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COUNCIL OF LEGAL EDUCATION
KENYA SCHOOL OF LAW
________________________
THE ADVOCATES TRAINING PROGRAMME
_______________________
CONVEYANCING
_________________
ATP 107
_______________
4TH
MARCH 2015
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KENYA SCHOOL OF LAW
CONVEYANCING
(2015)
Teaching and Assessment
Teaching: The course is of ten months duration. There will be 1 x 2 hours
weekly sessions over approximately thirty (30) weeks
Assessment: 20% Coursework and 60% End of session written examinations, 20% Oral
Exams
Recommended Text Books
The books that we are recommending this year are:
1. Bowman & Tyler. The Elements of Conveyancing (Lond) 8th
Ed. Sweet &
Maxwell.
2. P.L. Onalo Land Law and Conveyancing in Kenya
3. Wanjala Smoking. Land Law & Disputes in Kenya (Nrb) Oxford University
Press, 1991
4. Robert Abbey & Mark Richards A Practical Approach to Conveyancing (Lon)
Blackstone Press 2000.
5. Tom Ojienda Conveyancing Principles and Practice. (Nbi) 2008
The following books may also be useful for further insight.
1. G.H. Treitel The Law of Contract (Lond) 11th
Edition Sweet
i. & Maxwell, 2005
2. I.C.F. Spry The Principles of Equitable Remedies (Lond) Sweet &
i. Maxwell, 1997
3. Diane Chappelle Land Law (Lond) Longman,2008
The following Statutes are mandatory
5. The Land Registration Act No. 3 of 2012
6. The Law of Contract Act (Cap 23) Laws of Kenya
7. The Registration of Documents Act (Cap 285) Laws of Kenya
8. The Sectional Properties Act No. 21 of 1987
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The fol lowing Statutes are optional f or fur ther insight and reference.
1. The Laws of Property Act 1925 U.K.
2. The Land Control Act (Cap 302)
3. The Estate Agents Act (Cap 533)
4. Rent Restriction Act (Cap 296)
5. The Equitable Mortgages Act (Cap 291)
6. Landlord & Tenants (Shops Hotels & Catering Establishments) Act (Cap 301)
7. Distress for Rent Act, (Cap293) of the Laws of Kenya
8. The Auctioneers Act 1996, and the Auctioneers Rules 1997
9. The Companies Act, (Cap 486) of the Laws of Kenya.
10.
Students are encouraged to famil iar ize themselves with the provisions of the Nati onal
Land Policy for Kenya Session paper No. 3and the Constituti on 2010, The Land
Registration Bil l, the Land Bil l and the national Land Commission Bil l all of 2011.
Aims and objectives
The main objective of the course is to ensure that the students obtain an understanding of the
general principles of conveyancing law and practice and to familiarize the students with the
concepts and protocols of conveyancing. This enables the students to identify the critical stages
in a conveyancing transaction and ensure they can plan and complete all the stages of a freehold
or leasehold conveyance, including drafting. Knowledge of land Law is presupposed while
knowledge of Contract Law, Succession Law and Equity is critical.
The course is also designed to ensure that the students appreciate the role of a lawyer as the
necessary intruder in conveyancing transactions. Thirdly the course is also intended to ensure
that the students develop an appreciation of how the drafting of conveyancing instruments does
determine the legal consequences and effect of those instruments.
Most importantly, the student must be able to draft stamp and register various conveyancing
instruments and to understand all the procedures preceding registration including valuation
stamping and obtaining the requisite consents and clearances.
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OUTLINE OF COURSE
A. INTRODUCTION TO CONVEYANCING
The subject introduces and covers the history of conveyancing generally, firstly in the United
Kingdom (1535) and then in Kenya from 1897. The basics in land law are covered especially the
various interests and tenures in land. The element also introduces all the applicable statutes and
their purport.
The nature debate and the conceptual framework of conveyancingis discussed.
Is conveyancing
- Contractual,
- jurisdictional or is it a
-
hybrid of both?
i. Historical Background of land law and conveyancing:
England from 1535 through 1925
Kenya 1900 through 1987 and today.
ii. Conveyancing ;definition and scope
conveyance defined; duties of a conveyancer as outlined.
conveyancing defined
Terminology used generally in conveyancing Language and form of documentation under the various land laws
iii. Applicable laws
LTA
LRA
-Law of Contract Act (Cap 23)
The formality of writing and the necessity thereof;
v. Registration
The formality of registration
Effect and import of registration
Of Leases and non registration thereof.
vi. Priority of registered documents
References
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Texts : Wanjala* (supra)
(A must for those who have not studied Land Law)
Bowman & Tyler ; generally
Ojienda Chapter 1 and 2 generally
Anderson ,S Of Licences and Similar Mysteries 42 MLR 203
Statutes : Statute of Frauds 1677
Law of Contract Act (Cap 23)-S.3(3)
Case law:
Tulk vs. Moxhay (1843-60) All. E.R. 9.
JumaMuchemi Vs. WaweruGatonye (HCCC) No. 853 of 2002
Momanyi Vs. Hatimy 2003 WLR 545
Rogan Kamper Vs. Grosvenor (1977) KLR 123
MbuiVs Mbui (2005) 1 E.A 256
NBK Limited vs Wilson N Ayah and Anor (eKLR 2009) (CACA 119 of 2002).
Gatimu Vs. MuyaGathanji (1976) K.L.R 265
TengHuan Vs. SweeChuan 1992 1 WLR 113
Echaria Vs. Echaria C.A.C.A (Kenya) eKLR
B.
BASIC REQUIREMENTS IN CONVEYANCING
This element runs the student through the basic requirements of conveyancing. The student
should at the end of the element be able to appreciate the requirements of execution, attestation
and verification of signatures, as well as the need for consent, clearances, stamp duty and
registration.
i. Execution, Attestation and Verification.
ii. Clearance Certificates
iii.
Consents
Realm of controlled transactions
Other consents - Commissioner of Lands, Railways, Local Authorities, and Lessors.
iv. Stamp Duty and consequences thereof in various transactions
v. Power of Attorney(s)special, specific and general
vi. Registration.
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Inside the Lands Registry
Text: Ojienda Chapter 2
Statutes:
Valuation for Rating Act (Cap 266) generally
Rating Act (Cap 267) - S.21
Stamp Duty Act generally
Land Control Act (Cap 301)S.2-9.
Law of Contract Act-S.3
LRA
Case law :
Barclays Bank PLC Vs. OBrien (1994) 1A.C. 180
Labelle Intern Ltd Vs. Fidelity Bank Ltd (2003)2 E.A 540
Mucheru Vs. Mucheru (2002) 2E .A456
Bains Vs. Chogley (1949) 16 K.L.R. 27
Articles :Moriarty (1984) LQR 376
Cooper (2003) OUCLJ 201
Hopkins,N Conscience, Discretion and Creation of Property Rights (2006) 26 Leg Studies 475
Hopkins ,N Acquiring Property Rights from Uncompleted Sales of land 61 MLR
C. THE PRE-CONTRACT PERIOD
This is a journey through the period before the execution of the contract. The role and duties of
the lawyer is explored with emphasis on sale of land.
The student is to be taken through the period before the conveyancing and be able to demonstrate
that acting on the clients instructions the student will be able to identify the clients goals and be
able to advise the client from the point of view of a seller, a buyer, a mortgagor, a mortgagee, a
lessor and a lessee. Distinction is to be made between an Advocate qua Advocate and an
Advocate qua negotiator: The Advocate is never the client. Role of other parties to a
conveyancing transaction is also discussed especially of Surveyors, Planners, Architects,
Valuers, Estate Agents, e.t.c.
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The student must appreciate the necessity for a good working relationship with the client and the
need to instill confidence in the client as to his capabilities as a conveyancer.
Parties to a transaction
Purchaser - Vendor, Lessee-Lessor, Mortagee-Mortgagor, Surveyors, Planners
Advocates, Valuers, Estate Agents & their respective roles
The Initial Client Interview
Instructions and brief
Investigation of title
Pre contract inquiries and mis-descriptions
Searches, necessity of Official& Personal, historical, pre-contract, pre & post
registration Deduction of title and requisitions.
Inspection of property
References
Text : Robert Abbey & Mark Richards pp 88-158
Ojienda Chapter 4
Statutes : RTA-s.79
RLA-ss.30,36,43
GLA-s.127LTA-s.31
Legal Notices No146-153 of 2005
See also:
Estate Agents Act Cap 533
Advocates Act Cap 16Remuneration Order
Case law :
Barclays Bank Plc Vs. OBrien(1994) 1 A.C 180(on initial interview and duty to advise)
Mortgage Express Ltd VsBowerman& Partners (1996) 2 All E. R 836
Rajdip Housing Development Company vs J. WaciraWambugu CACA 4 of 1991
Mapis Investment (K)Limited vs Kenya Railways Corp. CACA 14 of 2005
Shah vsAkiba Bank Limited 2005 2KLR 424, 2006 2 EA 323
Gitwanyi Investment Limited vsTajmal Limited and 2 Others 2006 2 EA76
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AG vs KCB Limited &Afraha High School (2004 eKLR)
D. THE CONTRACT STAGE
The element takes the student through the preparation and execution of the contract documents
for conveyancing purposes. An appreciation of the law of obligations or contract law is
demanded. An enforceable contract with regard to disposition of interest in land is reviewed.
The form and substance of the agreement is considered. The student is expected to make an
independent judgment in the characterization of the parties to the transaction as well as contents
of the Sale Agreement whilst being conscious to the freedom of the parties to contract as they
may wish.
Law of contract and basic requirements of an enforceable contract generally.
Drafts and engrossments.
General conditions of sale.
Law Society Conditions 1989 Edition
Special Conditions of Sale
Various Purchasing situations and obligations of Advocates.
Particulars of Sale
Property
Fixtures and fittings and the doctrines of annexation and maximum user
Consideration
Deposits, as a special condition
Nature
Stakeholders and Agents
Forfeiture
Possible Reforms
Professional undertakings, general rules of undertakings, breach and misconduct,obligations imposed by undertakings, which is bound by undertaking, ambiguous
undertakings, etc.
Completion
Completion notices and time of the essence clauses.
LSK completion - Postal or Physical
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Auctions
Transmissions
Executors and Administrator
Insolvency
Court ordered transmissions
Compulsory acquisition
Texts:
Ojienda Chapter 3
Robert Abbey & Mark Richardssp52-87,261-291
Handout: Check lists for both advocate for buyer & for seller
Statutes:
Law of Contract Act Cap 23 -s.3
ITPA ss.53-55
RLA S.38 (3) & Law Society Conditions of Sale
Case law: Barclays Vs Messenger (1989) 3 All E R 492(deposits)
Universal CorpnVs Five Ways Properties (1997) 1 All E. R
MuchiraVsGesima Power Mills Ltd (2004) 2 E.A 168
E. SUBLEASES & SECTIONAL PROPERTIES
F. TRANSFERS STAGEVarious Transfer Instruments/Deeds
RLA Transfers
Indentures of conveyance
Indentures of Assignment
Leases and subleases
Deeds of transfer; ad hoc or statutory format?
Title documents (issuance, loss and replacement) Survey and subdivision sales
Development Conveyancing.
G. MORTGAGES AND CHARGES
Definitions , distinctions and terminology
charge and mortgage
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equitable or legal
further and second
Duties and responsibilities of the Lenders/Borrowers Advocates. Third party
mortgages/charges
Covenants in a mortgage/charge and import thereof
Remedies of the mortgagee/chargee
under RLA
under ITPA
Reconveyances, reassignments, discharges
Statutes:
RLA- S.65
ITPA - S.58,S.69,S.98,S.100
RTA - S.46, 47, 48, 49
RLA - S.81
Case Law and Articles:
Ngeny vs. KCFC Ltd (2002) 1KLR 295
Labelle Intern Ltd vs. Fidelity Commercial Bank (2003) 2E.A. 541
Simiyuvs. HFCK Ltd (2001) 2 E.A. 540
Eros Chemist Ltd vs. Trust Bank Ltd (2000) 2 E.A. 552Maranyavs. NBK Ltd (1995-8) 1 E.A. 177
Cuckmere Brick Co. Ltd. vs. Mutual Finance Ltd (1971) 2 All R.R. 633
Sajabivs.Amreliwalla (956) E.A. C.A. 71
Aberdare Investments Ltd vs. HFCK Ltd (1999) 2 E.A. 1
Royal Bank of Scotland VsEtridge(2001) 4 All E R 449
Fehlberg, B TheHusband,the Bank, the Wife and her Signature (1994) 57 MLR
H. LEASES AND LI CENCES
Definition and Distinction
Essentials of a Lease
Implied Conditions & Express Covenants
Assignment and Determination
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Regime of the Rents Acts
Duties of the Conveyancer
Texts:
Chesires Modern Law of Real Property PP.381-512
Robert Abby & Mark Richards pp 291-24
GibsonsConveyancing 20th
edpp 391-525 (Further reading)
Statutes :
RLA S.3, 45-64
RTA S.40,41,42,43,44 and 45
ITPA S.5 105-117
Rent Restriction Act (Cap 296) Laws of Kenya
Landlord & Tenants (Shops, Hotels and Catering Establishments) Act Cap 301)
Case Law:
1. Street vs. Mountford (1985) A.C.
2. Birmingham Vs. Ross (1883) 38 Ch-D 295
3. Aldin vs. Latmer 1894 Ch. 437
4. Facchini Vs. Bryson 1952 T.L.R. 1386
5. Hetch Vs. Morgan 1957 E.A. 741
6.
Runda Coffee Estate Vs. Ujagar Singh 1962 E.A. 564.7. Sykes Vs. Midland Bank Executor & Trustee (1970) 2 All .R. 471
Caveats and cautions, RTA S.57, RLA S.131,132,133,134 & 135
Easements, profits, restrictive agreements, and way leaves, extinction of interests
in land, extension of leases
I. PARTS OF A PURCHASE DEED
1. DOCUMENTS UNDER GLA, RTA & LTA
Commencement and Date, note parties and their description
Recitals
Operative Part
Covenants & Declarations
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Testimonium
Execution & Attestation.
2. DOCUMENTS UNDER RLA
Parcels clause
Date
Execution & Attestation
K. CONSTRUCTION OF A CONVEYANCE DEED AND RULES GOVERNING
CONSTRUCTION OF DOCUMENTS
Specific and general rules governing construction of document
L. REMEDIES IN CONVEYANCING
Statutory,common law or equity?
Damages & Rescission
Specific performance and related equitable remedies
Statutory Rectification ,statutory damages,indemnification& other statutory
remedies
Statutory indemnity
Cautions and Caveats as pseudo remedies
Texts : I.C.F.Spry(supra)
Statutes : Section 143 RLA
Section 69 ITPA
Course I nstructors: J. Louis Onguto& E.KokiMbulu& Eunice Arwa
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CONVEYANCING LAW & PRACTICE
INTRODUCTION
Conveyancing has been defined as the process by which legal title to property is transferred
(Abbey & Richards, 2000, 18).The Council of Licensed Conveyancers in England and Wales on
the other hand defines Conveyancingas the legal process of transferring a house or flat,
commercial property orpiece of land from one owner to another. Both definitions may however
be limiting as Conveyancing involves more than just drafting and registering documents.
Conveyancing may also involve a simple modification of title or even an involuntary transfer of
an interest e.g. sale by a mortgagee.It may thus be more appropriate to define Conveyancing as
the art or science of conveying or effecting the transfer of legal property or modifying interest in
relation to property by means of a (written) document. The three critical ingredients are thus the
process, the legal titleand the transferor modification.
The process is what is basically referred to as Conveyancing practice or protocol which refers
to the branch of advocacy in real property transactions or the procedural side of the coin of
which the law of property is the substantive side. The legal title or interest to be transferred or
modified must be legal in the strictest sense of the word. The transferee must be seized of a legal
title. Consequently, protocol or process will demand that a Conveyancer investigates and
ascertains that the title to be transferred or modified is legal.
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Conveyance describes the document used to effect the conveyancing, and Conveyancer
describes the qualified professional or specialist lawyer retained by the parties to a transaction to
deal with the paper work and finances. His role is to represent the buyer or seller or the
mortgagor. He must however be qualified in line with the decision of the Court of Appeal in the
unreported case of National bank of Kenya Ltd Vs Wilson Ndolo Ayah & Another (eKLR
2009).
National Bank of Kenya Ltd v Wilson Ndola Ayah [2009] eKLR
In this suit the respondent prayed for, among other reliefs, a declaration that a charge and Deed
of Guarantee, both in favour of the appellant, dated 23rd
July 1990 and 17th
October, 1990,
respectively were null and void ab initio, and that the sums of money they purportedly secured
were irrecoverable. Both documents were executed by the respondent for the benefit of a
company known as Bungu Investments Ltd, and were drawn by one V. Nyamodi, advocate.
At the trial, the Court found as a fact that on the respective dates the two documents were drawn,
V. Nyamodi did not hold a current Advocates Practicing Certificate, and was therefore not
qualified to draw those documents in view of the provisions of section 34 of the Advocates Act,
Cap 16 of the Laws of Kenya.
Section 34 provides that No unqualified person shall, either directly or indirectly, take
instructions or draw or prepare any document or instrument
(a) Relating to the conveyancing of property; or
(b) For, or in relation to, the formation of any limited liability company, whether private
or public; or
(c) For, or in relation to, an agreement of partnership or the dissolution thereof; or
(d) For the purpose of filing or opposing a grant of probate or letters of administration;
or
(e) For which a fee is prescribed by any order made by the Chief Justice under section
44; or
(f) relating to any other legal proceedings; nor shall any such person accept or receive,
directly or indirectly, any fee, gain or reward for the taking of any such instruction or for
the drawing or preparation of any such document or instrument: Provided that this
subsection shall not apply to
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(i) any public officer drawing or preparing documents or instruments in the
course of his duty; or
(ii) any person employed by an advocate and acting within the scope of that
employment; or
(iii) Any person employed merely to engross any document or instrument.
(2) Any money received by an unqualified person in contravention of this section may be
recovered by the person by whom the same was paid as a civil debt recoverable
summarily.
(3)Any person who contravenes subsection (1) shall be guilty of an offence.
(4) This section shall not apply to
(a) A will or other testamentary instrument; or
(b) A transfer of stock or shares containing no trust or limitation thereof.
Following the trial courts findings as aforesaid, the court concluded that the instrument of
charge and deed of Guarantee aforesaid were null and void ab initio, with the result that the
money they secured which had grown from the initial figure at Kshs. 10 million to Kshs.
57,308,137/50 was irrecoverable. The court gave judgement in terms and thus provoked an
appeal.
Mrs. V.Nyamodi did not hold a practicing certificate as at the date she drew the two documents.
She was qualified as an advocate having successfully gone through law School. However,
qualifying as an advocate is quite different from qualifying to practice as an advocate.
Neither the Advocates Act nor any other written law makes provision with regard to the validity
or otherwise of such documents. The Stamp Duty Act, Cap 480 Laws of Kenya, unlike the
Advocates Act, makes provision, in section 19, making an unstamped document inadmissible in
evidence. The Legislature, we think, not only made the document unregistrable but also made the
document invalid for any other purpose before stamping.
Section 9 makes provision for qualifications for practicing as an advocate, and the qualifications
include having in force a current practicing certificate. No person shall be qualified to act as an
advocate unless
(a) He has been admitted as an advocate; and
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(b) His name is for the time being on the Roll; and
(c) He has in force a practicing certificate; and for the purpose of this Act a practising
certificate shall be deemed not to be in force at any time while he is suspended by virtue of
section 27 or by an order under section 60 (4).
The Court of Appeal held that:
It is also noteworthy that the Advocates Act itself makes provision for the recovery of the fees
paid to such an advocate. So the innocent party is reasonably covered, although in our view
provisions similar to section 19 of the Stamp Duty Act should have been included in the
Advocates Act to remove any doubt as to the validity of documents drawn by unqualified
advocates. It is public policy that courts should not aid in the perpetuation of illegalities.
Invalidating documents drawn by such advocates we come to the conclusion that will discourage
excuses being given for justifying the illegality.
A failure to invalidate the act by an unqualified advocate is likely to provide an incentive to
repeat the illegal Act. For that reason alone the charge and instrument of guarantee in this matter
are invalid, and we so hold.
GenerallyConveyancers duties are wide and varied and are not limited to merely drafting
the conveyance and registering the same.The duties include:
Advising clients on buying and selling process + effect of transferring an interest
in land
Investigating title
Drafting the K with sale details, offers, leases, transfer
Liasing with lenders, estate agents, Advocates, etc
Paying taxes e.g. Stamp duty, land rent, VAT, CGT, Rates
Keeping records of payments and finally preparing a completion statement
Perfecting the documentation including proper execution, completion and
registration
DUTIES OF ADVOCATES IN CONVEYANCING TRANSACTIONS
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Generally- the role of a conveyancer is to represent the parties. Read S 34 (1) (a)of the Advocates
Act- no unqualified person shall either directly or indirectly take instructions, draw or prepare
any document or instrument relating to the conveyancing of property.
Vendors Advocate
Obtain information on:-
Full names of the parties, full particulars of the property, the price, whether any deposit is
required, details of encumbrances (if any), whether the property is vacant, expected date of
completion, prepare the sale agreement, obtain original title document from vendor, approve
transfer/conveyance, procure execution of transfer/conveyance, receive and account for the
proceeds of the sale to vendor., obtain rates, rent clearances, consents where required, obtain
discharge of charge/reconveyances.
Purchasers Advocate
Obtain information on:-finances taxes and legal costs and expenses of the conveyance,
scrutinizing of title documents, investigation of title, approving sale agreement, preparation of
transfer/conveyance and engrossing the same, attending to execution of the conveyance or
transfer where necessary, stamping and lodging of documents where necessary, obtaining and
paying the purchase price to the vendors advocates.
The worst mistake a practicing conveyancer can make is to fail to spot something fraudulent. A
conveyancer must not be negligent. Attestation of signatures without verifying could constitute
negligence. The need to verify if the practitioner on the other side is qualified is really important.
So are searches at government land registries.
A thorough understanding of the key conveyancing protocols is also important. (E.g. where
advocate for the buyer calls for original title documents and clearances without offering cheque
for purchase SUM to the sellers advocate or ensuring that requisite undertakings are given by the
buyer's financers.)
An understanding of the Law Society Conditions of sale, current practice notes and guidelines is
also important.
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Conveyancing practitioners also have a duty of confidentiality to their clients. There is also the
obligation to act in the best interests of the client. There is need to verify a client's identity before
commencing any transaction particularly if the client is new or unknown to the advocate.
There is also need to ensure that there are no conflicts of interest and also to ensure one has
proper instructions from the clients. Sometimes it may be necessary to confirm your instructions
in writing at each stage of the transaction and especially just before an exchange of money or
documents. If any one writes to confirm instructions there can be no dispute at a later stage. It is
also important to keep full and detailed attendance notes record telephone conversations with the
client as well as meetings in the office or outside the office with the client. Make diary entries of
important dates such as completion dates or search priority records.
Reflection:What skills and knowledge will one need as a conveyancer?
The process of transfer or modification of interest must be by way of a written document. This is
a statutory requirement as the transfer or modification is deemed only to be complete once
registration has been effected as demanded by the relevant statute. It is noteworthy that the
transfer or modification can be to oneself [cf. Assents and transmissions].
Can an advocate act for both parties?
General principle is that one should avoid acting for both vendor and purchaser where there is a
conflict of interest or where such a conflict is likely to arise. This view has been restated by the
court in the case ofKing woolen M il ls and another v. Kaplan and Stratton Advocates6
In this case, the firm named Kaplan and Stratton had acted for both the borrower and the lender
in a borrowing transaction. The firm had prepared all the relevant documents, including the
security documents.
Subsequently, the borrower had defaulted on repayment and had questioned the validity of the
security documents. Subsequently, Kaplan and Stratton had purported to enforce the said security
and the appellant sought a grant of injunction to stop the firm. The Court of Appeal held that
since Kaplan and Stratton Advocates were aware that there was likely to arise a conflict between
the lender and the borrower, and since having acted for both parties they were in a position to be
6Civ. App. No.55/93
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privy to information pertaining to the appellants case, they would not purport to enforce the said
securities to the prejudice of the appellants.It is thus evident that an advocate should not purport
to act for a client during the trial process where a conflict of interest exists or is likely to arise.
Both parties should consent.
To appreciate conveyancing protocols better one ought to be familiar with the other branches of
law dealing with real property [Land Law], Obligations [Contract law] and remedies/restitution
[equity]. An appreciation of these branches of the law is thus necessary as advice to client will
run and cross through literally all of them in any ordinary conveyancing transaction.
[Reflection: what is the relationship of the other branches of law in particular the law of contract,
the law of torts, the law of equity, the law of real property to conveyancing law and practice?]
A Conveyancer must however not only be knowledgeable but also ethical and defensive.
See: JumaMuchemi V WaweruGatonye HCCC No.853 of 2002 NBI
Momanyi V H atimy 2003 KLR 545
HISTORY
Conveyancing law in Kenya, like other branches of law has drawn its history mainly from
English Law. Up till 1535 the English medium of transferring an interest in land was vide the
primitive method of surrendering to the Lord of Manor the subject parcel of land and his
Lordship in turn granted the same to the transferees nominee. The earliest and most important
form of conveyance however was thefeoffment. This involved no formalities save in the form of
a ceremony known as livery of seisin(delivery of possession). The feoffment was an assurance
note made by thefeoffor(owner of land) that he had given his right over an estate to the feofee.
The assurance note was accompanied with aformal public delivery of possessionin the presence
of witnesses mainly feudal lords. The law then also recognized facts of leases, assignments,
exchanges and partitions. [Note the enactments of 1535 Statute of Uses and 1536 Statute of
Enrolments, the 1677 Statute of Frauds which introduced the requirements of writing, execution
and attestation, the Real Property Act 1845, Land Transfer Act 1875, Vendors & Purchasers Act
1874 and finally the most important of them all the 1925 Law of Property Act which like the
Registered Land Act Cap 300 Laws of Kenya was intended to simplify conveyancing.The 1925
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statute established a formal register and also introduced state indemnity to those deprived of their
land or title.
Reflection:The conveyancing instrument to be drafted depended on the interest to be transferred
and the statutes played no role:true or false?
The history of conveyancing in Kenya can be traced to the turn of the 19th
Century. Like most
laws, the relevant statutes were also transplanted the last being the Registered Land Act in 1963
which was an even imitation of the Law of Property Act 1925 (U.K).
The first relevant conveyancing statute enacted in Kenya was the 1901 Registration of
Documents Act (RDA). Section 4 of the Act requires/d that documents conferring property
interest be registered within the month of its making to ensure its availability in evidence.
Registration of a transaction under the RDA guarantees no title but is merely evidence of the
occurrence of a transaction. Under the RDA certain conveyancing documents are still registered
to give efficacy to some conveyancing transactions. These documents include; Trust Deeds,
Powers of Attorney and Building Plans. Next was the Land Titles Act 1908 (LTA) which was
intended to help deal with the haphazard deserted parcels at the Coastal strip of the country.
The LTA also guarantees no title. In 1915 the Government Lands Act (GLA) was enacted to deal
with conveyancing and land titles in the interior hinterland. It introduced a more systematic
approach to registration and provided for Deed Plans for all parcels of land to the registered. The
title under the GLA was usually the last Indenture of Conveyance (Freeholds) or
Assignment (Leaseholds).In 1920 the Registration of Titles Act (RTA) was enacted. It was
based on the Australian Torrens system as to systematic certainty of title. It provided for
registration of and guarantee of titles. It attempted to make conveyancing simple by introducing
statutory conveyancing form albeit not mandatory.The title document under the RTA is either
a Grant or Certificate of Title or a Lease.
The Registered Land Act (RLA) enacted in 1963 tried to modernize conveyancing. The Act
borrowed heavily from the 1925 English Law of Property Act. Unlike the RTA, the RLA made
the use of statutory conveyancing forms mandatory(S.108). Thetitle document under the RLA
was a Title Deed/Land Certificate (for absolute proprietorship) or Certificate of Lease (for
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leaseholds) or a Certificate of Sectional Property if it is a property under the Sectional Properties
Act. Both were issued at the request of the registered proprietor and upon payment of the
requisite fees. The Land Registration Act of 2012 was later enacted to repeal the RLA LTA
RTA GLA and ITPA.
Reflection: what is the Torrens System? Of what relevance is it today nearly 150 years since a
non-lawyer in Sir Robert Torrens cropped up with it in Australia?
FORMALITY OF WRITING IN CONVEYANCING
One cannot buy land the way one would buy a newspaper or a loaf of bread. The contract must
be in writing executed by both parties and attested. This is a mandatory statutory
requirement.1Section 3(3) of the of the Law Contract Act provide that:
(3) No suit shall be brought upon a contract for the disposition of an interest in land unless-
(a) the contract upon which the suit is founded-
(i) is in writing. (ii) is signed by all the parties thereto; and
(b) the signature of each party signing has been attested by a witness who is present when
the contract was signed by such party:
Provided that this subsection shall not apply to a contract made in the course of a public auction
by an auctioneer within the meaning of the Auctioneers Act,nor shall anything in it affect the
creation of a resulting, implied or constructive trust.
(4) subsection (3) shall not apply to a contract made in the course of a public auction by a
licensed auctioneer within the meaning of the Auctioneers Act,1996 nor shall anything in that
subsection affect the creation or operation of a resulting, implied or a constructive trust.
Under Section 44(1) of the LRAevery instrument effecting any disposition under the Act shall
be executed by each of the parties consenting to it, in accordance with the provisions of this
section. And this is by of appending a persons signature on it or affixing the thumbprint or oth er
mark as evidence of personal acceptance of that instrument.
1Section 3 of Law of Contract Act Cap 23 Laws of Kenya
http://127.0.0.1:8080/app/view_cap.asp?CapID=389http://127.0.0.1:8080/app/view_cap.asp?CapID=389http://127.0.0.1:8080/app/view_cap.asp?CapID=389http://127.0.0.1:8080/app/view_cap.asp?CapID=3897/25/2019 Conveyancing Law in Kenya 2014
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The formality of writing serves three purposes: Evidentiary, Protective and Forensic. The
formality of writing performs the forensic (of or used in court of law) function in providing
simple yet conclusive evidence of the fact of agreement. The Statute of Frauds 1677expressly
provided that the requirement of writing was intended to guard against the fraud.
Formality of writing also performs a useful evidentiary function in encouraging precision and
recordingthe result for posterity. Writing helps to avoid disputesas to what interest has been
or is intended to be conveyed. Remember too that land can generate an array of interests from its
original form in the freehold estate.
Thirdly, it is argued2 that the formality of writing performs the protective function of giving
parties a chance to reflect and think on the deal before executing a binding contract that they may
wish so shortly before the ink is dry to renegeon. It is stated that if the agreement was to be oral
there would be no time for reflection on the deal per se. This function has been reinforced further
by the requirement of independent legal advise to be given by a qualified conveyance.Under
The Evidence Act there are some agreements that must be in writing.
Reflection: Are these arguments conclusive?e.g.has writing gotten rid of fraud in
conveyancingand how often do we make sensible decisions orally?]
Formality of Registration in ConveyancingConveyancing is complete only once registration is effected. Registration is the keeping of
records of land transactions in the Lands Register. It involves registration of both the title and as
well as the interest. What is registered is usually the title or ownership to land and any instrument
dealing with land or the disposal thereof. The purposes of registration include:-
enabling the Government to keep track of user and easier collection of revenue;
simplifying dealings in land registration and also avail certainty and security of title
or tenure;
Reduction of unnecessary litigation in matters relating to land.
Enables easy dealings in land transactions
2Moriaty, 1984 LQR 376) (Ojienda,2008)
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Security of tenure: A registered proprietor acquires an indefeasible tile against the whole world.
The security of tenure acquired through registration also gives the property, owner a right to
indemnity from the Government where there is fraud or an error in the Register. See LRA 81-84
Ss, but note the qualification in S. 80(1).
Reduction of unnecessary litigation: The registered owner can transact or settle his land
without the fear of being sued to challenge his title because upon registration, he acquires an
indefeasible title against the whole world.
Prevention of re-fragmentation of land: Registration helps to determine whether or not a
particular piece of land can be sub-divided because his tide details pertaining to the land, such as
acreage, will have been noted in the Register.
Facilitation of Government property tax administration: Through registration, the
Government is able to identify persons/property owners on whom to levy tax in respect of a
particular piece of land and also keep track of the Government's planning programmes.
Efficient administration and facilitation of the loan system: The security of title which flows
from registration makes it possible for property owners to obtain loans from financial
institutions. A prospective purchaser has more faith dealing with an owner whose land is
registered.
Prevention of concealed dealings in land: Registration gives publicity to land transactions.
Since the register is a public document and is therefore open to the public, it is possible to
ascertain who owns what interest in land.
Upon registration of the land or conveyance the registered proprietor acquires an indefeasible
title against the whole world [cf. Section 24 of the Land Registration Act No. 3 of 2012].
Registration is effected at the relevant Lands Registries.
Care must be taken that the conveyancing instrument is not only presented at the proper Registry
but is also signed/registered by the proper Registrar.
What is registered? Title (land) andinterest (servitudes,encumbrances,quasi-encumbrances).The
latter includes charges, leases, easements, profits, restrictive agreements or covenants3. The
3(see Tulk v-s Moxhay [1843-60] All E. R 9)
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former involves the estates namely allodiums, fee-simple, freeholds and leaseholds which also
rank as limited interests.
Effect of Registration
Pursuant to Section 24 of the LRA the registration of a person as the proprietor of land shall vest
in that person the absolute ownership of that land together with all rights and privileges
belonging or appurtenant thereto; and the registration of a person as the proprietor of a lease shall
vest in that person the leasehold interest described in the lease, together with all implied and
expressed rights and privileges belonging or appurtenant thereto and subject to all implied or
expressed agreements, liabilities or incidents of the lease.
One becomes an absolute owner of the ti tle or in terest r egistered. [Reflection: How absolute is
absolute?]
Pursuant to section 25 of the LRA The rights of a proprietor, whether acquired on first
registration or subsequently for valuable consideration or by an order of court, shall not be liable
to be defeated except as provided under the Act, and shall be held by the proprietor, together
with all privileges and appurtenances belonging thereto, free from all other interests and claims
whatsoever, but subject
(a) to the leases, charges and other encumbrances and to the conditions and restrictions, if
any, shown in the register; and
(b)Overriding interest (S. 28 LRA)
See also: National Prov. Bank Limitedvs- Hastings (1964) Ch 9
Mbuivs- Mbui (2005) I E. A 256
Marigi Vs Marigi 1996 LLR 463
Ogongovs.Ogongo CACA 29/2003
Esiroyovs- Esiroyo (1973) E.A.
Effect of Non-registration
Non-registration means simply that there is no interest passedat least in rem. See however Section
30 (3)a certificate of title or certificate of lease shall be prima facie evidence of the matters
shown in the certificate, and the land or lease shall be subject to all entries in the register.
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Section 26LRAprovidescertificate of title to be held as conclusive evidence of proprietorship
unless obtained by way of fraud or misrepresentation or where it has been acquired illegally,
unprocedurally or through a corrupt scheme.
See also Rogan Kamper vs. Grosvenor 1977 KLR 123, Clarke vs.Sondhi (1963) E.A.,
Merali vs. Parker (1956) 29KLR 26, Bains -Vs- Chogley (1949)
Reflections: On a proper construction of Section 30 of the LRA, rightsconcerningland give no
proprietary quality unless registeredtrue & false? cf.
S. 30(3) LRA.
Registration only creates more to the whole world and no more.
Cautions and caveats effect of,
Overriding interests
Abstract matrimonial property rights
Echariavs- Echaria C.A.C.A 75/2001
Kivuituvs- Kivuitu C.A.C.A 26 of 1985
Lord Melvin Blackburn Vs Lady Blackburn ( Malindi HCCC No. 87 of 2007)
Married Womens Property Act 1882. S. 17
Adverse possession
Wambuguvs.Njuguna 1983 KLR 172
Proprietary estoppel.
TengHuanvs.SweeChuan 1992 1 WLR 11
NB
Registration at the Companys Registry under Section 96 of the Companies Act (Cap
486) is required where a Company creates a Charge over its parcel of land. Companies
Form 214. use of,
Registration at the Registrar of Co-operative Societies.
Purpose in both instances:
- Create a secured creditor vis--vis insolvency
- Notice to prospective Debentures- holders.
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Under Section 44(1) of the LRA every instrument effecting any disposition under the
Act shall be executed by each of the parties consenting to it, in accordance with the
provisions of this section. And this is by of appending a persons signature on it or
affixing the thumbprint or other mark as evidence of personal acceptance of that
instrument.
Reflections on Registration:Where is registration effected? Who effects it? When is it
deemed to have been effected? What is registration subject to? What is (must be)
registered?
INSIDE A LANDS REGISTRY:A CONVEYANCERS NIGHTMARE OR PYRRHIC?
1. Filled Valuation Forms lodged with the Collector of Stamp Duty for purposes of valuation
Particulars of property Form filled by conveyancer
Valuation for Stamp Duty Requisition Form filled by the Collector
and sent to Chief Government Valuer for valuation. This is only applicable
where the document is a transfer or Deed of Conveyance
2. Document stamped and dutypaid at the Banks (KCB/NBK) then document lodged for
registration
3. Document presented in duplicate together with all relevant requisite documents e.g. original ofthe governmentsvaluation report, consent, clearance certificate, original title,e.t.c
Fill out application for registration in quadruplicate.
Pay registration fees. 500/=
4.UponPresentation of document and a day book number given entered into a register and date
and time of presentation endorsed on the document for purposes of priority
-See Sec 27 RDA4
The time of presentation of doc ,not execution or date thereof , counts to pass interest.
5. taken to audit and Government Auditor ascertain stamp/duty,taxes-rent,rates, have been paid.
6. Left for matching with the Deed or Parcel filesfrom the strong room
4Section 27 of the RDA cap 285, the day upon which a document is presented for registration shall be deemed to be the date ofregistration.
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7. Registration proper commences with the Registry- in charge of marking the documents for
action in
a register known as the A book
First is verificationof document by an officer in the registry: detection of any defects
Second is Inspectionof the title by an officer to ensure title is clear and registration can
proceed
Third is Entryof particulars of interest being acquired.
8. Document is then passed to relevant Registrar for execution and ultimate registration
Registrar vets it again and then signs in approval or rejection with reasons
9. In epilogue:
Document is photocopied (except RLA documents)
Sealed with Land Registrys Seal (except GLA documents)
Released to owner.If RTA,RDA,GLA or LTA the Registry keeps a photocopy,if RLA the
Registry keeps the original and releases the counterparts.
Reflection:Why does it take more than 14 days to complete such a simple looking process?
PRE CONTRACT PERIOD AND INVESTIGATION OF TITLE
Of Estate Agents
Ordinarily any contract of conveyance will have two parties: the Vendor and the Purchaser, the
Chargor and Chargee, the Lessor and Lessee. The third outsider is always the Conveyancer.
However most of the conveyancing transactions have also been known to have another outsider
in the form of an agent who brokers the conveyancing deal. Brokers are now statutorily
recognized under the Estate Agents Act (Cap 533) Laws of Kenya. Their role is to identify a
party to a conveyancei.e. the Purchaser or Vendor or the Financier, at a commission.
The Estate Agents Act was enacted to provide for inter alia the registration of persons who by
way of business negotiate for or act in the selling or purchasing or letting of land or buildings
erected thereon. Section 2(3)of the Estate Agents Act expressly exempts advocates from the
provisions of the said Act. Advocates do not need to be registered under Section 13to practice as
estate agents. Advocates by dint of the provisions of the Advocates Remuneration Order
Articles 27 (Sales) and Article 30 (Mortgages) can also be agents even though they do not meet
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the stringent qualifications outlined in the Estate Agents Act. Advocates are exempt from the
provisions of the Act under S 2(3)(Advocates can be estate agents).
For any one to earn a commission as an Estate Agent one must be registered under the said
Estate Agents Act: See Omollo J. A. in Rajdip H ousing Development Company L imi ted vs. J.
W. Wambugu t/a Wambugu& Company Advocates C.A.C.A 4/1991.See also the case ofMapis
I nvestment (K) L imi ted vs. Kenya Railways Corporation C.A.C.A 14 of 2005and section 18of
cap 5335.
It is otherwise a positive transgression of the law to practice as an estate agent when one is not
registered6and the message passed by the Court of Appeal in the MapisCaseis that a transaction
may be declared null and void and unenforceable ex turpicausa.The commission is earned when
the transaction is actually successful and is either as agreed or per the scale provided under the
Estate Agents (Remuneration) Rules 2002.
Rajdip H ousing Development Company L imited vs. J. W. Wambugu t/a Wambugu& Company
Advocates
The seller asked the advocate to instruct an estate agent to get a buyer for property at the asking
price of 100 million. The advocate instructed the broker who got a buyer for 200 million. Then
the advocate moved a step further and managed to secure 225 million. When the seller realized
what happened he went to court and claimed unjust enrichment and instructed the advocate to
refund 25 million. The court of appeal alluded to the fact that advocates should actually earn
commission.
Facts of the case
Rajdip housing the appellant entered into a sale agreement dated March 30th
1990 to sell to
Ufundi co-operative property situated along Uhuru Highway at a consideration of Ksh. 225
million. Wambugu&Co. Advocates acted as advocate for the appellant while Mr. Satish
5 Section 18 provides(1) After the expiration of six months from the commencement of this Act or such further period as theMinister may, by notice in the Gazette, allow either generally or in respect of any particular person or class of persons(a) no individual shall practice as an estate agent unless he is a registered estate agent;(b) no partnership shall practice as estate agents unless all the partners whose activities include the doing of acts by way of suchpractice are registered estate agents;(c) No body corporate shall practice as an estate agent unless all the directors thereof whose duties include the doing of acts by wayof such practice are registered estate agents.(2) Any person who contravenes subsection (1) shall be guilty of an offence and liable to a fine not exceeding twenty thousandshillings or to imprisonment for a term not exceeding two years or to both.6Ibid
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Gautama acted for the Society. It was a term of the Sale Agreement that 125 million represented
the developments and expenses and the balance of the purchase price of 100 million would be
paid by installments as stipulated in the agreement. The advocates of the appellant refused to
forward some of the money (25m) to the appellants as part of the sale price claiming that fees of
some firms needed to be settled. These included fees of Lobi firm as commission agents for the
purposes of securing a purchaser and negotiating on the purchase price of the property. The
appellant contended that the advocate had no authority to negotiate the sale of its property or to
bind it in any way without its agreement nor had it held them out as having such authority. The
advocates argued that the agreement was ambiguous and therefore extrinsic evidence was needed
to show the intention of the parties. The court was of the view that an instrument must be read
most strongly against the party who prepares it and offers it for execution. This is the rule in the
maxim verbafortiusaccipiuntur contra preferentem. Also unless otherwise shown the
presumption is that the advocates for the vendor prepare the Agreement of Sale.
Reflection: Are Advocates to be subjected to the Estate Agents (Remuneration) Rules 2002 or
the Advocates (Remuneration) Order when calculating their commissions as Advocates qua
Agents? Are Advocates deemed qualified per seunder the Estate Agents Act? What happens
when an estate agent misappropriates money deposited with him and which constitutes part of
the purchase price?
It must however be noted that the role of a Conveyancer and of the Agent must always be
separated. An Advocate must as a Conveyancer keep off the negotiations and show the least
interest. Likewise an Advocate must not allow an Agent to take over his role e.g. conduct an
investigation of the title on behalf of or for the Advocate. Besides estate agents, a conveyancing
transaction may also invite other innominateparties. A conveyancer and or a party to the
conveyance may require the services of a Valuer,an urban planner, a surveyor, an architect
to ensure the success of the transaction.
Land valuer
Land valuers must be qualified under the Valuers Act- Cap 532. They value the property
especially if the purchase is financed by a bank.
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Planners (control of developments and subdivisions within local authorities)
Planners must be registered under the Physical Planners Registration Act no.3 of 1996.
Architects
Architects must be qualified under the Architects and Quantity Surveyors Act (Cap 525). Create
the architecture of the development.
Quantity Surveyors
They must be qualified under the Act above. They estimate the quantities and cost of the
materials labour and time of the development.
Land Surveyors
They must be qualified under the Survey Act (Cap 299). They determine boundaries and
mapping. They are useful when subdividing the property.
Reflection: In what instant will you advise your client to engage the services of each of the
above professionals?
Of the Initial Client Interview
Prior to the formation of an enforceable contract an Advocate will have an initial client
interview. The purpose of the initial client interview is to firstly gather all the relevant facts
pertaining to the intended transaction and secondly afford crucial advise to the client on
transactions generally and the particular transactions specifically. There is utter need to prepare
well for the interview. The facts and instructions to be ultimately obtained at the initial client
interview will depend on each transaction but ordinarily one will be interested in:-
Details of the parties: names, capacity, advise on co-ownership [cf. Barclays Bank PLC vs.
Obrien (1994) 1AC 180, Shah V Akiba Bank L imi ted (2005) 2 KLR.At the initial interview,
look at their capacities. For instance if the client is a minor, you advise the client to use a trustee.
If transferred to the minor there are repercussions because the minor will not be able to transfer
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the property or deal with the property as he/she may please. Or in certain circumstances the
trustee may even misuse the property.
The issue of joint tenancies where such systems are recognized by registration systems.
Distinguish joint tenancy and tenants in common. In joint tenancies the interest is bound and if a
tenant dies then the other tenants gets the share of the deceased tenant. A lawyer can be sued if
unmarried couples are advised to take up joint tenancies. In co-ownerships if advising a
mortgagor it is critical to ask the wife to obtain independent legal advice as this came from many
common law cases like:Barclays bank PIC v. Obrien,in this case the House of Lords held as
against the court of appeal, a wife who hasnt obtained independent legal advice any such
mortgage will be void but only as against the wife. This is the law, but you ask as a legal advisor
arent you giving legal independent advice?
Details of the proposed conveyance:parcel number, fixtures, consideration. As an advocate you
need to know the plot number, if the land only is being sold or there are fixtures.
Authorization to disclose details and information about related transactions: Cf. Mortgage
Express Ltd vs. Bowerman& Partners 1996 2 Al l E R 836.The authorization from the client
that you may disclose information related to the other members in the chain or the parties. There
is the duty of confidentiality and you need permission first. You need to ascertain and get formal
authorization. If the client denies this permission what should the advocate do? Breach the duty
of confidentiality or let go of the brief. Here you try and advise the clients of the repercussions in
that if the information isnt disclosed the transaction could take longer than expected. There is a
duty by the advocate to uphold the dignity of the client, because if you keep everything in
confidence most of the time the client would come back to you. If the property is charged to a 3rd
party you ought to be in a position to disclose the amount the client is borrowing. In the case of
Mortgage Express L imi ted v. Bowerman& Partners 1996 2 Al l ER 836it was held the advocate
doesnt just protect the client but also 3rd
parties for the sake of earning fees. You shouldnt
encourage such fraud just to earn your fees.
Details on pre contract enquiries.Especially acting for seller. Here you are bound to receive pre
contract inquiries which are searches that inquire on the physical structure of the property. When
acting for the buyer at the initial interview you dont really tell your client to go and investigate
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but if its the seller you even have an evaluation report. Advocates must be equipped with all
these information so that you arent sued for negligence.
Discussion on conflict of interest: when acting for buyer/ seller it is a general principle of
professional conduct that an advocate must not act for two or more clients where there is a
conflict of interest between those clients. There is no specific bar against acting for a buyer and
seller provided there is no conflict of interest. The advocate must however not be involved in the
negotiation of the sale price of the property. It is also advisable to get the written consent of both
parties for an advocate acting for both the seller and the buyer. Acting for Lender and
Borrower: Acting for lender and borrower is generally permitted provided the chargee is an
institutional lender which provides charges on standard terms in the normal course of its
activities, e.g. a bank or building society. This in the vast majority of residential transactions, the
advocate for the borrower/purchaser will be the same as the advocate for the lender
The nature of the advise you offer the client must be independentt [ Cf. Barclays Bank PlcVs
Obrien 1994 Al l E R, Royal bank of Scotland VsEtr idge 2001 4 Al l E R 449]
Discussions on fees.-All relevant client care information, together with information on fees to be
charged must be confirmed in writing at the start of the conveyancing transactions. Its possible
to agree on the advocates fees for the whole transaction. It is also important to inform the client
the right to increase the advocate's charges should the transaction prove to be unduly
complicated or protracted. In this way, the advocate does not bind themselves to a fixed
unalterable fee. It may be necessary to reassure the client by saying that in the vast majority of
cases, no increase is, necessary. An advocate must inform the client in writing the estimate of
fees and should also advise the client immediately in writing if the figure is to be revised.
Discussions on financing and financial implications of the transaction:advice on deposits,
stamp duty, undertakings
Details on the title documents:Obtain copies of the title document.
Reflection:...When men die at war it is usually because of lack of proper preparation ...Sun Tzu
300B.C.How prepared isyou for your initial interview?
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What is the principle of Independent Legal Advise all about? Cf. purpose of transaction,
nature of documents as well as their terms and effect, giving client option of making the choice
and advise on liability premised on the documents
Of the Investigation of Title (and Property)
Investigation of title (and property) is the process through which a Conveyancer determines
whether the client is going to ultimately acquire a good marketable title. The Conveyancer is
obliged by practice to ensure that what is being disposed of and or what is being acquired is a
good marketable title. For three basic reasons title (and property) are investigated.
Firstlythe caveat emptor(Buyer beware) rule imposes an obligation on any person intending to
acquire an interest in property to investigate the same. A Seller is under no obligation to disclose
patent defects but he is under an obligation to disclose such latent defects as he may be aware of
[Reflection: What are patent defects? And latent defects? Can you figure out some examples of
either?].
Secondly, the well settled principle of law that a bona fide Purchaser for value without notice
acquires a good title to property unaffected by matters of which he had no notice also dictates
that the title (or property) is investigated in order for a party to have the protection afforded by
the law to such bona fide Purchasers for value without notice: see Oliver V Hinton 1899 2 Ch D
264, Section 3 of the Conveyancing Act 1881, Section 199 of the Law of Property Act 1925.
The thirdreason for investigating a title (or property) is that prudence and practice demands the
same of a Conveyancer as well as of his client. The client wants to be certain that it is obtaining a
good and marketable title. Failure to do so may result in a successful claim for negligence in the
event of loss on the part of the client. It may thus be said that investigation of the title (or
property) is part of defensive conveyancing. Vendor- deducing of title, disclosure of latent
defects: This is the responsibility of the vendor. Vendor is expected to deliver on the promise that
he has good title to the property. This duty is imposed on the vendor because it is expected that
the devolution of interest in a property is best known to the vendor.
The Vendor deduces the title by submitting an abstract of title. This is a brief history of the
property showing how the interest in the property moved from one person to another, the
encumbrances and any other thing that may affect the property. It is also called an epitome of
title in many jurisdictions- a schedule of documents and other relevant information which
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constitute the title together with copies of these documents. LSK Conditions of Sale- cond. 9
requires the abstract to be presented by the vendor within 14 days of the date of the agreement.
Immediately after receiving the abstract/epitome of title it is the duty of the purchaser to conduct
an investigation of the title. The purchaser is expected to go to the following places:
Land Registry (remember the location of the registries for the various registration
Acts)
Company Registry- where the property is/was owned by a company
Probate Registry-where transfer is by succession
Local Authority- to establish planning hindrances, notices, rates payment
Survey Department to establish boundaries.
Physical Inspection of the property- to ensure the measurement, description,
boundaries, improvements etc correspond with what is in the title. Also to establish
patent defects.
Court records- if there has been a dispute over the property.
Ideally, investigation of title (or property) will be conducted prior to the contract being
executed. Post-contract investigations of title may however also serve the purposes.
[Reflections: what dangers would post-contract investigations of title pose to the Conveyancer
and or his client? Distinguish between patent defects and latent defects.]
There are basically threemediums of investigating the title or property. These are searches, pre-
contract inquiries and requisitions.
(a)Searches
Like registration, searches also shield against fraud. Searches are enquiries carried out usually
by the Purchasers or Chargees or Leassees Advocate in the government departments so as to
check ownership of the interest as well as planning, environmental and encumbrances and other
related matters which affect ownership of the interest being transferred or given and which
matters are noted or ought to be noted on the title register.
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It is effectively the purposeful inspection of title records or register at the relevant (Lands)
Registry. The modern Conveyancer is more concerned with the Lands Registry Search though it
is advisable that the other searches are not ignored. Such other searches will include searches at
the Companies Registry to confirm existence of the Vendor or solvency of such Vendor, search
at the Local Authority Registry to ascertain any planning hindrances or notices search at the
Survey Department to reconfirm or identify boundaries.
With regard to the Lands Registry searches, the statutes recognize both official and unofficial or
hand (personal) searches. An official or postal search is one made by an Official of the relevant
lands Registry at the behest of a party upon payment of the requisite search fees and the results
of such official searches are guaranteed by both the registry and the Government as accurate. A
Certificate of Official Search is always issued for such searches. The personal or unofficial or
hand search on the other hand is made by a member of the public by inspecting the relevant
register, parcel or deed file availed by the Lands Registry staff. Currently only Lawyers and
Advocates are allowed to conduct personal or hand searches. The official search may have the
advantage of a government guarantee and indemnity for any loss resulting or sustained by reason
of a defective official search, but is also has its disadvantage in that the Registry staff may not be
able to discern and avail all the relevant information. Such failure to discern and avail
information may not necessarily amount to a defective search to qualify for indemnity. The
Official Search on the other hand has one great advantage that one is able to collect the
information required without discrimination.
In conducting a search one ought to get details of ownership, of special conditions, of the tenure,
of the rental, of the user, of encumbrances and quasi-encumbrances (i.e. caveats). Expect
however to meet such hiccups as missing registry deed or parcel files.A third type of Lands
Registry Search ordinarily not conducted is the historical search. This refers generally to a
search on the history of the subject parcel of land. Such history will be found in the
correspondence file and not the parcel or deed file. The correspondence file contains all the
details about the origin of each parcel of land from the allotments to any subsequent subdivisions
and indeed to the root of the title. The correspondence file is comprised of the internal
correspondence between the various sub-departments of the Lands Department. It may thus be
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ranked confidential and it is important that an official request is made to the Commissioner of
Lands.
The availability of the correspondence file has however helped in discerning good and
marketable titles as was in the cases of Gitwany Investment Limited vs- Tajmall Limited
and 2 Others ( 2006 2 E A 76)and Skyview Properties Limitedvs- Attorney General & 2
Others (NBI HCCC No. 1622 of 2001 unreported) . The Court of Appeal however seems to
hold the contrary as in Pashito Holdings Limited &AnorVs Paul NderituNdungu& Others
[1997] eKLRthat one shouldnotinvestigate a title beyond the register at the lands registry. See
also Justice KimarusobiterinAttorney General Vs Kenya Commercial bank Limited ,
Afraha High School Limited & 2 Others [2004]eKLRthat historical searches are unwarranted
and unnecessary for being an affront to the principle and concept of registration.[ Reflection: do
the statutory provisions allowing official searches effectively also allow a historical search to be
conducted? Need one limit himself to statutory searches only? Are you intellectually independent
of your clients control as an officer of the court and law and thus the consequences of your
clientsacts must be viewed by you in the larger probably publics interest as well?]
The result of Searches will disclose information in relation to the Vendor/Mortgagor and or the
property. It may be necessary to disclose and discuss such information to the client as this may
impact on the decision to purchase or take the security. Good practice however demands that
you engage the other party or require the other party or his Advocates to confirm position of the
findings i.e. wills the detected encumbrances be discharged?
NB: read- s.39 RDA and s.34 LRA
(b)Pre Contract Inquiries
Pre Contract inquiries are also a medium of investigating the title (or property). They are
preliminary inquiries relating more to the physical condition of and location of the subject
property as well as the proposed contractual document itself. A Purchaser will ordinarily want to
know the physical condition and extent of the property. For this the Purchaser will conduct a
personal inspection of the property or deputize his agent (e.g. a valuer). The inspection is
conducted to help ascertain not only the value of the property but also to detect physical and
patent defects, ascertain those in occupation, ascertain the boundaries and also to check on the
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fixtures and fittings, if any. Naturally these are matters not covered by searches and pre-contract
inquiries will thus be made after such physical inspection to help plug in the gaps.
Pre contract inquiries thus relate to matters touching on the physical condition of the property as
well as other matters not covered by searches. They are as important as searches. The
Purchaser, for example, buys the property as it stands and the Vendor is under no duty to
disclose any physical defects in the property. The Purchaser must be advised by the
Conveyancer of this and must be further advised that in order to protect himself or herself he or
she should have the property fully surveyed and inspected before the contract is signed. Some of
the pre contract matters one will bother himself with include development prospects and
planning permission matters of the property and adjoining property, access to the property,
boundaries of the property, water supply, physical defects detected or suspected, disputes
existing in court over property, tenants in occupation or absent, etc. The full extent of the pre
contract inquiries will depend on each particular transaction and property. When acting for the
Vendor it is important not to presume any answers to pre contract inquiries but to consult with
the client and answer accurately as possible. Answers if unequivocal and relied upon but turn out
to be untrue can lead to a suit in damages both against the client and his Advocate providing the
answers especially where the Advocate decides to step out of his role as Advocate and accepts
direct responsibility towards the third party: Gran Gelato Limitedvs- Richcliff (Group) Ltd
[1992] 1 All ER 865. See also Cross Js holding inNational Provincial Bank Ltd Vs Hastings
1965 AC 1175 that persons dealing with unregistered land must obtain same information
outside the register in the same manner and from the same sources as people dealing with
unregistered land would obtain it.
(c)Requisitions
The purpose of requisitions on title besides aiding the process of investigation of title is to help
give the Purchaser title in accordance with the contract for sale. Requisitions relate to matters
which arise not on the basis of the search or simple physical inspection of property but through
the inspection of the title document or abstract availed. The requisitions are in the form of
forthright questions arising after a perusal and deduction of the title document. Deduction will
relate to tenure or the property, execution of the title document, identity of and description of
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theproperty, underpaid stamp duty, identity of the encumbrances if detected on the face of the
title.
The LSK Conditions of Sale (1989) at Condition 10 provide for the requisitions or objections to
be made after the contract has been executed and in any event not later than fourteen (14) days
after delivery of the abstract, title deed or a copy thereof. However as requisitions do not enable
the Purchaser to have a second bite of the cherry in respect of matters which were overlooked at
the time of execution of the contract, good conveyancing practice would tilt towards conducting
requisitions prior to the execution. A Vendor is however under an obligation to fully and
correctly answer the requisitions.
Additional Notes
Why do searches?
The caveat emptor rule remains a cornerstone of conveyancing. It is prudent that a buyer will
need to find our as much as possible about the subject property before contracts arc exchanged.
The seller to some extent and under common law also has a duty to disclose any material
subsisting encumbrances. .A prudent buyer needs to discover as much as possible about the
property being purchased.
This is the obligation of the buyer's advocate. The buyers advocate must conduct pre-contact
searches and all preliminary enquiries. The advocate must carry out all appropriate searches and
enquiries before advising the buyer to sign any contracts to purchase property. Advocates must
bear in mind that if they fail to carry out every appropriate search, they will be liable in
negligence for any loss suffered by the client as a result of their negligent conveyancing. The
advocate must also advise the buyer of the need for a physical search or inspection of the subject
property prior to the exchange and the signing of any contracts. In Kenya, searches can be
divided into official and unofficial searches. In all searches, nominal fees are paid.
Personal searchesentail an actual examination of the deed files or register. A personal search
may be carried out by anyone. Normally advocates use their conveyancing clerks to do this. A
search will reveal details of all transactions registered against or in respect of the title.
Official searchesconstitute of an application to the registrar of lands to supply the person
applying with certified copies of details of the register (RLA). The registry by accepting to do so,
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takes responsibility of investigation of the title. Certified copies are admissible in court and -
conclusive of the entries in the register of deed file in the event of litigation.
The Significance of Searches
Searches may appear simple and routine, but they are vital for successful conveyancing.
An omission of a search could lead to unpleasant surprises. These include;
a) Discovering that documents lodged for registration cannot be registered because of
restrictive entries such as caveats, caution, prohibitions or restrictions on tide.
b) Discovering that the title is encumbered.(Charges)
c) The proposed vendor may turn out not to be the registered proprietor of the subject
property. The unpleasant surprises may turn out to be a matter of professional negligence
against the advocate. There is also the issue of embarrassment.
Other necessary searches include;
Investigations of the correspondence file to establish if Land Rents have been paid over the
years. Huge outstanding land rent arrears owing to the government by prospective vendor could
affect a sale/purchase transaction. An investigation of the status of payment of rates at local
municipal offices is also essential.
Physical Search or Inspection of the PropertyA buyer should always be advised to inspect the subject property prior to exchange or signing of
contracts. The reasons for this are five fold;
Why check the state and condi tion of the property.
In general the seller is under no obligation to reveal defects in the property. There is normally no
warranty given about the state of the property and consequently all buyers should obtain their
own survey report before contracting to purchase property. The caveat emptor rule (let the buyer
beware), applies to conveyancing transactions. In most cases, sale agreements will stipulate that
the buyers accept the property in the physical state it is in at the exchange of contracts. A prudent
buyer will therefore use the services of professional advisers such as surveyors or valuers to
assist in inspecting all the buildings.
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(ii ) To check who is in Actual Occupation of the Property
This is critically important as the seller may not be the person in actual occupation of the
property and others could be entitled to occupy the property not withstanding that they are not
co-selling. It is of most importance to check that there are no undisclosed occupants within the
property who could claim rights of occupation and thereby delay or defeat completion. As well
as physically inspecting the property, a buyers advocate will also raise written enquiries about
who is in occupation (e.g. tenants.)
(ii i) To check boundar ies
A buyer will want to be sure that the contract correctly describes the property and the boundaries
on the ground are the same as those shown in the title and in the contract.
(iv) To check on ri ghts and easements affecting or benefi ting the properl y.
A physical inspection of the property will assist the buyer establish the rights of others, such as
path ways and gates. Any easements adversely affecting the property should be referred to the
seller without delay for clarification.
(v) Tocheck f ix tur es and f itt ings contracted to be sold are in the subject property just pr ior to
the exchange
The buyer will want to be sure that items to be sold actually exist and are within the subject
property. (Water tanks, electrical fence, etc)
Advice on Survey
A purchaser / mortgagee/chargee should always be advised to have a survey carried out before
exchange of contracts because of the caveatemptor principle, 'let the buyer be ware.' It is for the
buyer to discover all the physical defects in the property and these may not be apparent from the
clients own inspection. A client may sometimes be reluctant to incur additional expenses in
survey fees. It is however the advocate's responsibility to advise the client that this is money well
spent. Failure on the advocate's part to give this advice could amount to professional negligence.
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A physically defective property may of course be unsafe to occupy but there are financial
implications for the purchaser as well.
The market value of a property will be reduced if a property is in poor condition and so the
purchaser may be paying more than he/she should. This may also adversely affect the purchaser's
ability to mortgage the property or sell it at a later date. There is also the danger of non-existent
properties. These are all considerations that must be drawn to the client's attention. Basic
valuation by a registered valuer constitutes one of the simplest and cheapest forms of survey. It
constitutes a visit and physical examination of the property to establish the property's value on
the open market and its physical delineation.
A valuation report is important especially if the property is to be charged to secure a loan. A
mortgagee's surveyor/valuer owes a duty of care not only to the lender but also the borrower who
relies on the report. A copy of the valuation report should be made available to the borrower.
Special considerations when valuing include; neighbouring properties, drainage, infrastructure,
location, the zoning and development policy by municipal authorities of the property area are
also key.
[Reflection: What remedies are available to a recipient of inaccurate answers to pre-contract
inquiries or requisitions?]
EXECUTION & ATTESTATION
Execution is the signing of documents the purpose of which is to authenticate and acknowledge
the same. Signature on the other hand is the writing or otherwise affixing a persons name or a
mark to represent his name by himself or by his authority with the intention of authenticating a
document as being that of, or as binding on the person whose mark or name is so written or
affixed. Initials, thumb prints (left thumb for men, right for women) are deemed to be
signatures but the mere typing of a name is not (See: Lord Denning in Goodman Vs J. Eban
1954 1QB 550, see alsoFirst Post Homes Ltdvs- Johnson [1995] 4 All. E. R. 355, Section
3(6) of the Law of Contract Act (Cap 23) Laws of Kenya). Section 44 of the LRA provide for
execution of documents.
Natural persons can sign by themselves or by their duly constituted Attorney(s). Companies
and other juristic persons will execute the document as per the provisions of their respective
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constitutions, memoranda, charter or the constituting statute as necessary. Such juristic persons
may also execute documents through their duly constituted Attorneys. A close perusal of these
constituting or establishing documents or statutes is thus important. Look at sections 43-48 of the
LRA.
Whilst the actual conveyancing instruments must be signed by the proprietor or his duly
constituted Attorney, a Sale Agreement may be signed by he who has apparent or ostensible
authority and not necessarily actual authority. [ Reflection: In the recent case of Shem
ObondiVsSeemford Holdings Limited, the Court of Appeal seems to have suggested that
apparent or ostensible authority has no place in modern day commerce. Do you
agree?]Documents will be signed at the signature block which appears at the very end of the
conveyancing document. It is however prudent that to achieve the aim of execution and also to
guard against unscrupulous practitioners, parties be encouraged to initial or sign every page of
the document.
Attestation is the proper witnessing of a signature or execution. It simply means to bear witness
to a fact. The person witnessing the execution must be present as the executant ascribes his mark.
The object is to help guard against fraud and thus a party to a deed cannot attest to its execution.
A Vendor ought not witness the Purchasers signature and vice versa. So seriously is the issue of
attestation taken that the Court of Appeal in LamchandFulchand Shah vs. - I & M Bank
Limited C. A. C.Appl. No. 165 of 2000 decreed that where there is a question of proper or
improper attestation then the Advocate who purportedly witnessed the execution must be made a
party to the suit. The conveyancer must thus take care and ensure the document has been
executed in his presence. [Reflection: who should attest the execution?]. A document executed
by a company does not necessarily require to be attested: see Coast Brick vs-
PremchandRaichand 1966 E. A. and Eccon Construction & Eng