The Sectional Properties Act of 2020
The Sectional Properties Act of 2020
The Sectional Properties Act came into force on December 11, 2020. The Act requires conversion of all long-term sub-leases intended to give ownership of apartments, flats, maisonettes, townhouses, villas, or offices that do not conform to section 54 (5) of the Land Registration Act, 2012.
The Act also provides for the division of buildings into units to be owned by individual proprietors and common property to be owned by proprietors of units as tenants in common. Under the current practice, the owners are shareholders in the Management Company. This will give apartment owners big transaction ability in disposing and financing of their units in the market. Also, banks will now give great incentives to unit owners when lending since the charges will directly be placed on their individual titles.
We discuss below on the purpose of the Act and understanding what it means.
The Purpose of the Act
The Sectional Properties Act provides for the use and management of the Units and common property and for connected purposes. The new law gives purchasers of apartment properties the legal title to their own units. This Act will escalate real estate ownership because it enables more people to own property. This greatly supports the affordable housing scheme.
It is important to note that every unit of building will be considered an independent parcel of land. The ground rent and rates will now be the responsibility of each individual owner. To protect the homeowners, the regulations put in place will provide for the closure of mother titles to ensure that developers do not endanger the security of unit owners.
Understanding the Sectional Plan
Common property comprised in a registered sectional plan requires the property to be held by the owners of all the units as tenants to the unit. The title deed will include their respective share in the common property.
The sectional plan prevents the sale of premises falling under the Act, either as a residential or commercial unit until the sectional plan is registered.
Existing Long terms subleases registered on the basis of Architectural drawings must conform to the requirements of the Sectional Properties Act, by 11th December 2022. The process of conversion has commenced and as communicated in the Public Notice issued by the Ministry of Lands and Physical Planning on 7th May 2021, the registration of Long term leases on the basis of Architectural drawing ceased with effect from 10th May 2021.
Conclusion
It is very important for all the owners whose properties fall under the Act to abide by the new requirements as it also provides an opportunity for owners to give more value to their property.
If you require any help with conversion of your sublease or any other land question or land transaction, do not hesitate to contact Damaris W. Gitonga & co on info@dwgadv.co.ke