TS

    (RETAIL MALL)

    CO

    NSTR

    UC

    TION

    CO

    NTR

    AC

    T (IN

    FRA

    STRU

    CTU

    RE)

    MA

    NA

    GEM

    ENT A

    GR

    EEMEN

    T

    MA

    NA

    GEM

    ENT

    AG

    REEM

    ENT SER

    VIC

    E AG

    REEM

    ENT

    LPG SU

    PPLY C

    ON

    TRA

    CT

    PRO

    VISIO

    N O

    F SOLA

    R

    SUPPLY

    OF ELEC

    TRIC

    ITY

    LPG SU

    PPLIER

    PRIV

    ATE SO

    LAR

    DEV

    ELOPER

    GO

    VER

    NM

    ENT

    UTILITY

    MA

    NA

    GEM

    ENT

    CO

    MPA

    NY

    SECU

    RITY

    CLEA

    NIN

    GG

    AR

    DEN

    ING

    (OFFSH

    OR

    E ENTITY

    ) CO

    NTRA

    CTOR

    RESIDEN

    TIAL D

    EVELO

    PMEN

    T(LO

    CAL EN

    TITY)

    HO

    ME O

    WN

    ER

    COM

    MERCIA

    LBA

    NK

    S

    COM

    MERCIA

    L DEV

    ELOPM

    ENT

    (THIRD

    PARTY

    )

    4

  • A&K works on the majority of landmark developments in the country and increasingly in East Africa. In particular,

    A&K has unique on-the-ground experience in large-scale developments in Kenya. A&K has strong business and

    regulatory relationships enabling a concise understanding of structuring a deal in light of potential economic,

    political and nancial risk.

    Garden City

    Acted for Actis on its development of Garden City, a USD 250 million, greeneld, integrated mixed-use project in

    Nairobi, including advising on the overall corporate and management structure, preparing all agreements relating

    to the land acquisition, project construction, residential unit sales, retail shop leases and handling all regulatory and

    licensing matters.

    Two Rivers

    Acting for Centum on its development of Two Rivers, a ve-year